First State Bank, Bishop v. Chappell & Handy, P.C.

• Decision Date: 26 March 1987
• Docket Number: No. 13-86-343-CV,13-86-343-CV
• Citation: 729 S.W.2d 917
• Parties: FIRST STATE BANK, BISHOP, Texas, 1 Appellant, v. CHAPPELL & HANDY, P.C., Appellee,
• Court: Texas Court of Appeals

Page 917

729 S.W.2d 917

FIRST STATE BANK, BISHOP, Texas, ¹ Appellant, v. CHAPPELL & HANDY, P.C., Appellee,

No. 13-86-343-CV.

Court of Appeals of Texas Corpus Christi.

March 26, 1987.

Rehearing Denied May 14, 1987.

Wayne Scott, San Antonio, Jim Vollers, Austin, for appellant.

David L. Smith, Corpus Christi, for appellee.

Before NYE, C.J., and KENNEDY and DORSEY, JJ.

OPINION

NYE, Justice.

This is a discovery sanctions case. Appellee sued appellant on a sworn account to recover attorney's fees earned pursuant to a legal services contract. Appellant filed a sworn denial, urged lack of performance as a defense, and countersued for legal malpractice. The primary dispute in this case centered on appellee's difficulty in deposing appellant's president, Mr. William Wallace. This difficulty culminated in the trial court striking appellant's defensive pleadings and countersuit, leaving it with only a sworn denial of the sworn account. The case was submitted to a jury, which found in favor of appellee. Appellant contests the trial court's sanctions and brings five points of error. We affirm.

Appellant Bank hired David Chappell, an attorney, to represent it in several law suits stemming from an embezzlement of bank funds by some of its former officers, and from the refusal of its bonding company to pay the claims resulting from the embezzlement. It is undisputed that Mr. Wallace, an attorney, was appellant's legal counsel and chairman of the board. Mr. Wallace was the only person within appellant's organization familiar with Chappell's representation of the bank in the bonding company litigation, from which the attorney's fees arose.

Although the record in this case contains a statement of facts, throughout the pretrial proceedings, counsel for both sides merely discussed matters, on the record, with the trial court, but did not offer sworn testimony. The content of these discussions is not evidentiary. However, at one particular hearing appellee's counsel did offer some documentary evidence, including a summary of events detailing the facts surrounding the discovery proceedings. This summary provides this Court with something more than the pleadings upon which to review this case.

Appellee filed suit in Nueces County for collection of the sworn account in October, 1984. Appellant filed a sworn denial and a countersuit in March, 1985. Trial was eventually set for February 18, 1986. Appellee maintains that it needed to depose Wallace to discover the facts surrounding appellant's defenses and countersuit. Appellee also maintains that it was necessary to depose Wallace before it deposed two other witnesses, Grant and Keith.

On July 19, 1985, appellee filed notices to depose Wallace, Grant, and Keith; with Wallace's deposition set for September 9 in Corpus Christi, Grant's deposition set for September 11 in Austin, and Keith's deposition set for September 13 in Beaumont. Wallace resided in Corpus Christi. On August 30, 1985, appellant filed a motion to quash the scheduled depositions and requested that they be set at a later date. Appellant alleged that it was necessary for Wallace to attend all the depositions as appellant's representative because he alone could "properly assist" in the taking of the depositions, but due to his medical problems he was unable to attend the scheduled depositions. Attached to this motion was a letter and affidavit from Wallace's physician detailing his poor health. ² The letter was dated July 31, 1985, and it stated that after sixty days Wallace was expected "to be able to rapidly resume his duties on a full-time basis." On September 5, the trial court entered an agreed order commanding Wallace to appear for depositions on October 21 in Corpus Christi. The out-of-town depositions were reset for October 23 and 25.

Appellee's summary of events reflects that in mid-October 1985, appellant's attorney, Mr. Carnahan, called appellee's counsel several times and discussed rescheduling Wallace's deposition for October 28 because Carnahan had another trial set for October 21. Appellee's counsel was agreeable subject to confirmation. Carnahan called again and stated that Wallace had told him that he (Wallace) would not appear on October 21 or 28 because those dates were not convenient to him. Neither Wallace nor appellant's attorney appeared on October 21.

Appellee filed a motion for sanctions for failure to appear for the deposition and requested, among other things, that appellant's pleadings be struck. A hearing was held on the motion, and, on November 21, the trial court entered an order that Wallace appear for depositions on November 26, in Corpus Christi, and that appellant pay appellee $1,504.90 for attorney's fees and costs. The order also provided that if Wallace failed to appear for deposition, then upon appellee's motion, the court would strike appellant's pleadings.

The summary of events reflects that Wallace appeared for the November 26 deposition, but refused to answer any questions regarding appellant's defenses to the sworn account or countersuit until after December 10. Apparently, Wallace contended that to answer any questions before that date might prejudice appellant's position in the bonding company litigation. Wallace agreed to fully and promptly answer written questions concerning these matters if they were submitted after December 10. Written deposition questions were submitted on December 18.

On January 13, 1986, appellee filed a motion to compel answers and for sanctions for failure to answer questions. A hearing on the motion was set for January 20, and the out-of-town depositions were again rescheduled for February 3 and 10. A few days before the hearing appellant filed written answers to the deposition questions. Appellee characterized these answers as brief, incomplete, and totally inadequate to allow preparation of a defense.

At the second hearing, appellee's counsel reiterated his need to take Wallace's deposition before those of the out-of-town witnesses. He suggested that since Wallace wanted to attend the out-of-town depositions anyway, Wallace should allow his deposition to be taken in Austin immediately before Grant's deposition. When asked if he had any objections to that suggestion, appellant's counsel stated, "I don't know if Mr. Wallace is available because this morning is the first time I heard about his deposition in Austin." Appellant's counsel made no objection based upon Wallace's health and inability to travel. He said nothing further about Wallace being ordered to depose in Austin. The trial court stated, "[W]ell, he's going to be up there. He ought to stand up for his deposition...." Appellant's attorney stated that he understood that appellee was "withdrawing his request for sanctions," in lieu of Wallace being ordered to complete his oral deposition.

The trial court entered an order stating that Wallace's written answers were insufficient and that his deposition and other discovery "should continue and therefore ... [t]he deposition ... is rescheduled for ... February 4 ... The witness is Ordered to appear [in Austin]." The order also extended appellee's discovery deadline to the date of trial (February 18), and denied all other relief sought.

On January 31, appellant filed an amended motion for continuance of discovery and trial, along with two affidavits. The affidavit of Wallace's physician stated that Wallace's injury was more severe than originally thought and that he would be unable to travel for the foreseeable future. The affidavit of appellant's attorney stated that he believed Wallace would not be physically able to participate in any of the presently scheduled depositions or the trial. He stated that Wallace was appellant's "primary counsel" and his testimony was material to the defense and counterclaim, and could not be secured from any other source. Although the record is silent, appellant's motion was apparently denied. Wallace did not appear for the February 4 deposition.

On February 5, appellee filed its third motion for sanctions requesting that appellant's defensive pleadings and countersuit be stricken, that it recover attorney's fees and cost for discovery, and that judgment be entered on the sworn account. Appellant filed a response alleging that Wallace was unable to comply with the court's order because of his health and physical limitations. Attached to the answer was an affidavit by Wallace detailing his poor physical condition.

At the hearing held on this third motion for sanctions, appellee introduced a certificate of nonappearance evidencing Wallace's failure to appear for his February 4 deposition. Appellee also introduced the summary of events regarding its various discovery attempts. As it had warned on previous occasions, the trial court struck appellant's counterclaim and defensive pleadings, except for it's sworn general denial, for violations of the discovery process and the trial court's orders.

Appellant now urges that the trial court erred in ordering Wallace to be deposed in Austin and in imposing sanctions because of appellant's failure to comply with that order. Appellant argues the trial court ordered Wallace to depose in Austin as a sanction for his refusal to complete his Corpus Christi deposition.

A trial court may impose sanctions on any party that abuses the discovery process. Tex.R.Civ.P. 215. Discovery sanctions imposed by a trial court are within that court's sound discretion and will only be reversed if that court clearly abused its discretion. Bodnow Corp. v. City of Hondo, 721 S.W.2d 839, 840 (1986). The test for determining an abuse of discretion is whether the trial court acted without reference to any guiding rules or principles, i.e., whether the trial court acted arbitrarily or unreasonably in imposing the sanctions. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985); Medical Protective Co. v. Glanz, 721 S.W.2d 382, 386 (Tex.App.--Corpus Christi ...