Altesse Healthcare Solutions, Inc. v. Wilson

• Decision Date: 23 August 2016
• Docket Number: No. 05-15-00906-CV,05-15-00906-CV
• Citation: 544 S.W.3d 1
• Parties: ALTESSE HEALTHCARE SOLUTIONS, INC. and Shawna Boudreaux, Appellants v. Allen WILSON and Becky Wilson, Appellees
• Court: Texas Court of Appeals

544 S.W.3d 1

ALTESSE HEALTHCARE SOLUTIONS, INC. and Shawna Boudreaux, Appellants

v.Allen WILSON and Becky Wilson, Appellees

No. 05-15-00906-CV

Court of Appeals of Texas, Dallas.

Opinion Filed August 23, 2016.

Rehearing Overruled September 30, 2016

Christopher Hillis, Dan E. Martens, Dallas, TX, for appellants.

Hastings Lyle Hanshaw, David Wortham Jr., Collin Dean Kennedy, Frisco, TX, for appellees.

Before Justices Lang -Miers, Evans, and Brown

MEMORANDUM OPINION

Opinion by Justice Evans

Altesse Healthcare Solutions, Inc. and Shawna Boudreaux¹ (collectively Altesse unless context requires otherwise) appeal from the trial court's adverse final judgment awarding Allen Wilson and Becky Wilson $897,937.51 plus attorney's fees. In its first issue, Altesse challenges the trial court's imposition of "death penalty" sanctions for violating a temporary restraining order as unjust and a violation of his due process rights. In issues two through six, Altesse challenges the trial court's underlying temporary restraining order arguing that (1) the order did not maintain the status quo, (2) the Wilsons failed to prove probable injury, (3) the Wilsons failed to satisfy a condition precedent to filing suit, (4) the Wilson's suit should have been brought in federal court as a compulsory counterclaim to the suit filed by Altesse, and (5) the trial court erred in having the TRO hearing off the record. In two additional issues, Altesse contends that it substantially complied with the TRO and any noncompliance was not willfully done. The Wilsons have not filed a brief in this appeal. For the reasons that follow, we affirm the trial court's judgment.

BACKGROUND

This case arises from a dispute involving the purchase and sale of ABACAW Enterprises, Inc. doing business as Golden Pond Home Healthcare. At all relevant times, Golden Pond provided home healthcare services to mainly Medicare patients. Pursuant to a June 21, 2014 agreement, Altesse agreed to purchase the company from the Wilsons for the sum of $800,000 to be paid in installments beginning October 15, 2014. After the agreement was signed, Altesse began operating the company. Altesse failed to pay the first $66,000 installment due on October 15, 2014 and, instead, filed suit in federal court against the Wilsons.² The Wilsons filed a petition in state court asserting claims for breach of contract, fraud, and declaratory judgment with an application for a temporary restraining order and injunctive relief.

On December 17, 2014, attorneys for both parties appeared in the trial court's chambers to discuss the TRO application. The trial court signed the TRO and scheduled a hearing for the temporary injunction five days later, on December 22, 2014. Among other things, the TRO required Altesse to return to the Wilsons within three days: the company assets, access to the business and all records, administrator access and password information and business documents reflecting the company's current patients, employees and patient schedules. No evidentiary hearing was held or record made of the December 17 proceedings on the TRO, although both parties' attorneys were present when it was signed. On December 19, Altesse filed an emergency motion to set aside the TRO but the motion was never set for a hearing. One hour later, Altesse filed a notice of removal to federal court where they sought to consolidate it with its previously-filed federal lawsuit. Consequently, a hearing was never held on the application for a temporary injunction. On January 30, 2015, the federal court ultimately granted the Wilsons' request to return the case to state court.

On March 19, 2015, the Wilsons filed a motion for contempt and sanctions against Altesse alleging it violated various provisions of the trial court's TRO. After an evidentiary hearing, the trial court granted the motion and punished Altesse for contempt of court by "impos[ing] a sanction of $897,937.51’’ and further ordered that "death penalty sanctions should be imposed against [Altesse] as to [its] liability for all of the Wilsons' causes of action and claims plead in their Original Petition, and persevere [sic] the amount of damages for trial." The Wilsons then requested and received a final judgment against Altesse for $897,937.51, attorney's fees for post-judgment discovery and obtaining and enforcing the judgment, plus contingent appellate attorney's fees. Altesse filed this appeal.

ANALYSIS

A. Death Penalty Sanctions

In its first issue, Altesse challenges the trial court's grant of death penalty sanctions. Altesse contends the trial court's imposition of death penalty sanctions violated its state and federal constitutional due process rights and was not "just" as required by the standard set forth by the Texas supreme court in TransAmerican Natural Gas Corporation v. Powell , 811 S.W.2d 913 (Tex. 1991) (orig. proceeding) and its progeny. Altesse generally contends that the Wilsons failed to prove a direct relationship between the sanction imposed and the offensive conduct. It also asserts that the sanction was more severe than necessary because Altesse ultimately turned over the company assets to the Wilsons. Finally, it contends its claims and defenses did not lack merit.

We review a trial judge's sanction award for an abuse of discretion, examining the entire record to determine whether the trial court acted arbitrarily and unreasonably, without reference to guiding principles, or misapplied the law to the established facts of the case. See Randolph v. Walker, 29 S.W.3d 271, 276 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).

"Two factors mark the bounds of the trial court's discretion in order for sanctions to be just: first, a direct relationship between the offensive conduct and the sanction imposed must exist; and second, the sanction imposed must not be excessive." Chrysler Corp. v. Blackmon , 841 S.W.2d 844, 849 (Tex. 1992) (orig. proceeding). Additionally, there are constitutional due process limitations preventing the imposition of death penalty sanctions unless the offensive conduct justifies a presumption that the offending party's claims or defenses lack merit. See TransAmerican , 811 S.W.2d at 917–18.

In its April 13 order granting contempt and sanctions, the trial court made the following findings:

The Court finds that [Altesse] violated the Court's temporary restraining order issued on December 17, 2014 by:

* * *

(2) Transferring and depleting monies of ABACAW. Specifically, transferring $15,150 (in five different transfers) from ABACAW's bank account to another, unknown Compass Bank account (Account *2407), and writing and negotiating 21 checks totaling $17,787.51;

(3) Failing to comply with any of the mandatory injunction part of the order. Specifically, failing to provide within three days, the required assets, business records and documents, password information, and all other course of business documents of ABACAW;

(4) Failing to return information vital to the operation of ABACAW and to comply with Medicare regulations. Specifically, failing to provide 376 incomplete visit notes; 64 orders that show as being sent to the physician but that were never marked returned with a signature, scanned into the computer, or returned by hard copy; and 137 orders that are marked returned with physician's signature but are not scanned into AXXESS nor have they been returned to Allen Wilson and/or Becky Wilson by hard copy; and

(5) Failing to return the following assets of ABACAW: four Dell computers; nine computer monitors; laminating machine; ice box; two coffee pots; two microwaves; 4 n-ratio (PT/INR machine); Alere PT/INR machine bag; and 3 testing strips.

With respect to the imposition of death penalty sanctions, the trial court found:

The court finds that death penalty sanctions in this case are necessary and just because:

(1) The sanction is directly related to the Defendants' offensive conduct because the Defendants devastated the value of ABACAW (the order was meant to retain this value so that the parties would have something left to fight over), and ruined the Wilsons' only chance to recover ABACAW's business at the time the order was granted (by violating the order and avoiding the temporary injunction hearing in bad faith).

(2) The sanction is completely necessary to promote full compliance with the orders and authority of this Court. Not providing this sanction would allow the Defendants to benefit from their actions, and have no repercussions that would cause them, or other similar parties like them in the future, to obey the authority of this Court.

(3) No other lesser sanction would be adequate punishment for the violations committed by the Defendants. The complete destruction of the business cannot be properly punished by the awarding of only attorneys' fees or other similar, lesser sanctions.

(4) Defendants' egregious conduct justifies the presumption that its claims or defenses lack merit.

At the contempt and sanctions hearing, there was testimony from Allen Wilson that when the TRO was entered, the company had 55 patients. However, the day the business was finally returned to the Wilsons, the company had only three active patients. Wilson testified that he received transfer statements from 20 patients that were going to Trinicare Home Health, Inc., a home health company controlled by Boudreaux and doing business under the assumed name of Altesse Home Health.³ Moreover, after the TRO was entered, Altesse was still filing claims requesting payment from Medicare. According to Wilson, he did not get access to the software allowing him to see patient schedules until after January 1, 2015. Wilson further testified that they still had not received several assets of the business including some computers and furniture. In addition, he stated money that was owed to the IRS and should have been paid by Altesse had not been paid. According to Wilson, there was a $50,000 letter of credit that "has never shown up in the bank account" and only...