Chavira v. Quarry Hills Mgmt., LLC

• Decision Date: 01 December 2014
• Docket Number: No. 08–12–00169–CV.,08–12–00169–CV.
• Citation: 458 S.W.3d 561
• Parties: German CHAVIRA and Alejandro Fabela, Both Individually and Both d/b/a El Paso Pavement Specialist and El Paso Pavement Specialist, LLC, Appellants, v. QUARRY HILLS MANAGEMENT, LLC, Appellee.
• Court: Texas Court of Appeals

458 S.W.3d 561

German CHAVIRA and Alejandro Fabela, Both Individually and Both d/b/a El Paso Pavement Specialist and El Paso Pavement Specialist, LLC, Appellants

v.QUARRY HILLS MANAGEMENT, LLC, Appellee.

No. 08–12–00169–CV.

Court of Appeals of Texas, El Paso.

Dec. 1, 2014.

Tony R. Conde, Jr., El Paso, TX, for Appellant.

John P. Mobbs, Attorney at Law, El Paso, TX, for Appellee.

Before McCLURE, C.J., RIVERA, and RODRIGUEZ, JJ.

OPINION

ANN CRAWFORD McCLURE, Chief Justice.

In this appeal we are asked to review a trial court's final judgment and two contempt orders which were entered following two show cause hearings. The contempt proceedings resulted from the Appellants' alleged refusal to comply with an agreed temporary injunction. For the reasons that follow, we lack jurisdiction to review the contempt rulings and the judgment which is based on the contempt findings on direct appeal.

FACTUAL SUMMARY

Quarry Hills Management, LLC (Quarry Hills) filed suit against German Chavira and Alejandro Fabela, individually and doing business as El Paso Pavement Specialist and El Paso Pavement Specialist, LLC (collectively referred to as EPPS) on February 1, 2011. The suit alleged that Quarry Hills had retained EPPS as a subcontractor on three federal construction projects. The suit raised a number of claims, including business disparagement, breach of contract, tortious interference with contractual relationships, fraud, and conversion.

In particular, Quarry Hills complained that EPPS had not turned over “certified payroll” forms for several projects. On federal construction projects, certified payroll forms are one of the items that a contractor must submit to the owner to obtain final payment due under the job. 40 U.S.C. § 3145(a) (2014). The original petition sought a temporary restraining order and temporary injunction requiring EPPS to turn over certified payroll forms for three projects identified as “IBCT2– POV (Contract # W912HY–09–D–0004), BCT–3–CAB–POV (Contract No W912HY–09–000–0003) and/or BCT–3–POV (Contract No W912HY–09–D–0009,0002).” Upon the filing of the suit the trial court issued a temporary restraining order, conditioned on the posting of a $500 bond, which required that the certified payroll forms for the three specified contracts be turned over to Quarry Hills immediately. The temporary restraining order was extended by a second ex parte order of the trial court which recited that the bond had been posted. The trial court extended the restraining order three additional times by agreed orders approved by Quarry Hills and counsel for at least one of the Appellants.¹ The agreed extensions continued the temporary restraining order in force through a temporary injunction hearing set for June 6, 2011. Quarry Hills and EPPS mediated their disputes and reached a partial settlement which included an agreement by EPPS to prepare and file by May 20, 2011 certain certified payroll records, identified in a letter which is not of record. The mediation agreement contemplated that the parties would continue the June 7, 2011 temporary injunction hearing. That hearing was reset to August 30, 2011 and the parties mutually agreed to extend the temporary restraining order until the date of that hearing. EPPS's initial counsel of record withdrew on August 5, 2011 and new counsel appeared on August 26, 2011.

At the temporary injunction hearing on August 30, the parties through counsel announced an agreement on the issuance of a temporary injunction. The agreement which was reduced to a written order recited that Quarry Hills would suffer irreparable injury unless the relief sought was granted and that the bond had already been posted. The agreed temporary injunction required that certified payroll records from two contracts be delivered by September 19, 2011.² At the August 30 hearing, the trial judge instructed EPPS' counsel to inform Appellant German Chavira that it is “very, very important—and I'm going to hold his feet to the fire—that he produce those records on September 19th.” EPPS counsel agreed to do so.

Quarry Hills filed a first “Plaintiff's Motion for Contempt and for Sanctions” on September 23, 2011. The motion contended that the payroll records had not been produced by the September 19 deadline in the temporary injunction. The motion was supported by the affidavit of David Venegas who swore that the United States Army Corp of Engineers was still demanding the certified payroll records; that failure to provide the forms was preventing the project from being closed out; and the situation was jeopardizing Quarry Hills' ability to contract for future federal projects. A show cause hearing was set for October 3, 2011.

German Chavira appeared at the October 3 hearing and testified as a partner of El Paso Pavement Specialist, LLC. It would have been evident to the trial court that there was some confusion amongst the parties as to the correct descriptive terms used to identify the different projects at issue. The agreed temporary injunction required EPPS to produce certified time records for project “BCT–3–CAB–POV (Contract No W91211Y–09–000–003) and/or BCT–3–POV (Contract No W91211Y–09–D–0009,0002).” German Chavira testified to performing work on project “BCT–POV.” He brought some records to the hearing, prepared by a third party identified as “TNT,” which combined projects “BCT–3–POV and “CAB.” Quarry Hills' counsel contended that it really needed the certified payroll records for projects “BCT–POV” and “BCT–CAB–POV” and contended there was a third project called “BCT–3” which was done for another entity but for which payroll data had been intermingled.

Partly to resolve any confusion over the project descriptors, the trial court ordered the parties to meet the next day at a time and place certain. A third party auditor who had come to the hearing with Venegas was ordered to attend as well. German Chavira was ordered to bring all of his back up paperwork on the jobs, including time cards and all notes reflecting who was working on the two projects that he did for Quarry Hill. Chavira indicated that his secretary had provided the original time sheets to TNT for it to prepare what reports it did. The show cause hearing was reset for two days later on October 5.

When the parties reconvened the show cause hearing on October 5, EPPS' counsel informed the trial court that the meeting the day before had lasted about ten minutes. EPPS' counsel determined that the meeting would be fruitless without TNT's participation. None of the back-up records, such as time cards, were brought to the meeting. Instead, EPPS' counsel indicated that he had just recently made contact with TNT and was intending to have it assist in preparing the certified payroll records. The trial court recessed the hearing to permit EPPS' counsel to confer with TNT to insure it would indeed meet with EPPS to prepare the certified payroll records. After the recess, EPPS' counsel represented to the trial court that TNT would work with German Chavira to prepare the certified payroll records, and that Chavira would assist in that effort.

The trial court then ordered that EPPS pay $1,350 in attorney's fees and $150 in costs as sanctions. EPPS was to produce the certified payroll records on or before October 15, 2011 and failing that, EPPS would be fined $300 per day until the records were delivered. The trial court warned Chavira, who was in the court room, that he needed to cooperate and that he risked arrest and confinement. The trial court specifically informed him:

The Court: That's a very drastic measure, but if that's what I have to do, Mr. Chavira, I'm going to do it. So, you'd better cooperate. I looked over there a little while ago and you were smiling and laughing. This is not a smiling and laughing matter. You've pushed me to the limit. Do you understand that, Mr. Chavira?

The Defendant: Yes, sir.

On January 6, 2012, Quarry Hills filed a motion to compel discovery responses. On January 17, 2012, it filed Plaintiff's Second Motion for Contempt and Sanctions. The trial court signed an order setting a show cause hearing on January 30, 2012. The order cites each of the Appellants for failure to produce the “Certified Payroll on the CAB–POV and the BCT–3–POV projects” and failure to pay the monetary sanctions ordered on October 5, 2011. The record does not show service of the show cause order personally on any of the Appellants. Their counsel, however, did file a response to the motion and appeared at the hearing on January 30, 2012.

EPPS' response to the contempt motion raised several procedural challenges to the show cause hearing, including lack of personal service of the show cause order on any of the Appellants. The response also asserted that EPPS should not be required to produce any of the certified payroll records until EPPS was paid sums allegedly due it. Along with the response, EPPS served a notice of deposition for a corporate representative for Quarry Hills, requiring production of twenty-two categories of documents. The deposition was set three days from the date of filing the notice itself.

Both the show cause hearing and a motion to compel were set for January 30, 2012. At the hearing, EPPS' counsel restated its position that once the certified payroll records were produced, the project would be “closed out” and EPPS would lose its ability to seek what it claimed it was owed. EPPS then orally moved to increase the bond to $250,000 which was the amount of its claim. Effectively, EPPS was arguing first that it could create the certified payroll records, but that it did not want to until it was paid or the bond was increased. It also argued that it could not create the certified payroll records without assistance.

The trial court noting, that it had “bent over backwards” more than in any other case, granted the motion for contempt and sanctions. It signed two orders on January 30, 2012. The first, labeled as an “Order,” compelled EPPS to pay $33,600 to Quarry...