Great Western Drilling, Limited v. Bill Alexander ( 2009 )


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  • Opinion filed October 8, 2009
    In The
    Eleventh Court of Appeals
    __________
    No. 11-08-00110-CV
    ________
    GREAT WESTERN DRILLING, LIMITED, Appellant
    V.
    BILL ALEXANDER, Appellee
    On Appeal from the 238th District Court
    Midland County, Texas
    Trial Court Cause No. CV 44,955
    OPINION
    Appellant Great Western Drilling, Limited (herein Great Western) brings this appeal from
    a take-nothing verdict in its suit against appellee Bill Alexander (herein Alexander). In the suit,
    Great Western sought to recover damages suffered by it because Alexander allegedly conspired with
    his client Marilyn Paschal (herein Paschal) to convert certain insurance proceeds it claimed. For
    reasons we later discuss, we affirm the judgment of the trial court.
    A review of the somewhat convoluted history of the events giving rise to this suit is necessary
    to a proper discussion of the appeal. Originally, Great Western filed suit against Paschal asserting
    that Paschal had conspired with her husband Alan Paschal, who died on June 23, 2003, to embezzle
    money from Great Western, which was used to purchase insurance policies issued by Cuna Mutual
    Life Insurance Company, Stonebridge Life Insurance Company, and U.S. Financial Life Insurance
    Company with death benefits totaling $775,0961 received by Paschal after the death of her husband.
    Great Western further sought the imposition of a constructive trust on those proceeds.
    Later, and in the course of that proceeding, Great Western also sued Alexander and
    William R. Bowden Jr. (herein Bowden), Paschal’s former attorney, for conversion of the proceeds
    of those policies. Before the trial of the claims against Paschal, the trial court severed the portion
    of the suit involving Great Western’s claims against Alexander and Bowden and ordered a separate
    trial of those matters. The original suit against Paschal was tried and, on February 5, 2005, resulted
    in a judgment against Paschal in favor of Great Western.
    Later, and before trial of this severed cause, Great Western settled with Bowden, and the case
    proceeded to trial against Alexander alone. That trial commenced on October 29, 2007, and on
    November 1, 2007, the case was submitted to the jury on three issues.
    In its charge, because of its pretrial partial summary judgment rulings, the trial court
    instructed the jury that (1) Great Western’s stolen funds were used to pay the insurance premiums
    on the Cuna, U.S. Financial, and Stonebridge policies in dispute in Cause No. 44196 (the other
    cause); (2) Great Western was the equitable owner of the Cuna, U.S. Financial, and Stonebridge
    policies; (3) former defendant Bowden collected the Cuna, U.S. Financial, and Stonebridge policies
    in the amount of $775,096; (4) on September 16, 2003, Bowden delivered proceeds from the policy
    proceeds to Paschal in the amount of $732,614.15; and (5) Paschal delivered those proceeds to
    Alexander on September 16, 2003.
    The trial court then submitted three questions to the jury for its decision. The first question
    and instruction submitted was as follows:
    Did Bill Alexander on September 16, 2003 have notice that Great Western
    was the owner of the life insurance proceeds paid to Marilyn Paschal by Cuna,
    Stonebridge and U.S. Financial?
    You are instructed that the term ”Notice” is broadly defined as information
    concerning a fact actually communicated to a person, derived by him from a proper
    1
    Two other life insurance policies had been purchased by the Paschals from United of Omaha that provided for a total of
    $450,000 in death benefits. The proceeds from those policies were interpleaded by the insurer and later collected by Great Western
    to partially satisfy its judgment against Paschal.
    2
    source, or presumed by law to have been acquired. Notice may be actual or
    constructive. Actual notice results from personal information or knowledge, as well
    as those facts which reasonable inquiry would have disclosed. Constructive notice
    is notice the law imputes to a person not having personal information or knowledge.
    Jury Questions Nos. Two and Three were conditioned upon an affirmative answer to
    Question No. One. Jury Question No. Two inquired if, on September 16, 2003, or September 22,
    2003, Alexander converted personal property of Great Western in the form of the life insurance
    proceeds paid to Paschal by the life insurance companies. In connection with Jury Question
    No. Two, the jury was instructed as to the legal definition of the term “convert.”
    Jury Question No. Three, with an instruction, inquired as to the amount of compensation to
    which Great Western would be entitled if the jury found a conversion. In accordance with the
    instruction, because of its negative answer to Jury Question No. One, the jury did not answer
    Questions Nos. Two and Three.
    In pursuing this appeal, Great Western presents five issues for our review. In the first three
    of those issues, it contends the trial court erred in not granting its motion for judgment
    notwithstanding the jury verdict because the evidence established as a matter of law that
    (1) Alexander converted life insurance proceeds belonging to it in the amount of $250,000,
    (2) Alexander was on “notice” that Great Western was the owner of the life insurance proceeds, and
    (3) the evidence established as a matter of law that the funds converted by Alexander were in the
    amount of $250,000 even though the jury did not answer Questions Nos. Two and Three. In support
    of its contention that it was entitled to a judgment notwithstanding the jury verdict, Great Western
    also cites and relies upon the trial court pretrial summary judgment ruling that gave rise to the
    declarations given the jury in the court’s charge as being sufficient as a matter of law to entitle it to
    a judgment notwithstanding the verdict that Alexander had converted funds in the amount of
    $250,000.
    In its fourth issue, Great Western posits that its motion for new trial should have been granted
    because the jury’s answer to Question No. One was so against the great weight and preponderance
    of the evidence as to be manifestly unjust. In its fifth issue, and in the alternative, it contends that
    its motion for new trial should have been granted because the trial court erred in admitting the expert
    testimony of Alexander’s witness Steven L. Lee because his testimony included opinions on pure
    3
    questions of law, lacked relevance, and was unreliable, all of which combined to probably cause the
    rendition of an improper judgment.
    At trial, in addition to Lee’s testimony, portions of Bowden’s deposition and Alexander’s
    deposition were admitted into evidence, and Alexander also testified in person. Of necessity, the
    issues presented by Great Western require us to reference some of the pertinent trial evidence.
    In the course of his testimony, Alexander averred that he first heard of Alan’s death by
    reading a newspaper account on June 24, 2003. He also said that in the past, and prior to that time,
    he had drafted a marital agreement for Alan that provided that Alan would obtain a life insurance
    policy on himself that would pay Paschal one million dollars in the event of Alan’s death.
    Alexander said that he received two calls from Paschal on September 4, 2003, and met her
    at his office on September 5, 2003. At that time, Paschal told him that she needed to hire a lawyer
    because Great Western had sued her. On September 10, 2003, he prepared, and entered into, an
    employment contract with Paschal. Although the contract provided for the payment to him of an
    undivided one-third contingent fee “in the funds in dispute in the litigation whereby Great Western
    Drilling, Limited is attempting to recover the insurance proceeds paid to you and to be paid to you,
    totaling One Million One Hundred Twenty Five Thousand ($1,125,000.00),” Alexander testified that
    he had not actually seen any pleadings in the case nor had he seen any evidence to support Great
    Western’s claims. He acknowledged that “he knew there was a dispute.” On that day, Paschal gave
    him a check for a “nonrefundable” attorney’s fee of $200,000 and an expense advance of $50,000.
    On September 10, Alexander also wrote Bowden, Paschal’s criminal lawyer, and said that he
    had been retained in the civil litigation and that Paschal wanted the money on deposit in Bowden’s
    trust account forwarded to him. He averred that Paschal did not specifically identify the money, and
    he did not ask her where it came from. On September 16, 2003, Paschal brought him a check for
    $732,614.51 drawn on Bowden’s trust account, which Alexander deposited in his trust account.
    Because Paschal’s earlier check for $250,000 to him had not been honored by the bank as the result
    of a letter from Great Western, she paid him the $250,000 from the funds in the trust account.
    After reviewing Great Western’s pleadings in the suit against Paschal, Alexander opined that
    the pleadings were not to be taken as true until proved and that he owed an obligation of loyalty to
    Paschal and had no duty to Great Western. He said that Paschal was the named beneficiary under the
    4
    policies, that he was not aware of anyone who had a superior right to the proceeds, and that she denied
    to him that she had ever entered into a conspiracy with her husband to embezzle funds or that she had
    any knowledge of any embezzlement by her husband. He admitted that he did not explore trying to
    get his fee from other assets that might have belonged to Paschal.
    Discussion
    A trial court may grant a motion for judgment notwithstanding the verdict if a directed verdict
    would have been proper. TEX . R. CIV . P. 301; Fort Bend County Drainage Dist. v. Sbrusch, 
    818 S.W.2d 392
    , 394 (Tex. 1991). However, if the evidence is factually insufficient, as opposed to legally
    insufficient, the trial court may not grant a judgment notwithstanding the verdict. Alm v. Aluminum
    Co. of Am., 
    717 S.W.2d 588
    , 594 (Tex. 1986). A reviewing court reviews a trial court’s denial of a
    motion for judgment notwithstanding the verdict using the same standard by which it reviews a legal
    sufficiency challenge. Navarette v. Temple Indep. Sch. Dist., 
    706 S.W.2d 308
    , 309 (Tex. 1986).
    When a party challenges the legal sufficiency of an adverse finding on an issue as to which he bears
    the burden of proof, he must demonstrate on appeal that the evidence conclusively established all the
    vital facts in support of the issue. Dow Chem. Co. v. Francis, 
    46 S.W.3d 237
    , 241 (Tex. 2001). In
    reviewing a matter of law challenge, the court must examine the record for evidence that supports the
    finding, while ignoring all evidence to the contrary. 
    Id. In conducting
    its review, the reviewing court
    must indulge every reasonable inference to support the finding, crediting favorable evidence, if a
    reasonable jury could have done so, and disregarding contrary evidence unless a reasonable jury could
    not have done so. City of Keller v. Wilson, 
    168 S.W.3d 802
    , 827 (Tex. 2005). As long as the
    evidence falls within the zone of reasonable disagreement, a court may not substitute its judgment for
    that of the factfinder. 
    Id. at 822.
    A reviewing court must uphold the jury verdict if more than a
    scintilla of evidence supports the finding. Garcia v. Ins. Co. of State of Pa., 
    751 S.W.2d 857
    , 858
    (Tex. 1988).
    In reviewing a factual sufficiency challenge on an issue upon which the appellant had the
    burden of proof, the appellant must show that the adverse finding is against the great weight and
    preponderance of the evidence. Dow Chem. 
    Co., 46 S.W.3d at 242
    . The reviewing court must
    consider and weigh all the evidence and may only set aside a verdict if the evidence is so weak or the
    finding is so against the great weight and preponderance of the evidence as to be clearly wrong and
    5
    unjust.    Recognition Commc’ns, Inc. v. Am. Auto. Ass’n, Inc., 
    154 S.W.3d 878
    , 889 (Tex.
    App.—Dallas 2005, pet. denied). The jury is the sole judge of the credibility of the witnesses and the
    weight to be given their testimony. City of 
    Keller, 168 S.W.3d at 819
    ; Jones v. Tarrant Utility Co.,
    
    638 S.W.2d 862
    , 866 (Tex. 1982). When enough evidence is before the factfinder that reasonable
    minds could differ on the meaning of the evidence or the conclusions or inferences to be drawn from
    that evidence, the court may not substitute its judgment for that of the jury. Herbert v. Herbert, 
    754 S.W.2d 141
    , 144 (Tex. 1988).
    Issues 1, 2, 3, and 4
    In argument under its first four issues, Great Western posits that Alexander’s right to retain
    any part of the insurance proceeds was no greater than the right of Paschal if Alexander had
    knowledge of Great Western’s claims to those insurance proceeds even before those claims were
    adjudicated. It then reasons that there “is no evidence in the record that Alexander lacked notice of
    facts which reasonable inquiry would have disclosed at the time he received his nonrefundable
    retainer that Great Western’s embezzled funds had been used in the payment of the life insurance
    premiums.” Thus, it concludes that, because Alexander’s denial of notice is conclusively negated by
    the letter agreement with Paschal and his testimony that he knew there was a dispute over ownership
    of the proceeds, it was entitled to a directed verdict on its conversion claim against him.
    That argument requires us to review the duties and obligations of an attorney. That review
    is important because it would be no exaggeration to say that the existence of a free and untrammeled
    bar is essential to the existence of a free democracy and to the fundamental protection of the rights
    of the citizens of such a democracy. Indeed, it has been iterated and reiterated that the public has an
    interest in “loyal, faithful and aggressive representation by the legal profession.” Maynard v.
    Caballero, 
    752 S.W.2d 719
    , 721 (Tex. App.—El Paso 1988, writ denied). In pursuing that obligation,
    an attorney has the obligation and duty of zealously representing his client within the boundaries of
    the law. See Bradt v. West, 
    892 S.W.2d 56
    , 71 (Tex. App.—Houston [1st Dist.] 1994, writ denied).
    Indeed, in the seminal case of Morris v. Bailey, 
    398 S.W.2d 946
    , 947 (Tex. Civ. App.—Austin 1966,
    writ ref’d n.r.e.), the court articulated that, in fulfilling his or her duty, an attorney has “the right to
    interpose any defense or supposed defense and make use of any right in behalf of such client or clients
    as [the attorney] deemed proper and necessary, without making himself subject to liability in
    6
    damages.” See also Renfroe v. Jones & Assocs., 
    947 S.W.2d 285
    , 288 (Tex. App.—Fort Worth 1997,
    writ denied).
    Great Western acknowledges and supports the general rule that an attorney has no duty to
    anyone but his or her client. However, it argues, as with most general rules, there is an exception to
    this one. For example, it cites Likover v. Sunflower Terrace II, Ltd., 
    696 S.W.2d 468
    , 472 (Tex.
    App.—Houston [1st Dist.] 1985, no writ), for the proposition that an attorney is liable if the attorney
    knowingly commits a fraudulent act that injures a third person or if he knowingly enters into a
    conspiracy to defraud a third person. In that case, the plaintiff had alleged, and a jury found, that the
    attorney had helped his client in perpetrating a fraudulent business scheme involving the sale of an
    apartment complex. In this case, there were no pleadings and, indeed, no fact findings by a trier of
    fact that Alexander had participated in fraud or was engaged in a conspiracy.
    Great Western also cites and relies upon the decision by this court in Ellis v. City of Dallas,
    
    111 S.W.3d 161
    (Tex. App.—Eastland 2003, no pet.). In that case, this court, approving the
    definition of conversion as “the exercise of dominion and control over property inconsistent with, and
    in denial of, the true owner or the party having the right of possession,” affirmed a trial court
    judgment against an attorney for the conversion of a workers’ compensation settlement he received
    and deposited in his trust account for his personal injury client. 
    Id. at 163-166.
    However, in that case,
    we specifically noted that the attorney “was familiar with the workers’ compensation laws in effect
    at that time and knew that the City had the right to recover, to the extent of the workers’ compensation
    payments it had made to or on behalf of [his client], the ‘first money’ from [his client’s] settlement
    with the third parties.” 
    Id. at 164-65.
    That is not the case here. At the time Alexander received the
    funds in his trust account, there was no such perfected or legal right to the funds in question.
    Great Western additionally cites the cases of Nacol v. Metallic Development Corp., 
    614 S.W.2d 172
    (Tex. Civ. App.—Fort Worth 1980, writ dism’d); McAnelly v. Chapman, 
    18 Tex. 198
    (1856); and Oliver v. Chapman, 
    15 Tex. 400
    (1855), in support of its proposition that Alexander was
    guilty of conversion. However, those cases are distinguishable. In Nacol, again an appeal from a trial
    verdict, the trial judge made express findings that Nacol had knowingly bought stolen property in the
    past, that the seller of the metals there in question “may or may not” have told Nacol that they were
    stolen, that Nacol had invoked the privilege against self-incrimination when asked about his
    7
    knowledge that the metals were stolen, and that Nacol had advised Metallic that the raising of an
    award for return of the metals would assure 
    recovery. 614 S.W.2d at 175
    . The appellate court held
    that those facts were sufficient to support a finding of notice and willful conversion. 
    Id. No such
    notice facts are shown here.
    Both Oliver and McAnelly were appeals from jury findings and concerned the question
    whether the evidence was sufficient to support those findings. In Oliver, an action to set aside certain
    deeds from the plaintiff to the defendant, the court noted that evidence such as the plaintiff’s
    feebleness of body and “imbecility of mind,” confidential relations between the parties, the absence
    of any consideration, the “embarrassed state of his affairs,” and “his enfeebled condition of body and
    mind” were sufficient to justify the finding of fraud by the jury. 
    Oliver, 15 Tex. at 403
    . In this case,
    of course, there are no such findings. In McAnelly, the jury had found that McAnelly knew of the
    plaintiff’s claim to the property there in question but “he carried it off and disposed of it.” 
    McAnelly, 18 Tex. at 199
    .
    Likewise, in Newton v. Porter, 
    69 N.Y. 133
    (1877), also cited by Great Western, the trial court
    expressly found that the defendant’s attorneys had actual notice of the theft of the bonds there in
    question and the use of the proceeds of their sale at the time they received the notes and mortgages.
    
    Id. at 140.
    In Pena v. Toney, 
    160 Cal. Rptr. 4
    (Cal. 3d Dist. Ct. App. 1979), the court held an attorney
    was not a bona fide purchaser with respect to an automobile received by him as a fee for
    representation in a criminal case. The automobile and certificate of title were in possession of the
    police, and a cause of action could not be maintained for property to which the attorney never
    acquired title. 
    Id. at 7-9.
    The facts in those cases are distinguishable from those extant here.
    To bring a conversion claim, an aggrieved party must have either ownership, possession, or
    the right to immediate possession of the property. Crutcher v. Cont’l Nat’l Bank, 
    884 S.W.2d 884
    ,
    888 (Tex. App.—El Paso 1994, writ denied). As we have noted, at the time it retired to consider its
    verdict, the jury had before it Alexander’s testimony that on September 16, 2003, although he did
    know of the pending dispute and was employed to represent Paschal, his client was the named
    beneficiary under the policies and that she had denied to him any participation in embezzlement.
    Properly charged as to the legal meaning of conversion notice, the jury finding of Alexander’s lack
    8
    of notice was not so against the great weight and preponderance of the evidence as to be manifestly
    unjust.
    Accordingly, Great Western’s first four issues must be, and are hereby, overruled.
    Issue 5
    In its fifth issue, Great Western argues it should have been granted a new trial because
    Alexander’s expert witness Steven L. Lee (herein Lee) expressed opinions on pure questions of law
    that lacked relevance, were demonstrated to be unreliable, and combined to probably cause the
    rendition of an improper judgment.
    In considering this challenge, we are governed by the standard of review on a trial court’s
    ruling on a motion for new trial, which is whether it abused its discretion in making that ruling. Dir.,
    State Employees Workers’ Comp. Div. v. Evans, 
    889 S.W.2d 266
    , 268 (Tex. 1994). A trial court
    abuses its discretion when its ruling is arbitrary, unreasonable, or without reference to any guiding
    rules or principles. K-Mart Corp. v. Honeycutt, 
    24 S.W.3d 357
    , 360 (Tex. 2000). By virtue of Texas
    Rule of Evidence 702, expert opinion testimony is admissible if that testimony will assist the trier of
    fact to determine a fact in issue, provided the expert is qualified as an expert by knowledge, skill,
    experience, training, or education. TEX . R. EVID . 702. The expert’s testimony must also be relevant
    to the issues in the case and must be based upon a reliable foundation. Exxon Pipeline Co. v. Zwahr,
    
    88 S.W.3d 623
    , 628 (Tex. 2002).
    Specifically, Great Western challenges the admissibility of Lee’s testimony that Alexander’s
    reading of its pleadings created no duty on his part to Great Western, that it was “impossible” that
    mere allegations alone could create such a duty, and that retaliatory suits against attorneys were
    “highly improper.” It also reasons that Lee’s testimony was not reliable because he had not reviewed
    the filings in the Paschal case and could not remember if he had reviewed the judgment in that case,
    the jury charge in that case, or this court’s opinion in the appeal of that case. Great Western also
    references Lee’s admission as to his unfamiliarity with cases involving constructive trusts along with
    his admission that he thought such cases applied to land but had not looked it up.
    It is well established that in instances in which the jury is equally competent to form an
    opinion about the ultimate fact issues or the expert’s testimony is within the common knowledge of
    the jury, the trial court should exclude the expert’s testimony. K-Mart 
    Corp., 24 S.W.3d at 360
    . No
    9
    witness is authorized to offer an opinion on a pure question of law. Mega Child Care, Inc. v. Tex.
    Dep’t of Protective & Regulatory Servs., 
    29 S.W.3d 303
    , 309 (Tex. App.—Houston [14th Dist.] 2000,
    no pet.). However, an expert witness may offer an opinion on a mixed question of law and fact when
    a standard or measure is fixed by law and the question is whether the person or conduct measures up
    to that standard. 
    Id. In contending
    that the admission of Lee’s testimony requires reversal, Great Western places
    primary reliance upon the rationale espoused by the court in Greenberg Traurig of N.Y., P.C. v.
    Moody, 
    161 S.W.3d 56
    , 95 (Tex. App.—Houston [14th Dist.] 2004, no pet.). That case involved a
    suit brought by investors against attorneys who had represented a corporation for securities fraud and
    other fraud claims. At trial, the jury awarded the investors a substantial money judgment against the
    attorneys. In the course of the trial, the plaintiffs had called two attorney experts, one of whom was
    a law professor who specialized in corporate law and the other was a former Texas Supreme Court
    justice. Each of the witnesses, over objection, testified as to the duties of an attorney to his client.
    In its review, the appellate court noted that the witnesses had given opinions that were incorrect
    statements of the law, had given opinions on issues that were not relevant to the matters in dispute,
    and had given opinions that should not have been admitted into evidence. 
    Id. at 97-98.
    It also noted
    that the testimony of the two witnesses covered more than eight days, over one-half of the sixteen-day
    trial time, and that all the other witnesses were fact witnesses or attorney’s fee experts. 
    Id. at 99-100.
    It was in view of all this that the appellate court concluded that the admission of the testimony was
    not only error but probably caused the rendition of an improper judgment. 
    Id. at 100.
            However, in this case, Great Western had alleged that Alexander, admittedly an attorney
    representing an opposing party, had violated some sort of duty toward it that entitled it to recover
    damages and, indeed, questioned Alexander extensively about whether he felt he owed any duty
    toward it. As contrasted to the duties and obligations owed to his or her client by an attorney, the
    questions in the Greenberg case, the obligations and duties an attorney might owe to the opposing
    party, if any, are matters distinct from the questions before that court. Because those are questions
    and matters beyond the jurors’ understanding as laypersons, the admission of properly qualified expert
    testimony to aid the jury is permissible. See Alexander v. Turtur & Assocs., Inc., 
    146 S.W.3d 113
    ,
    10
    119-20 (Tex. 2004); Kothmann v. Cook, No. 07-05-0335-CV, 
    2007 WL 1075171
    , at *4 (Tex.
    App.—Amarillo April 11, 2007, no pet.) (mem. op.).
    Additionally, we are instructed by Texas Rule of Appellate Procedure 44.1(a)(1) that no
    judgment should be reversed on appeal on the ground of trial court error unless the error complained
    of probably caused the rendition of an improper judgment. TEX . R. APP . P. 44.1(a)(1); see also GTE
    Southwest, Inc. v. Bruce, 
    998 S.W.2d 605
    , 620 (Tex. 1999). The first question, as submitted to the
    jury, inquired whether on September 16, 2003, Alexander had notice that Great Western was the
    owner of the insurance proceeds in question and did not inquire whether Alexander owed
    Great Western any duty that he had breached. That being so, Lee’s testimony as to the duties of an
    attorney was not as material and closely connected to the question actually submitted to the jury as
    was the testimony referenced in the Greenberg case. Under the record in this case, Lee’s testimony
    was not calculated to cause the rendition of an improper jury verdict. Thus, its admission, even if
    erroneous, did not probably cause the rendition of an improper jury verdict. Great Western’s fifth
    issue is overruled.
    Alexander has also presented two cross-points that he characterizes as additional grounds for
    affirmance. However, because our disposition of Great Western’s issues requires us to affirm the trial
    court judgment, it is not necessary for us to discuss those cross-points.
    Alexander’s Cross-Appeal Point
    In his cross-appeal point, Alexander contends Great Western’s lawsuit against him was
    frivolous and groundless because it lacked both legal and evidentiary support. Thus, he argues, the
    trial court abused its discretion in failing to modify the judgment to award sanctions against
    Great Western and/or its counsel.
    In his motion seeking the assessment of sanctions against Great Western, Alexander cites and
    relies upon the provisions of TEX . R. CIV . P. 13 and TEX . CIV . PRAC. & REM . CODE ANN . § 10.001(2),
    (3) (Vernon 2002). Although the parties differ considerably concerning their application, they agree
    about the rules of law governing the assessment of sanctions,
    Rule 13 authorizes the imposition of sanctions if an attorney files an instrument that is
    groundless and is brought in bad faith or for the purposes of harassment. For the purposes of
    Rule 13, “groundless” means no basis in law or in fact and not warranted by good faith argument for
    11
    the extension, modification, or reversal of existing law. Rule 13. To determine if a pleading is
    groundless, a trial court is to use an objective standard in determining if a party or its counsel made
    a reasonable inquiry into the legal and factual bases of its claims at the time the pleading was filed.
    In re United Servs. Auto. Ass’n, 
    76 S.W.3d 112
    , 116 (Tex. App.—San Antonio 2002, orig.
    proceeding). The decision whether to impose sanctions is within the trial court’s sound discretion,
    and a court of appeals will not set aside a sanction unless an abuse of discretion is shown. Mattly v.
    Spiegel, Inc., 
    19 S.W.3d 890
    , 895 (Tex. App.—Houston [14th Dist.] 2000, no pet.). The trial court
    is entitled to consider the entire history of the case before it. Allied Chem. Co. v. DeHaven, 
    824 S.W.2d 257
    , 262 (Tex. App.—Houston [14th Dist.] 1992, no writ). “Bad faith” is not simply bad
    judgment or negligence but is, rather, the conscious doing of wrong for dishonest, discriminatory,
    or malicious purpose. Armstrong v. Collin County Bail Bond Bd., 
    233 S.W.3d 57
    , 63 (Tex.
    App.—Dallas 2007, no pet.). Our supreme court has analyzed standards under TEX . CIV . PRAC. &
    REM . CODE ANN . § 10 (Vernon 2008) by the same standards and presumptions as Rule 13 of the
    Texas Rules of Civil Procedure. See Low v. Henry, 
    221 S.W.3d 609
    , 614 (Tex. 2007).
    Suffice it to say, we have carefully considered the question, and considering the entire history
    of this case with which the trial court was familiar, we cannot find the trial court abused its discretion
    in its refusal to award Alexander sanctions. Alexander’s cross-appeal point is overruled.
    In final summary, all of Great Western’s issues are overruled; Alexander’s cross-appeal point
    is overruled; and the judgment of the trial court must be, and is hereby, affirmed.
    JOHN T. BOYD
    SENIOR JUSTICE
    October 8, 2009
    Panel consists of: Wright, C.J.,
    McCall, J., and Boyd, S.J.2
    2
    John T. Boyd, Retired Chief Justice, Court of Appeals, 7th District of Texas at Amarillo, sitting by assignment.
    12