in Re: Emeka Aludogbu ( 2020 )

Conditionally Granted in Part, Denied in Part, and Opinion Filed February 3, 2020
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-01159-CV
IN RE EMEKA ALUDOGBU AND RESTORATIVE HEALTHCARE, LLC, Relators
Original Proceeding from the 101st Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-19-00112
MEMORANDUM OPINION
Before Justices Whitehill, Partida-Kipness, and Pedersen, III
Opinion by Justice Partida-Kipness
In this original proceeding, relators Emeka Aludogbu and Restorative Healthcare, LLC
seek a writ of mandamus directing the trial court to vacate its June 21, 2019 sanctions order. In
that order, the trial court struck relators’ pleadings and awarded real party in interest Renew
Hydration, LLC (Renew) $9,073.12 in attorney’s fees. After reviewing the petition, Renew’s
response, and the mandamus record, we conditionally grant the petition as to the order striking
relators’ pleadings and deny the petition as to the attorney’s fees award.
BACKGROUND
In the fall of 2017, Aludogbu and Renew began a business relationship based on an oral
agreement. But they each have different views of the terms of that agreement. Renew maintains
that the parties agreed that Aludogbu, a chiropractor, would offer chiropractic and other services
under the Renew brand at Renew’s premises for a flat payment of $2,000 per month. Renew
contends it agreed to assume responsibility for and to finish out the premises to accommodate
Aludogbu’s chiropractic treatments, and it purchased equipment necessary for Aludogbu’s
chiropractic services. So, Renew was surprised when it discovered that Aludogbu had established
his own business, Restorative Healthcare, LLC, in June 2018 and, without Renew’s approval, had
begun operating Restorative from Renew’s premises rent-free. When Renew’s attempts to
negotiate a paid, lease agreement with relators for their use of the premises failed, Renew locked
Aludogbu out of the premises.
Aludogbu, in contrast, contends that Renew hired him to establish the proper procedures
for Renew’s new IV therapy business and to hire and train all new Renew employees. In exchange,
Aludogbu maintains Renew agreed to pay him $2,000 per month, agreed to make him a partner in
the business if the business was successful, and allowed him to use several offices in the building
for his own practice. Aludogbu asserted below that he spent considerable funds remodeling the
space to fit the needs of his practice without complaint from Renew. According to Aludogbu, when
it became apparent that Renew did not intend to make him a partner, the parties entered into a lease
agreement under which Aludogbu would pay $2,500 per month for the space he was using in the
building. Aludogbu alleges that Renew unilaterally increased the monthly rent to $6,000 after his
first payment and then illegally locked him out of his offices in December 2018.
After the lock-out, Aludogbu obtained a writ of re-entry to the premises from the justice
court and went to the premises with a moving truck to remove items. Concerned that Aludogbu
would remove Renew’s personal property if he regained access, Renew denied Aludogbu access.
Then, on January 4, 2019, Renew filed the underlying lawsuit in which it sought to enjoin
Aludogbu from taking property from its premises “until the parties have had an opportunity to
determine what belongs to whom” and asserted causes of action for breach of contract, fraud,
money had and received, and civil theft to recover damages caused by Aludogbu’s breach of the
agreement. Aludogbu and Restorative Healthcare later filed counterclaims for breach of contract,
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quantum meruit, and promissory estoppel, seeking damages related to Renew’s alleged breach of
the purported lease agreement and alleged promise to make Aludogbu a business partner.
The trial court issued a temporary restraining order on January 4, 2019 restraining and
enjoining Aludogbu and Restorative Healthcare from taking the following actions:
1. Moving, removing, disassembling, utilizing, transferring, selling, altering,
tampering with or in any way profiting from the use of the property not
listed in Exhibits A or B of the property maintained at [the premises];
2. Interfering with, disrupting, or attempting to disrupt” Renew’s ongoing
business;
3. Destroying, removing, concealing, encumbering, transferring, or otherwise
harming or reducing the value of the property not listed in Exhibits A or B
maintained at [the premises].
The court set the temporary injunction hearing for January 18, 2019.
The sanctions order at issue in this original proceeding relates to false accusations made by
Aludogbu against Renew in motions filed after the trial court issued the temporary restraining
order.
A. Aludogbu’s motions accusing Renew of stealing the Ondamed
machine
On January 7, 2019, Aludogbu filed an “Application and Affidavit for Writ of
Sequestration” and a “Motion to Issue a Writ of Arrest” in which he accused Renew of refusing to
surrender possession of certain property listed in Exhibits A and B to the temporary restraining
order. Specifically, Aludogbu alleged that Renew would not allow relators to remove a blue
chiropractic table listed in Exhibit A and “have stolen the Ondamed Complete Solution machine
listed in Exhibit B of the order along with other miscellaneous items.” Aludogbu signed the
affidavit in support of the motion to issue a writ of arrest and his attorney, Alex L. Davis, III,
signed the affidavit in support of the application for writ of sequestration. Davis signed his affidavit
on information and belief based on evidence and statements provided to him by “the Defendants
in this case.”
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Then, on January 9, 2019, Aludogbu and Restorative Health filed a motion to show cause
in which they accused Renew of failing to comply with the January 4, 2019 temporary restraining
order by failing to allow Aludogbu to remove the blue chiropractic table and the Ondamed
machine. They asked the court to hold a show cause hearing, to find Renew in contempt, and to
place Francis Miro, one of Renew’s members, in custody until he complied with the temporary
restraining order. On January 10, 2019, the trial court issued an order scheduling the show cause
hearing for January 28, 2019.
B. Aludogbu’s deposition
On January 10, 2019, Renew filed an emergency motion for expedited discovery and
extension of the temporary restraining order seeking Aludogbu’s deposition before the injunction
hearing and a new date for that hearing. The court granted the motion for expedited discovery,
extended the temporary restraining order to February 1, 2019, and re-set the injunction hearing for
February 1, 2019.
In his deposition, Aludogbu testified that he did not then have physical possession of,
access to, or control of the Ondamed machine, had not seen the Ondamed machine since the day
he was locked out of Renew, and did not know where the Ondamed machine was located.
Aludogbu also denied that the Ondamed machine was located at AXE Health, a facility where
Aludogbu was offering chiropractic services, and denied any knowledge of the last time he was
physically at the AXE Health facility. When Aludogbu was shown photos and video footage
showing the Ondamed machine at AXE Health, he testified that he borrowed the machine shown
in the video and photos from Dr. Pamela Smith, that machine is owned by Dr. Smith, and he does
not own the machine shown in the video and photos.
The Ondamed machine owned by Aludogbu and located at Renew before the lock out had
Serial No. M18017. A photo of the Ondamed machine located at AXE Health, which Aludogbu
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said was owned by Dr. Smith, showed that the machine located at AXE Health bore the same serial
number as the machine owned by Aludogbu that he claimed Renew had stolen. When shown that
photo and asked how a machine he borrowed from Dr. Smith could have the same serial number
as his machine, Aludogbu said that he did not know and he would be surprised if that machine was
actually his machine.
Aludogbu eventually admitted, however, that he placed his Ondamed machine at AXE
Health, but he did not know how long the machine had been at AXE Health. Aludogbu also
maintained that his prior testimony and affidavit statements were truthful because the machine was
not at Renew when he returned there to collect his things. On cross-examination, he testified that
sometime “after January 5th” the machine was given to him “by somebody with the Plaintiffs” and
that he did not have it in his possession when he told his lawyer it was missing. On further
examination by Renew’s counsel, however, Aludogbu conceded that he did not know when he
took possession of the machine, where he took possession of the machine, or who returned the
machine to him.
Following the deposition, the parties entered an agreed temporary injunction that enjoined
Aludogbu and Restorative Health from the same conduct set out in the temporary restraining order
and set the underlying case for trial on June 11, 2019. The show cause hearing on relators’ motions
and the temporary injunction hearing were also cancelled.
C. Renew’s motion for sanctions
On March 7, 2019, Renew filed a motion for sanctions against Aludogbu and Restorative
Health. In the motion, Renew argued that relators’ application for writ of sequestration, motion for
writ of arrest, and motion to show cause were based on false allegations that Renew stole the
Ondamed machine. Renew maintained that, by filing those motions, relators and their counsel
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signed, filed, and prosecuted false and groundless claims against Renew in violation of Rule 13 of
the rules of civil procedure and section 10.001 of the civil practice and remedies code.
Renew supported its sanctions motion in part with exhibits confirming the serial number
of the Ondamed machine owned by Aludogbu, excerpts from Aludogbu’s deposition, the photos
and video footage showing the Ondamed machine found at AXE Health bore the same serial
number as Aludogbu’s machine, and video footage purportedly showing Aludogbu rolling the
Ondamed machine out of Renew’s office on December 28, 2018. Renew argued those exhibits and
other evidence proved Aludogbu lied about his possession of the machine and knew he was falsely
accusing Renew of theft when he signed his affidavit in support of the motion for writ of arrest on
January 7, 2019 and filed the motions.
Renew requested attorney’s fees of $9,073.12 for legal work performed to discover that
Aludogbu had possessed the machine since December 28, 2018, was lying about the location of
the machine, and was falsely accusing Renew of theft. Renew also asked the trial court to strike
Aludogbu’s pleadings and to render a default judgment against him. The trial court held a hearing
on the sanctions motion on April 15, 2019 and took the matter under advisement. On June 21,
2019, the trial court signed an order awarding sanctions against Aludogbu pursuant to civil
procedure Rule 215.2(b)(8) and Rule 13, ordering relators to pay Renew attorney’s fees of
$9,073.12, and striking relators’ pleadings.
Relators present two issues in their petition. First, they complain the trial court abused its
discretion by striking their pleadings. Second, they complain the trial court abused its discretion
by granting attorney’s fees in the amount granted and without adequate proof of fees.
STANDARD OF REVIEW
To obtain mandamus relief, a relator must show both that the trial court has clearly abused
its discretion and that relator has no adequate remedy by appeal. In re Prudential Ins. Co., 148
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S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). An abuse of discretion occurs when a trial
court’s ruling is arbitrary and unreasonable, made without regard for guiding legal principles or
supporting evidence. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016); Walker
v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding) (a clear abuse of discretion occurs
when a trial court “reaches a decision so arbitrary and unreasonable as to amount to a clear and
prejudicial error of law”). Similarly, a trial court abuses its discretion when it fails to analyze or
apply the law correctly. In re Nationwide Ins., 494 S.W.3d at 712.
“The second requirement—appeal is an inadequate remedy—is fulfilled where a party’s
ability to present a viable claim or defense at trial is either completely vitiated or severely
compromised.” In re Garza, 544 S.W.3d 836, 840 (Tex. 2018). When a court imposes death
penalty sanctions that have the effect of adjudicating the dispute by striking pleadings, dismissing
an action, or rendering a default judgment, but which do not result in the rendition of an appealable
judgment, there is generally no adequate remedy by appeal. TransAmerican Nat. Gas Corp. v.
Powell, 811 S.W.2d 913, 919 (Tex. 1991) (orig. proceeding).
Here, relators lack an adequate remedy by appeal as to the order striking their pleadings
because that order vitiates their affirmative defense of consent to Renew’s claims and prevents
relators from presenting evidence on their counterclaims relating to the alleged oral lease
agreement. The only question before this Court regarding the death penalty sanctions, therefore, is
whether the trial court clearly abused its discretion by ordering those sanctions.
The same is not true for the trial court’s award of attorney’s fees to Renew. “Generally,
orders awarding attorney’s fees, even those imposed as sanctions, are reviewable on appeal and
mandamus will not issue.” Baluch v. O’Donnell, 763 S.W.2d 8, 11 (Tex. App.—Dallas 1988, no
writ) (citing Street v. Second Court of Appeals, 715 S.W.2d 638, 639 (Tex. 1986) (orig.
proceeding)). “Mandamus lies to correct the award of interim fees only in extreme cases in which
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a ‘party’s ability to prosecute the case further is jeopardized’ by the party’s payment of, or inability
to pay, the fees.” In re Chu, 134 S.W.3d 459, 468 (Tex. App.—Waco 2004, orig. proceeding)
(quoting In re Ford Motor Co., 988 S.W.2d 714, 722 (Tex. 1988)); In re Bissell, 109 S.W.3d 87,
89 (Tex. App.—El Paso 2003, orig. proceeding).
Here, the trial court ordered relators to pay Renew $9,073.12 in attorney’s fees. Relators
have not asserted that the payment of this amount would jeopardize their ability to continue the
litigation. In fact, relators make no arguments that they lack an adequate remedy by appeal
regarding the fees award. Accordingly, we deny relators’ petition for writ of mandamus as to the
award of attorney’s fees. See, e.g. In re RH White Oak, LLC, 442 S.W.3d 492, 503 (Tex. App.—
Houston [14th Dist.] 2014, orig. proceeding) (denying mandamus relief because relators have not
explained why the sanctions are so severe as to threaten their ability to continue litigation).
DISCUSSION
Having decided relators’ second issue against them, we turn to the only remaining issue
before us: whether the trial court abused its discretion by striking relators’ pleadings.
A. Applicable Law
Sanctions for abuse of the discovery process are authorized by Rule 215.2. TEX. R. CIV. P.
215.2; Shops at Legacy (Inland) Ltd. P’ship v. Fine Autographs & Memorabilia Retail Stores Inc.,
418 S.W.3d 229, 232 (Tex. App.—Dallas 2013, pet. denied). If a trial court finds a party is abusing
the discovery process in seeking, making, or resisting discovery, then the trial court may, after
notice and hearing, impose any appropriate sanction authorized by rule 215.2(b)(1)-(5) and (8).
TEX. R. CIV. P. 215.3; Shops at Legacy, 418 S.W.3d at 232. Discovery sanctions serve three
purposes: (1) to secure the parties’ compliance with the discovery rules; (2) to deter other litigants
from violating the discovery rules; and (3) to punish parties who violate the discovery rules. Shops
at Legacy, 418 S.W.3d at 232.
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If a party signs a pleading, motion or other paper in violation of Rule 13, the court, after
notice and hearing, “shall impose an appropriate sanction under Rule 215, upon the person who
signed it, a represented party, or both.” TEX. R. CIV. P. 13. Among the sanctions available under
rule 215.2 are orders “striking out pleadings or parts thereof,” “dismissing with or without
prejudice the actions or proceedings or any part thereof,” and “rendering a judgment by default
against the disobedient party.” TEX. R. CIV. P. 215.2(b)(5). These sanctions, which adjudicate a
claim and preclude presentation of the merits of the case, are often referred to as “death penalty”
sanctions. Shops at Legacy, 418 S.W.3d at 232; Perez v. Murff, 972 S.W.2d 78, 81 (Tex. App.—
Texarkana 1998, pet. denied) (any sanctions which are “case determinative” constitute “death
penalty” sanctions).
Although the choice of sanction is left to the sound discretion of the trial judge, the
sanctions imposed must be just. TransAmerican, 811 S.W.2d at 916; Shops at Legacy, 418 S.W.3d
at 232; TEX. R. CIV. P. 215.2. When determining whether a trial court’s imposition of sanctions
was just, an appellate court considers the following two standards: (1) whether there is a “direct
relationship” between the abusive conduct and the sanction imposed; and (2) whether the sanction
is excessive. TransAmerican, 811 S.W.2d at 917; Shops at Legacy, 418 S.W.3d at 232.
“A sanction imposed for discovery abuse should be no more severe than necessary to
satisfy its legitimate purposes. It follows that a court must consider the availability of less stringent
sanctions and whether such lesser sanctions would fully promote compliance.” Shops at Legacy,
418 S.W.3d at 232–33 (quoting TransAmerican, 811 S.W.2d at 918). Under this standard, the trial
court need not test the effectiveness of each available lesser sanction by actually imposing the
lesser sanction before issuing the death penalty. Id. at 233. Rather, the trial court must analyze the
available sanctions and offer a reasoned explanation as to the appropriateness of the sanction
imposed. Id.
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Death penalty sanctions are harsh and may be imposed as an initial sanction only in the
most egregious and exceptional cases “when they are clearly justified and it is fully apparent that
no lesser sanctions would promote compliance with the rules.” GTE Commc’ns Sys. Corp. v.
Tanner, 856 S.W.2d 725, 729 (Tex. 1993). “The imposition of very severe sanctions is limited,
not only by these standards, but by constitutional due process.” TransAmerican, 811 S.W.2d at
917–18. Discovery sanctions cannot be used to adjudicate the merits of a party’s claims or defenses
unless a party’s hindrance of the discovery process justifies a presumption that its claims or
defenses lack merit. Id.
Further, the record must include some explanation to justify the granting of death penalty
sanctions. Shops at Legacy, 418 S.W.3d at 233. “A conclusory statement that no lesser sanction
would be effective is not sufficient to constitute the required analysis of available sanctions and
the reasoned explanation of the sanction’s appropriateness.” In re Estate of Perez-Muzza, 446
S.W.3d 415, 425–26 (Tex. App.—San Antonio 2014, pet. denied) (citing GTE Commc’ns Sys.
Corp., 856 S.W.2d at 729 and Shops at Legacy, 418 S.W.3d at 234).
B. Application of Law to Facts
Here, the sanctions order states that the court “has considered lesser sanctions, and now is
of the opinion that the amount ordered above adheres to guiding principles of law authorized by
Rule 215.2(b)(l)-(5) and (8) and is limited to costs associated with Plaintiff’s preparation to address
Defendants’ allegations of theft in the anticipated Temporary Injunction and Show Cause Hearing
and Defendants’ pleadings being stricken from the record.” Other than this single sentence,
however, there is no indication in the record that the trial court considered a less stringent sanction.
The trial judge did not discuss alternatives to the proposed sanctions during the hearing on the
motion for sanctions. The trial judge simply asked Renew’s counsel what sanctions he was seeking
from the court and, when told Renew wanted the pleadings stricken, the judge asked “is that the
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least punitive level of sanctions.” Renew’s counsel responded that he would “leave that to the
Court” but noted that his client wanted to recover, at a minimum, the amount of fees incurred to
uncover Aludogbu’s lies concerning the Ondamed machine. The trial judge took the matter under
advisement at the end of the hearing and asked counsel to provide the court with case law guidance
to decide if death penalty sanctions were warranted here. The trial court did not state that it had
concluded that lesser sanctions would not be effective and, as such, did not explain its reasons for
concluding that lesser sanctions would not be effective. The conclusory statement in the order that
the court “has considered lesser sanctions” is not sufficient to constitute the required analysis of
available sanctions and the reasoned explanation of the sanction’s appropriateness. GTE
Commc’ns Sys. Corp., 856 S.W.2d at 729; Shops at Legacy, 418 S.W.3d at 234; In re Estate of
Perez-Muzza, 446 S.W.3d at 425–26. Accordingly, the trial court abused its discretion by striking
relators’ pleadings as a sanction.
Moreover, striking relators’ pleadings was an excessive and unjust sanction in this case.
As explained in TransAmerican, discovery sanctions can be used to adjudicate the merits of a
party’s claims when a party’s hindrance of the discovery process justifies a presumption that its
claims lack merit. TransAmerican, 811 S.W.2d at 918. A presumption that a party’s claim lacks
merit is not justified “when the party makes a false statement about matters unrelated to the core
elements of [the cause of action].” 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, when lies did not directly relate to the underlying claim for personal
injuries).
Here, Renew sought sanctions against relators because Aludogbu falsely accused Renew
of theft in three motions filed before the temporary injunction hearing and repeatedly lied about
whether he had possession of the machine he accused Renew of taking. The lies Aludogbu told
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about his possession of the Ondamed machine and the false allegation that Renew stole the
machine, however, are unrelated to the causes of action asserted in the main litigation. Renew sued
relators for breach of contract, fraud, money had and received, and civil theft to recover damages
caused by Aludogbu’s alleged breach of the oral agreement. Aludogbu and Restorative Healthcare
brought counterclaims for breach of contract, quantum meruit, and promissory estoppel seeking
damages related to Renew’s alleged breach of the purported lease agreement and alleged promise
to make Aludogbu a business partner. The location and possession of the Ondamed machine when
the relationship ended is irrelevant to those causes of action and the damages alleged by the parties.
Although Aludogbu’s conduct likely did not bolster his credibility in the eyes of the trial judge,
that conduct does not justify a presumption that relators’ claims lack merit because Aludogbu’s
false statements concerned matters unrelated to the core elements of the causes of action asserted
in the case, and there is not a direct relationship between the offensive conduct and the sanction
imposed. The trial court abused its discretion by striking relators’ pleadings.
CONCLUSION
We conclude the trial court abused its discretion by ordering death penalty sanctions
against relators, and relators lack an adequate remedy by appeal as to those sanctions. However,
relators have an adequate remedy by appeal regarding the award of fees against them. Accordingly,
we conditionally grant the petition for writ of mandamus as to the portion of the sanctions order
striking relators’ pleadings and deny the petition as to the award of attorney’s fees. We direct the
trial court to issue a written ruling within thirty days of the date of this opinion vacating the portion
of the sanctions order striking relators’ pleadings.
/Robbie Partida-Kipness/
ROBBIE PARTIDA-KIPNESS
JUSTICE
191159F.P05
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