Parker v. Walton

Citations: 233 S.W.3d 535; 2007 Tex. App. LEXIS 6877; 2007 WL 2416829Docket: 14-06-00095-CV

Court: Court of Appeals of Texas; August 28, 2007; Texas; State Appellate Court

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Mary Ann Parker appealed a trial court's sanctions order for recording a lis pendens on property awarded to Sheryl King Walton during their divorce proceedings. The appellate court reversed the sanctions, concluding that Walton should take nothing. The background includes Walton filing for divorce from Ronnie Joe Walton on July 1, 2003, with Parker later joined to contest claims regarding the property at 84 Harbor Lane. Walton sought court authorization to refinance the property, which was granted orally at a hearing on July 27, 2005. However, Parker's attorneys recorded a lis pendens on August 3, allegedly hindering Walton's refinancing efforts. At trial from December 6-9, Walton was awarded the property, but Parker's constructive trust claim was not presented to the jury. Following the trial, Walton filed for sanctions against Parker and others, claiming their actions were groundless and harassing. Parker contended that Walton did not provide sufficient evidence of bad faith or harassment and asserted that the lis pendens was recorded to protect her interests, as she was unaware of the court's order at the time. Arguments presented at the December 21 hearing included Walton's claims of financial harm due to the inability to refinance, while Parker's attorney highlighted the lack of notice regarding the refinancing authorization.

Walton's attorney asserted, and Sharretts acknowledged, that the lis pendens barred refinancing, yet Sharretts refused to release it. The trial judge recollected allowing Walton to refinance, despite the absence of written documentation of the court's order. At the hearing's conclusion, the trial court granted Walton's motion for sanctions, awarding $3,500 in attorney's fees and $6,750 for interest rate differences. Walton's attorney was to prepare a formal order, but it was not filed by the January 6, 2006 deadline, which Walton attributed to an inadvertent mistake. On June 22, 2006, Walton's attorney filed a motion for a nunc pro tunc judgment to correct the oversight. Parker opposed this, arguing that a nunc pro tunc judgment is only valid for clerical errors and not applicable since no written order existed. The trial court granted Walton's motion and issued the nunc pro tunc judgment on July 13, 2006, imposing sanctions against Parker for her conduct. Parker is now appealing, claiming the trial court abused its discretion in sanctioning her for recording the lis pendens on the Harbor Lane property. The appellate review will assess if the trial court acted arbitrarily or unreasonably and whether there was a direct link between Parker's actions and the sanctions. Parker contends she acted in good faith when recording the lis pendens, but Walton argues that sanctions were warranted for both the lis pendens and a groundless constructive trust claim related to the property. Texas Rule of Civil Procedure 13 permits sanctions for pleadings that are groundless and filed in bad faith or to harass, requiring the court to consider the circumstances at the time the pleadings were filed. Sanctions must be based on the actions of the represented party or counsel, not solely on the legal merit of the pleadings.

The trial court is required to provide notice and conduct an evidentiary hearing to assess the motives and credibility of individuals signing a petition deemed groundless, which is defined as lacking any basis in law or fact and not supported by a good faith argument for changing existing law. Bad faith entails a deliberate wrongdoing for dishonest purposes, with improper motive being a critical component. Harassment is characterized by pleadings intended to annoy or abuse another party. A presumption exists that legal filings are made in good faith, placing the burden on the party seeking sanctions to disprove this. 

Walton argues that Parker's constructive trust claim was groundless and filed in bad faith to cause harassment, as evidenced by the trial court's refusal to submit the claim to the jury, indicating a lack of supporting evidence. Walton also claims Parker recorded a lis pendens in bad faith to hinder her refinancing efforts, occurring shortly after the court authorized refinancing despite Ronnie Joe's objections.

However, the court found that Walton failed to disprove the presumption of good faith regarding Parker's claim. At the sanctions hearing, Walton did not provide evidence that Parker's claim was groundless or made with malicious intent, with the only relevant comment being her attorney's confusion over Parker's interest in the property. The court noted the absence of pleadings or transcripts that would demonstrate the lack of legal or factual basis for Parker's claim. Additionally, although the final divorce decree did not include the constructive trust claim and was not submitted to the jury, it did not classify Parker's claim as groundless. The court rejected Walton's assertion that the trial court's refusal to submit the claim to the jury was sufficient to prove it was groundless, citing that sanctions cannot be imposed solely based on denied requests for relief.

Walton did not provide evidence to support claims that Parker filed the constructive trust claim in bad faith or for harassment. The hearing primarily addressed the intent behind recording the lis pendens and whether Parker's attorneys were aware of the trial court’s financing order. This focus did not clarify the circumstances or motivations surrounding the filing of the constructive trust claim. The court referenced the case of Karlock v. Schattman, which emphasizes the need for evidence regarding the motives and credibility of the pleading signers to determine bad faith. Walton pointed to the timing of the lis pendens and the trial court's refusal to submit the constructive trust claim to the jury as evidence of bad faith, but failed to overcome the presumption of good faith in Parker's filing. The court also noted precedents where sanctions were deemed inappropriate without evidence of bad faith or harassment. Consequently, it held that the trial court abused its discretion in imposing sanctions on Parker. The judgment for sanctions was reversed, and Walton was ordered to take nothing. Additionally, the court acknowledged an unverified assertion regarding Walton's involvement in the divorce proceedings and noted conflicting documentation about the motion for sanctions, which did not impact the decision. Lastly, Parker claimed the sanctions order was void due to procedural issues, but this was not addressed as it did not affect the outcome.

The trial court's July 13 written order was deemed void due to the expiration of the court's plenary power. However, the court had orally granted Walton's motion for sanctions, allowing the subsequent entry of the order via nunc pro tunc, consistent with Texas case law permitting such actions when a judgment has been rendered but not recorded properly. Walton's failure to justify sanctions regarding the constructive trust claim linked to the lis pendens negated the need to assess the sanctionability of the lis pendens itself. The court referenced a precedent confirming a party's statutory right to file a lis pendens without incurring sanctions.

Parker's argument that the nunc pro tunc judgment imposing sanctions did not comply with Rule 13 was waived, as she did not raise this issue in the trial court. The record lacked evidence that Parker's claims were groundless or lacked legal basis. Consequently, the absence of specific findings of good cause in the sanctions order, as required by Rule 13, was not addressed at trial, further weakening Parker's position. The court rejected Walton's assertion that the refusal to submit Parker’s claim to jury automatically indicated it was groundless, noting that such a conclusion lacks supporting authority under Texas law.

Walton did not present evidence at the hearing to support claims that Parker filed the constructive trust claim in bad faith or to harass. The hearing's focus was primarily on the reasons behind Parker's attorneys recording the lis pendens and their awareness of the trial court's order for financing. This information did not clarify the circumstances or intentions surrounding the filing of the constructive trust claim. Citing the case of Karlock v. Schattman, the text emphasizes the necessity of evidence regarding the credibility and motives of the pleading signers to establish bad faith or harassment. Walton's argument relied solely on the timing of the lis pendens, which came after the refinancing order, and the trial court's decision not to submit the constructive trust claim to the jury, failing to provide sufficient evidence of bad faith or harassment. Without findings of fact and conclusions of law, the court concluded that Walton did not overcome the presumption of good faith regarding Parker’s claim. The court referenced other cases where sanctions were deemed inappropriate due to lack of evidence regarding bad faith or harassment. Consequently, the trial court's imposition of sanctions against Parker was deemed an abuse of discretion, leading to the reversal of the sanctions and a judgment that Walton take nothing. Additionally, the court noted that Parker's claim about Walton's participation in the divorce proceeding could not be verified but was accepted as true since Walton did not contest it. There was also a dispute regarding the status of Walton's motion for sanctions, but this was not pivotal to the court's decision.

The trial court granted Walton's requests for a final judgment and decree of divorce, as well as the release of the lis pendens. Parker contends that the July 13 order of sanctions was void because the trial court's oral pronouncement did not constitute a final order, as it anticipated a written order to follow by January 6, which did not happen. Parker argues that the subsequent written order was void due to the expiration of the court's plenary power. However, upon review, it was determined that the trial court did indeed orally render an order granting Walton's motion for sanctions, which justified the later entry of the order via nunc pro tunc as allowed by precedent.

The court found that Walton did not provide sufficient justification for the sanctions related to the constructive trust claim linked to the lis pendens, thus leaving the question of the lis pendens' sanctionability under Rule 13 unaddressed. The court referenced case law affirming the right to file a lis pendens regarding real estate disputes without facing sanctions. 

Parker also challenged the nunc pro tunc judgment for not complying with Rule 13, which requires that sanctions be based on good cause and specified particulars. However, Parker did not raise this objection in the trial court, resulting in a waiver of the complaint.