Vaughn v. Texas Employment Com'n

• Decision Date: 26 April 1990
• Docket Number: No. 01-89-00836-CV,01-89-00836-CV
• Citation: 792 S.W.2d 139
• Parties: Zelda E. VAUGHN, Appellant, v. TEXAS EMPLOYMENT COMMISSION, Gulf Publishing Company, Kathy Coffman, and Clayton Umbach, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 139

792 S.W.2d 139

Zelda E. VAUGHN, Appellant, v. TEXAS EMPLOYMENT COMMISSION, Gulf Publishing Company, Kathy

Coffman, and Clayton Umbach, Appellees.

No. 01-89-00836-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

April 26, 1990.

Rehearing Overruled June 7, 1990.

Ben Levy, Houston, for appellant.

L. Boyd Smith, J. Alfred Southerland, Vinson & Elkins, Houston, for appellees.

Before EVANS, C.J., and MIRABAL and DUGGAN, JJ.

DUGGAN, Justice.

This is an appeal from an order dismissing appellant's causes of action against appellees with prejudice and awarding attorney's fees to the defendants as sanctions for discovery abuse.

The plaintiff-appellant does not challenge the trial court's findings that she committed perjury and fabricated evidence in her deposition and discovery responses, and that she committed perjury during the hearing on appellees' motion for sanctions. Without disputing the trial court's finding of her misconduct, appellant complains that under the worst-case scenario, the "harsh and punitive" remedies imposed were excessive and constituted an abuse of the court's discretion. She particularly complains of the trial court's action on its own motion, after hearing the testimony at the sanctions hearing, in reconsolidating and dismissing her previously severed cause of action against one of the appellees; she asserts this appellee was not affected by any perjury and fabrication of evidence.

Appellant, Zelda E. Vaughn, was employed by appellee, Gulf Publishing Company, under the supervision of appellees, Kathy Coffman and Clayton Umbach, until November 1985. She thereafter applied for unemployment benefits, which appellee, Texas Employment Commission ("TEC"), denied. In September 1986, Vaughn filed suit against Gulf Publishing, Coffman, Umbach, and TEC, alleging wrongful termination, defamation, and wrongful denial of unemployment benefits. Because her claim against TEC for wrongful denial of unemployment benefits involved a different standard of proof from that governing her claims against Gulf Publishing, Coffman, and Umbach, the trial court granted appellees' motion to sever these claims less than a month before the trial setting.

Vaughn's case against Gulf Publishing, Coffman, and Umbach had proceeded through pretrial discovery on theories of wrongful termination and defamation. In October 1987, appellees sent discovery requests to Vaughn, specifically requesting information supporting her cause of action for defamation. As part of her sworn response, Vaughn produced a list of more than 160 business entities to which she purportedly had applied for and been denied employment. She also produced several handwritten documents she claimed were transcriptions of telephone conversations between prospective employers and Coffman, her former supervisor at Gulf Publishing.

During Vaughn's deposition, taken June 10, 1988, she swore that she prepared the transcripts from tape-recorded conversations between prospective employers and Coffman. She further swore that she was not present when the conversations took place and that she had merely asked each of these prospective employers to call Coffman to obtain a reference, and to record their conversations in order to help Vaughn determine why she was having difficulty getting a job. She testified that each transcript contained false statements made by Coffman which (1) prevented her employment by the persons making the recordings, and (2) were illustrative of the slanderous comments Coffman made to the other 160 or so prospective employers who had denied her employment.

One of the transcripts referenced in Vaughn's deposition reflects a conversation between a Jean Cox and Coffman on August 27, 1987. The transcript indicates that Cox worked at an insurance agency where Vaughn applied for employment, and that Cox called Coffman to check references on Vaughn. During Vaughn's deposition, she swore that Cox was a supervisor at the insurance agency; that Cox had authority to make recommendations concerning employment of job applicants; that she explained to Cox she was having trouble getting a job, and asked Cox to record her conversation with Coffman; that Cox agreed to make the recording and in fact did so; and that she, Vaughn, was not present when the recording was made.

In July 1988, Vaughn spent two days at the court reporter's office reviewing her deposition and made over 35 corrections to the transcript, including grammatical changes and narrative explanations of her testimony. However, none of Vaughn's corrections attempted to clarify, delete, or alter any of the references to the purported August 27, 1987, telephone conversation between Coffman and Cox.

On May 11, 1989, appellees' attorneys learned of the fabricated evidence and confronted Vaughn's attorney with this information. On May 12, 1989, Vaughn filed an amended petition which de-emphasized her defamation claim. On May 15, 1989, appellees moved to dismiss the case pursuant to Texas Rules of Civil Procedure 13, 215(2)(b), and 215(3). ¹ A hearing was set for May 17, 1989, and reset until May 22, 1989, the day the case was called for trial. On May 17, 1989, the original motion hearing date, Vaughn filed a written response entitled "Plaintiff's Retractions and Corrections of Deposition Testimony." By this pleading, she attempted to retract her statements regarding the telephone conversation between "Cox" and Coffman by altering or deleting 27 portions of her deposition dealing with the transcript.

During the hearing on May 22, 1989, appellees called Vaughn as a witness. She testified that part of the basis of her claim against appellees was that she could not get a job because of bad things Coffman had said about her. When she was confronted with the transcript of the purported telephone conversation between Cox and Coffman, Vaughn conceded that (1) she had never approached Cox to ask her to call Coffman, and (2) the transcript actually reflected a conversation between Coffman and Vaughn personally. She admitted that her initial production of the transcript was made in response to appellees' specific interrogatory asking her to identify every false and malicious statement or bad recommendation made by appellees. However, she refused to acknowledge that she had lied about the transcript during her deposition and repeatedly insisted that she had used Cox's name "inadvertently."

After Vaughn's testimony, appellees called Arvy Jean Cox as a witness. Cox testified that she knew Vaughn casually through church, but had never discussed with Vaughn her application for a job at the insurance agency. Cox stated that Vaughn never asked her to phone Coffman at Gulf Publishing, and emphatically denied making the phone call referenced in the fabricated transcript.

Cox went on to recount that Vaughn telephoned her on May 11, 1989, and told her that she, Vaughn, had done something wrong and had used Cox's name without permission, and that she was having to "work undercover." She warned Cox that she might get a call from some attorneys, and instructed her to "tell them something but tell them nothing." During a later telephone call, Cox told Vaughn that she would not lie for her.

Based upon the evidence presented at the hearing, the trial court on its own motion reconsolidated Vaughn's suit against TEC with her suit against Gulf Publishing and the individual defendants, and granted appellees' motion to dismiss. The trial court specifically found that Vaughn lied both in her discovery and deposition responses, in violation of Texas Rule of Civil Procedure 215, and also during the evidentiary hearing when she testified that her misrepresentations were "inadvertent." Vaughn filed motions to recuse the judge and for new trial, both of which were overruled; this appeal follows.

In her sole point of error, Vaughn asserts that the trial court "blatantly" abused its discretion in its order of dismissal and imposition of sanctions. The order:

(1) reconsolidated her severed cause of action for unemployment compensation against TEC and Gulf Publishing with this cause;

(2) struck all of her plaintiff's pleadings against all parties;

(3) dismissed all of her claims against all defendants;

(4) imposed as sanctions a fine of $10,000, of which $7,500.00 was awarded as attorneys' fees to Vinson & Elkins, and $2,500.00 as attorneys' fees to TEC; and

(5) referred the case to the district attorney's office for criminal prosecution.

Texas Rule of Civil Procedure 215(2)(b) provides:

If a party ... fails to comply with proper discovery requests ... the court in which the action is pending may, after notice and hearing, make such orders in regard to the failure as are just, and among others the following:

....

(5) An order ... dismissing with or without prejudice the action or proceedings or any part thereof....

....

(8) In lieu of ... or in addition thereto, the court shall require the party failing to obey the order ... to pay, at such time as ordered by the court, the reasonable expenses, including attorney fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

Similarly, rule 215(3) provides:

If the court finds a party is abusing the discovery process in seeking, making or resisting discovery ... then the court ... may impose any sanction authorized by paragraphs ... (5) ... and (8) of paragraph 2b of this rule. Such order of sanction shall be subject to review on appeal from the final judgment.

The purpose of discovery sanctions is threefold: (1) to secure the parties' compliance with the rules of discovery; (2) to deter other litigants from violating the discovery rules; and (3) to punish parties who violate the rules of discovery. McRae v. Guinn Flying Serv., 778 S.W.2d 189, 191 (Tex.App.--Houston [1st Dist.] 1989, no writ). A trial court has broad discretion to impose sanctions, including...