Shagufta Khan v. Salim Valliani and Agha Juice and Cafe , 439 S.W.3d 528 ( 2014 )

Affirmed in Part, Reversed and Remanded in Part, and Opinion filed July 24,
2014.
In The
Fourteenth Court of Appeals
NO. 14-13-00582-CV
SHAGUFTA KHAN, Appellant
V.
SALIM VALLIANI AND AGHA JUICE AND CAFE, Appellees
On Appeal from the 400th District Court
Fort Bend County, Texas
Trial Court Cause No. 10-DCV-185357
OPINION
Shagufta Khan filed this personal injury action, claiming that Salim Valliani
had sexually assaulted her when she was fifteen years old. The trial court
dismissed the suit with prejudice based on a finding that Khan had “failed to
follow the Court’s Orders on several occasions.” We consider two issues on
appeal: (1) whether the trial court abused its discretion by assessing a $400
sanction for discovery abuse against Khan, and (2) whether the court acted within
its authority by dismissing the suit with prejudice when Khan failed to pay the
$400. We conclude that the trial court did not abuse its discretion by assessing the
discovery sanction because there is evidence that Khan had abused the discovery
process. However, we also conclude that the trial court had no authority, inherent
or statutory, to dismiss the suit with prejudice upon Khan’s failure to pay the
sanction. We affirm the discovery sanction, but we reverse the trial court’s order
dismissing Khan’s suit and remand for additional proceedings consistent with this
opinion.
BACKGROUND
This appeal focuses on a contentious discovery dispute over one of Khan’s
personal journals. Khan testified during a deposition that she had a journal in her
possession and that it contained writings about her alleged sexual assault. After the
deposition, Valliani served a request for production, asking for the journal because
it was relevant to the suit. In response to the request, Khan’s attorney, Alphonsus
Ezeoke, filed the following equivocal objection: “Plaintiff objects to this request
because the information is intrusive and irrelevant. Plaintiff does not have the
document responsive to this request.”
Defense counsel responded to Ezeoke by written letter, asking his client to
comply with the discovery request because the response “is in direct conflict with
our understanding.” Defense counsel stated, “It is our understanding that the
Plaintiff is in possession of her journals.” Defense counsel warned that he would
file a motion to compel if the journal was not produced. Ezeoke responded to the
warning as follows: “You may have to file the motion with the court because my
client does not have the requested information. Furthermore, the diary contains
other personal information that cannot and will not be provided to your perverted
client.”
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Defense counsel accepted Ezeoke’s invitation and filed the motion to
compel, asserting that Khan was making inconsistent representations regarding the
existence of the journal. The motion was brought under Rule 215 and requested an
award of attorney’s fees. Ezeoke filed another equivocal response, reciting
simultaneously that the journal “does not exist” and that its contents are
“irrelevant.”
The trial court conducted a hearing on January 28, 2013, which only the
attorneys attended. Ezeoke asserted that the request for production was overbroad
because defense counsel was seeking all of Khan’s journals, including those that
predated the assault. The trial court rejected this characterization, stating that the
discovery request was specifically tailored to “any journals, diaries, and/or writings
reflecting the incident made the basis of this lawsuit and/or the injuries for which
Plaintiff seeks recovery.”
Ezeoke then responded that his client had lost the one journal that described
the alleged assault. Ezeoke claimed that Khan had shown him another journal, but
that it did not describe the assault. When asked to account for her deposition
testimony, Ezeoke explained that Khan was confused. The trial court instructed
Ezeoke that he needed to either “produce the diary that she’s talking about in the
deposition, or you can bring her down here, and I’ll put her on the stand and let
[defense counsel] question her about why she answered the question the way she
did.” The court then granted the motion to compel and ordered Khan to comply
with the discovery request in a month’s time. To compensate Valliani for the time
spent prosecuting the motion to compel, the court also ordered Khan to pay $400 in
attorney’s fees to opposing counsel. The order did not specify the payment of the
fees by any set time.
3
When Khan did not comply with the trial court’s order, Valliani moved the
court to hold her in contempt. The motion was brought under Rule 215, just as
before. Valliani also requested a show cause order, and asked the court to sanction
Khan by assessing additional attorney’s fees against her. Ezeoke filed a response to
the motion saying that Khan had searched for her journals but could not find them.
Ezeoke did not explain why the $400 had not been paid or make any argument that
the trial court’s order was unclear as to the date of payment.
The trial court conducted a contempt hearing on April 8, 2013. During the
hearing, Khan personally testified that she no longer writes in journals and that she
could not comply with the court’s order because all of her journals have been lost.
Khan suggested that her younger sister might have taken the journals and
irretrievably misplaced them.
Khan also testified that she could not pay the $400 in attorney’s fees because
of other financial obligations. Khan stated that she is currently paying off a car
note and college tuition, and that any extra money she gets from her job is sent to
her mother because her father is in the hospital and unable to work. The trial court
suggested that Khan should give up her cell phone and use the money from that bill
to pay the attorney’s fees. Khan testified that her cell phone bill was approximately
fifty dollars per month.
Ezeoke argued during the hearing that the court should not have sanctioned
Khan because her discovery response was true. The court refused to reconsider the
sanction, saying that defense counsel was “entitled on behalf of his client to get to
the bottom of [Khan’s deposition testimony] and find out what happened to those
diaries.” Ezeoke then argued that the $400 award was a judgment of the court, and
that Valliani should attempt to collect it himself. Ezeoke objected that the court
was “trying to enforce his attorney’s fee for him.” The court responded that “these
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are attorney’s fees for contempt of court,” and that Khan is “either going to pay the
$400 or I’m going to dismiss her lawsuit.” The court ordered payment by June 7,
2013, affording Khan roughly two months to collect the money.
The court did not assess any additional sanctions against Khan, citing her
testimony that she did not have the journals and her inability to comply with the
motion to compel. Valliani requested a spoliation instruction for the destruction of
the journals, which the court refused. The court ruled orally, however, that it would
exclude any testimony regarding the journals when the case proceeded to trial. This
ruling was noted on the court’s docket sheet but it was not included in the order.
The order also contained no warning that Khan’s suit would be dismissed for
failing to pay the fee.
When Khan did not pay the $400 by the required date, Valliani filed a
motion to dismiss the lawsuit. Valliani referenced the previous order and the
court’s oral admonishment that the case would be dismissed if Khan did not pay
the fee. Valliani did not cite any specific authority for the dismissal.
Ezeoke moved for a continuance, claiming that he needed to make an
emergency trip to Africa. Ezeoke did not explain Khan’s failure to pay. Instead, he
repeated his argument that the sanction of $400 was unfair when Khan never had
the journal. Ezeoke’s law partner appeared at the dismissal hearing and argued the
continuance, but the court never made a ruling. When it determined that Khan had
not paid the $400 in attorney’s fees, the court dismissed her suit with prejudice.
The only finding recited in the order is that Khan “failed to follow the Court’s
Orders on several occasions.”
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ISSUES PRESENTED
Khan presents three issues on appeal. In her first issue, Khan asserts that the
trial court’s dismissal order was an impermissible “death penalty” sanction. In her
second issue, Khan asserts that the trial court erred by failing to consider the
motion for continuance. In her third issue, she asserts that the trial court abused its
discretion by ordering her to pay $400 as a discovery sanction. We begin with the
third issue.
DISCOVERY SANCTION
We review a trial court’s decision to impose sanctions for an abuse of
discretion. See Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex.
2006) (per curiam). A trial court abuses its discretion when it acts arbitrarily,
unreasonably, or without reference to guiding rules or principles. See Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985).
A trial court may impose sanctions on any party that abuses the discovery
process. See Tex. R. Civ. P. 215. If a party fails to comply with proper discovery
requests, the court may enter orders “as are just,” including an order for attorney’s
fees. See Tex. R. Civ. P. 215.2(b)(8). For a sanction to be just, it must bear a direct
relationship to the offensive conduct, and it must not be excessive. See
TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991)
(orig. proceeding).
A sanction that relates directly to the offensive conduct is one that is directed
against the abuse and toward remedying the prejudice caused to the innocent party.
See Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003) (per curiam). The
sanction, in other words, must be visited upon the offender, and the court must
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attempt to determine whether the offensive conduct is attributable to counsel only,
to the party only, or to both counsel and the party together. Id.When assessing excessiveness, the punishment should always fit the crime,
and sanctions should be no more severe than necessary to further the purposes of
sanctions generally. See Cire v. Cummings, 134 S.W.3d 835, 839 (Tex. 2004). A
court must consider the availability of appropriate lesser sanctions, and, in all but
the most egregious and exceptional cases, the court must first assess lesser
sanctions before resorting to case-determinative or death penalty sanctions. Id. at
842.
The trial court imposed the discovery sanction when it granted the motion to
compel. When deciding whether the trial court abused its discretion by imposing
the discovery sanction, we consider only the record at the time of the trial court’s
ruling, and not the evidence that was produced thereafter.
The evidence attached to the motion to compel consisted of an excerpt from
Khan’s deposition, in which Khan had testified that she had “a couple journals,”
including one where she had written about the alleged assault. The evidence also
consisted of Khan’s discovery responses, which contained equivocal statements
regarding the existence of the requested journal. In a single letter, Khan’s attorney,
Ezeoke, ambiguously represented that Khan did not have the journal, and that she
would not produce the journal absent a court order because it contained personal
information.
Khan herself did not appear at the motion to compel hearing. Ezeoke
asserted at various times during the hearing that Khan had lost her journal, and
that, during her deposition, she was mistakenly referring to another journal that
discussed the litigation but not the facts of the assault. Normally, an attorney must
be under oath for his statements to be considered testimonial. See Banda v. Garcia,
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955 S.W.2d 270, 272 (Tex. 1997) (per curiam). However, the opponent of the
testimony can waive the oath requirement by failing to object when the opponent
knows or should have known that an objection is necessary. See Approximately
$30,400 v. State, No. 14-07-00342-CV, 2008 WL 4472931, at *3 (Tex. App.—
Houston [14th Dist.] Oct. 7, 2008, no pet.) (mem. op.). Even if Ezeoke’s
statements could have been taken as testimonial in this case, the trial court was free
to believe, based on Khan’s deposition testimony and Ezeoke’s equivocal
responses to discovery, that Khan actually possessed the requested journal and was
refusing to produce it. Because the record supports a finding that Khan had
violated the rules of discovery, we conclude that there is a direct nexus between the
offensive conduct and the sanction imposed.1
The purposes of discovery sanctions are threefold: (1) to secure compliance
with the discovery rules, (2) to deter other litigants from similar misconduct, and
(3) to punish violators. See Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 849
(Tex. 1992) (orig. proceeding); Cognata v. Down Hole Injection, Inc., 375 S.W.3d
370, 379 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). The sanctions here
satisfy all three purposes. Khan testified that she had the requested journal, but
then she failed to produce it. Ezeoke also claimed that he had a seen a journal, and
yet he too produced nothing to opposing counsel.2 The trial court could have
1
The trial court appeared to struggle with sorting out the facts of this case. After reciting
Khan’s deposition testimony, the court openly questioned why she claimed to have a journal that
she would not produce. The court also expressed difficulty with comprehending Ezeoke, who
claimed that he had personally reviewed one journal, yet repeatedly asserted that Khan did not
have any journals. Many of the problems in this case seem to be attributable to Ezeoke rather
than Khan. Had Ezeoke refrained from his aggressive rhetoric and stated, professionally and
without ambiguity, that Khan had lost the journal discussed in the deposition, there is a
likelihood that sanctions could have been avoided altogether. Nevertheless, the trial court was
free to find, based on this record, that Khan was responsible and deserving of sanctions.
2
During the contempt hearing, Ezeoke changed his story and claimed that he never saw a
journal.
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determined that Khan was flouting the rules of discovery, and that she needed to be
sanctioned to punish her violation and to deter others from following her example.
Defense counsel requested $750 in attorney’s fees, claiming that he had
spent approximately three hours prosecuting the motion to compel. This time
included the preparation of the motion itself, as well as other efforts spent in
arranging a hearing because Ezeoke was out of the country. The trial court reduced
defense counsel’s request to $400. Ezeoke produced no evidence contradicting the
court’s assessment of the appropriateness of these fees. Based on the record as a
whole, we conclude that the assessment was not excessive and that the trial court
did not abuse its discretion by imposing the discovery sanction. Cf. Stromberger v.
Turley Law Firm, 315 S.W.3d 921, 924–25 (Tex. App.—Dallas 2010, no pet.)
(reduced discovery sanction of $5,300 was not excessive where evidence showed
that sanctioned party ignored a subpoena and delayed efforts to take a deposition,
causing more than twenty-six hours of attorney’s fees).
Khan’s third issue is overruled.
DISMISSAL WITH PREJUDICE
We turn now to Khan’s first issue, which challenges the trial court’s
dismissal order. Valliani’s motion to dismiss did not cite any legal rule for
dismissing Khan’s suit with prejudice. The trial court’s final order is also silent on
the source of its dismissal power. Because the record is unclear as to the legal
theory for dismissal, we review whether the trial court had the power to dismiss
under Rule 215, under its general contempt power, or under its inherent authority
to manage its own docket. The court’s order will be affirmed if it was proper under
any legal theory supported by the record. See Bilnoski v. Pizza Inn, Inc., 858
S.W.2d 55, 58 (Tex. App.—Houston [14th Dist.] 1993, no writ).
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Rule 215
If a party disobeys an order to compel, the trial court may enter an order
“striking out the pleadings or parts thereof . . . or dismissing with or without
prejudice the action or proceedings.” See Tex. R. Civ. P. 215.2(b)(5). As with other
discovery sanctions, the court’s dismissal order must be “just” under the
circumstances.
Khan asserts that the dismissal order runs afoul of TransAmerican because it
is excessive, and therefore unjust. In TransAmerican, the Texas Supreme Court
held that death penalty sanctions are warranted only if a party’s hindrance of the
discovery process justifies a presumption that its claims or defenses lack merit. Id.
at 919.
Generally, courts will uphold the use of death penalty sanctions if a party
acts in flagrant bad faith, such as by destroying or fabricating evidence that is
material to the case. See, e.g., Cire, 134 S.W.3d at 841 (party destroyed important
audio tapes); JNS Enter., Inc. v. Dixie Demolition, LLC, 430 S.W.3d 444, 456
(Tex. App.—Austin 2013, no pet.) (parties produced false contract documents).
Actions that callously disregard the rules of discovery warrant a presumption that
the actor’s claims are meritless because the very purpose of discovery is “to seek
the truth, so that disputes may be decided by what the facts reveal, not by what
facts are concealed.” See Jampole v. Touchy, 673 S.W.2d 569, 573 (Tex. 1984)
(orig. proceeding), overruled on other grounds by Walker v. Packer, 827 S.W.2d
833 (Tex. 1992) (orig. proceeding).
Here, Khan’s failure to pay $400 in attorney’s fees reveals nothing about the
truth or merit of her claims. Cf. Hamill v. Level, 917 S.W.2d 15, 17 (Tex. 1996)
(per curiam) (death penalty sanctions not justified where plaintiff made an
untimely discovery response and failed to pay $200 in attorney’s fees). Although
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Khan had several months to pay the fee and she had been warned at least once
about the failure to do so, we cannot say that her behavior, even if done in flagrant
bad faith, warrants the severest of civil sanctions. See Fletcher v. Blair, 874
S.W.2d 83, 85–86 (Tex. App.—Austin 1994, writ denied) (death penalty sanctions
not justified, even though plaintiff had lied about her education and income, where
lies did not directly relate to the underlying claim for personal injuries).
Valliani contends that this is an exceptional case where sanctions should be
upheld. Valliani relies primarily on Gonzales v. Conoco, Inc., 722 S.W.2d 247(Tex. App.—San Antonio 1986, no writ), a case that was decided under very
similar facts. There, the court of appeals affirmed the use of death penalty
sanctions when the plaintiffs failed to timely pay more than $2,500 in attorney’s
fees, which had previously been assessed as a sanction for discovery abuse. Id. at
250. Gonzales was issued several years before the Texas Supreme Court’s decision
in TransAmerican, and it contains no discussion of the limits on a trial court’s
power to dismiss a suit. Likewise, there is no analysis that explains, or concludes,
that a party’s failure to pay attorney’s fees justifies a presumption that the party’s
claims lack merit. We decline to follow Gonzales to the extent it relies on
standards that predate TransAmerican and its progeny, which are binding on this
court.
If the trial court exercised its statutory power under Rule 215 by dismissing
Khan’s suit, then the dismissal order is unjust. Khan’s failure to pay a fee of $400
does not justify a presumption that her claims lack merit. The trial court should
have considered lesser sanctions, such as abating the case until the fee was paid, or
including payment of the fee in a final judgment. The dismissal cannot be
supported under Rule 215.
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Contempt Power
Because it is unclear whether the trial court actually intended to dismiss
Khan’s suit under Rule 215, we next consider whether dismissal was proper as an
order in contempt. Generally, decisions in contempt proceedings may not be
reviewed by an appellate court, even where a party seeks to appeal the contempt
order along with an appealable judgment. See Metzger v. Sebek, 892 S.W.2d 20, 54
(Tex. App.—Houston [1st Dist.] 1994, writ denied). However, if the trial court’s
judgment does not come within the confines of a true contempt order, then it
should be recharacterized. See Galtex Prop. Investors, Inc. v. City of Galveston,
113 S.W.3d 922, 927 (Tex. App.—Houston [14th Dist.] 2003, no pet.). It is not the
form of the court’s order, but the character and function of the order that
determines its classification. See Del Valle Indep. Sch. Dist. v. Lopez, 845 S.W.2d
808, 809 (Tex. 1992).
A court has the inherent power to enforce its orders through contempt
proceedings. See Ex parte Gorena, 595 S.W.2d 841, 845 n.2 (Tex. 1979) (orig.
proceeding). A court can exert its contempt power through two types of contempt
orders—civil and criminal. See Ex parte Hawkins, 885 S.W.2d 586, 588 (Tex.
App.—El Paso 1994, orig. proceeding). Criminal contempt orders and civil
contempt orders serve distinct purposes. A criminal contempt order is used to
punish a party for disobedience of a court order. Id. The maximum punishment that
a district court can assess under its criminal contempt power is a fine of not more
than $500, or confinement in the county jail for not more than six months, or both.
See Tex. Gov’t Code § 21.002(b).
A civil contempt order is used to coerce a party to comply with an order of
the court, usually through a conditional penalty. See Hawkins, 885 S.W.2d at 588.
There is no express statutory limit to the fine that a court can impose through a
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civil contempt order. See Cadle Co. v. Lobingier, 50 S.W.3d 662, 667–68 (Tex.
App.—Fort Worth 2001, pet. denied) (holding that civil contempt is not governed
by Section 21.002 of the Government Code, citing Ex parte Shaklee, 939 S.W.2d
144, 145 n.2 (Tex. 1997) (orig. proceeding)). If a fine is assessed in a civil
contempt order, the court cannot order it to be paid to a private litigant. See
Cannan v. Green Oaks Apartments, Ltd., 758 S.W.2d 753, 754 (Tex. 1998) (per
curiam) (“[I]n a contempt proceeding a private party cannot recover damages for a
violation of a court order.”); Cadle, 50 S.W.3d at 669.
The trial court’s dismissal order does not resemble either a criminal
contempt order or a civil contempt order because it does not send Khan to jail or
assess a fine against her. Instead, the dismissal order adjudicates the merits of
Khan’s claims and precludes her from bringing suit again. To the extent the trial
court exercised its contempt power by issuing the order to dismiss, we conclude
that the court exceeded its authority.
Inherent Authority
Because the court warned Khan, sua sponte, that her case would be
dismissed if she failed to pay the $400 sanction, we also examine a trial court’s
inherent authority to dismiss a case.
A trial court has the inherent authority to manage its own docket and dismiss
a case for want of prosecution. See Villarreal v. San Antonio Truck & Equip., 994
S.W.2d 628, 630 (Tex. 1999); Kadi v. New Tech Eng’g, LP, No. 14-12-00872-CV,
2013 WL 2386654, *2 (Tex. App.—Houston [14th Dist.] May 30, 2013, pet.
denied) (mem. op.). Here, however, there is no indication that Khan had abandoned
her claims. The trial court specifically found that dismissal was warranted because
Khan had failed to obey the court’s orders. Based on the court’s oral statements at
the hearing on the motion to dismiss, the court’s ruling seems to have been
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motivated entirely by Khan’s failure to pay a fee. Thus, if the trial court correctly
dismissed the case through its inherent authority, its ruling cannot be supported by
a failure to prosecute. See also Frazier v. Progressive Cos., 27 S.W.3d 592, 594
(Tex. App.—Dallas 2000, pet. dism’d) (generally, a dismissal for want of
prosecution is done without prejudice, not with prejudice).
A trial court also has the inherent authority to impose sanctions on its own
motion. See In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997) (orig. proceeding). We
normally afford a trial court wide discretion when assessing appropriate sanctions.
See Chrysler Corp., 841 S.W.2d at 852–53; Daniel v. Kelley Oil Corp., 981
S.W.2d 230, 234 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). Sanctions,
including orders providing for dismissal, can be appropriate when a party fails to
comply with discovery requests or fails to provide or permit discovery. See Saxton
v. Daggett, 864 S.W.2d 729, 733–34 (Tex. App.—Houston [1st Dist.] 1993, no
writ) (citing Tex. R. Civ. P. 215).
This court has previously recognized that there are limits to a trial court’s
inherent authority to dismiss a case. In Stubblefield v. Stubblefield, we held that a
trial court had no inherent authority to dismiss a case when a party failed to pay the
opposing side $672 as a reimbursement for travel expenses. See 818 S.W.2d 221,
222 (Tex. App.—Houston [14th Dist.] 1991, no writ). Similarly, in In re N.R.C.,
we held that a trial court abused its discretion by striking all of a party’s witnesses
in a parental-termination suit when the party failed to pay interim attorney’s fees to
an attorney ad litem. See 94 S.W.3d 799, 808–09 (Tex. App.—Houston [14th
Dist.] 2002, pet. denied). Although the sanctions in N.R.C. did not technically
result in a dismissal order, we concluded that the sanctions were case-
determinative because they effectively “eviscerated” the party’s ability to present
the merits of her defense. Id. at 810. We also held that the sanctions were
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inappropriate because they were imposed “for behavior wholly unrelated to
discovery.” Id. at 809.
Consistent with Stubblefield and N.R.C., we conclude that the trial court had
no inherent authority to dismiss Khan’s suit for failing to pay the $400 discovery
sanction. The court abused its discretion by doing otherwise.
CONCLUSION
We need not address Khan’s remaining issue regarding the motion for
continuance. We sustain Khan’s first issue, and hold that the trial court exceeded
its statutory authority and its inherent authority by dismissing Khan’s suit with
prejudice. The trial court’s dismissal order is reversed, and the cause is remanded
for additional proceedings consistent with this opinion. In all other respects, the
trial court’s judgment is affirmed.
/s/ Tracy Christopher
Justice
Panel consists of Justices Christopher, Jamison, and McCally.
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