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Brewer v. Lennox Hearth Products, LLC

Court of Appeals of Texas, Seventh District, Amarillo

March 26, 2018


          On Appeal from the 72nd District Court Lubbock County, Texas Trial Court No. 2012-504, 105; Honorable Ruben G. Reyes, Presiding

          Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.


          Patrick A. Pirtle, Justice.

         The right of trial by jury shall remain inviolate.

         Texas Constitution, Article I, Sec. 15

         In its simplest terms, this case involves the issue of whether a trial judge abused his discretion in ordering sanctions against an attorney in a pending civil case. At a more profound level, this case involves the right of a trial court to protect the integrity of the judicial system and to hold "inviolate" the right to trial by jury. For the reasons that follow, we affirm the decision of the trial court to impose sanctions in this case.


         Appellant, William A. Brewer III, an attorney who represented a defendant in a civil proceeding pending in the 72nd District Court, appeals a sanctions order entered by the presiding judge, the Honorable Ruben G. Reyes, on February 19, 2016. In the underlying civil proceeding, Brewer and his law firm, Bickel & Brewer, [1] represented Titeflex Corporation, Gastite Division, as the primary defendant in a multi-million dollar products liability/wrongful death cause of action arising from an explosion and fire allegedly caused by a defective or unreasonably unsafe corrugated stainless steel tubing ("CSST") product manufactured by Titeflex. The Plaintiffs and Appellees, Ken Teel, Becky Teel, Ross Rushing, Meg Rushing, and State Farm Lloyds Insurance Company, filed suit on October 3, 2012, alleging that a catastrophic fire claimed the life of the Teels' son while at the Rushings' residence. In addition to Titeflex, the Plaintiffs named Appellee, Turner & Witt Plumbing, Inc., among others, as a Defendant. During the course of the proceedings, third-party claims were subsequently made against Appellees, Thermo Dynamic Insulation, LLC, Strong Custom Builders, LLC, and Lennox Hearth Products, LLC.

         As a result of this unfortunate explosion, the Chief Building Official and Fire Marshal of the City of Lubbock issued a moratorium concerning the use of certain CSST products pending further investigation. The moratorium led to significant media coverage. In addition to the incident-generated media coverage, Plaintiffs' counsel engaged in multiple public relations activities, including a website about the alleged dangers of CSST and a survey of Lubbock County residents regarding public awareness of the existence of CSST gas plumbing. Similarly, Bickel & Brewer engaged Public Opinion Strategies, a public opinion consulting firm, to "conduct a random independent poll in regard to certain attitudes and opinions that would likely be prevalent among homeowners in Lubbock, Texas." Pursuant to that engagement, Public Opinion Strategies developed a draft of proposed survey questions which Bickel & Brewer attorneys revised.[2] Brewer himself personally approved the final draft of the survey questions.

         At the suggestion of Public Opinion Strategies, Brewer agreed on a survey of 300 participants. To complete 300 surveys, Public Opinion Strategies ordered a database of approximately 20, 000 names and phone numbers of Lubbock County residents over age eighteen and engaged Survey Sampling International, LLC, (hereinafter "SSI") to make phone calls to randomly selected phone numbers from that database. No one at Bickel & Brewer had any input in selecting the inclusion or exclusion of any name or phone number in the database.

         Trial was scheduled to commence on June 30, 2014. Approximately six weeks earlier, over a two-day period ending May 22, SSI conducted randomly selected computer-assisted telephone interviews, using the survey questionnaire approved by Brewer. The questions in the survey were randomized so that different participants would hear the questions in a different order. It is not known how many people in the database were contacted in order to obtain the requested 300 completed surveys.

         Six days after the polling was completed, Bickel & Brewer attorneys filed an ethics complaint against two City of Lubbock officials who had been designated as testifying witnesses. That same day, they had copies of the ethics complaint hand-delivered to members of the Lubbock City Council and released to the media.

         On June 6, 2014, the Plaintiffs filed a motion seeking "emergency protection" and sanctions as to Bickel & Brewer, alleging the telephone survey constituted an improper trial preparation tactic designed to (1) intimidate witnesses, (2) "infect and contaminate the jury pool, " and (3) secure a delay in the trial date. As a basis for that relief, the motion alleged that certain third parties had been contacted by SSI during the survey process in an "overt attempt to convince them who to blame for CSST failures in homes, in and around Lubbock, Texas."[3] The motion alleged that when initially asked by Plaintiffs' counsel as to whether polling was being conducted in Lubbock concerning the pending litigation, Brewer denied any knowledge of the poll.

         On June 9, 2014, in anticipation of the scheduled June 30 trial date, the trial court was conducting a pretrial hearing on the issue of disqualifying various designated witnesses. During that hearing, Plaintiffs' counsel raised the issue of the telephone survey. After some discussion regarding the necessity and availability of witnesses, the hearing was recessed until the next day. On June 10, after further discussion with counsel regarding the survey and the circumstances surrounding it, the trial judge referred to the matter as "disturbing." On June 11, additional defendants and designated responsible third-party defendants filed similar motions seeking sanctions against Bickel & Brewer. Further hearings were held on June 11, 16, 17, and 27. Finally, on June 27, in open court, Titeflex discharged Bickel & Brewer, citing the sanctions motions as the reason. As a result of this development, trial did not commence as planned on June 30.

         The trial court did, however, set a hearing on the sanctions motions for September 29, 2014. On September 17, Bickel & Brewer filed a verified motion for continuance seeking additional time to gather admissible evidence from third parties in support of its opposition to the motions. Attached to Bickel & Brewer's motion was the verification of James S. Renard, a Bickel & Brewer attorney, who stated that he had "read the facts set forth in the foregoing Motion to Continue Sanctions Hearing . . . which are true and correct based upon his personal knowledge and reasonable inquiry." The next day, the trial court denied Bickel & Brewer's motion for continuance and the sanctions hearing commenced as scheduled, picking up where it had ended on June 17. The trial court heard four additional days of testimony from fact and expert witnesses and it received documentary evidence on the matter of sanctions. The sanctions hearing concluded on October 2, and the trial court took the matter under advisement.

         Fifteen months later, on January 22, 2016, after taking into consideration "the motions, argument and briefing of counsel as well as the evidence presented - including but not limited to the conflicting testimony and credibility of the witnesses, " the trial court issued a letter ruling imposing sanctions against Brewer, individually, while imposing no sanctions against the firm of Bickel & Brewer. The letter ruling ordered that Appellees recover from Brewer fees and expenses totaling $133, 415.27, plus contingent fees and expenses totaling $43, 590.00.[4] In addition, the trial court ordered Brewer to successfully complete ten hours of continuing legal education on the topic of ethics. In the meantime, the merits of the underlying case were settled by all parties, and on February 19, 2016, the trial court entered its Order on Sanctions Motions . . . and Final Order of Dismissal, dismissing all claims, save and except the sanctions imposed against Brewer. A notice of appeal regarding the sanctions order was timely filed and this appeal followed.

         Raising seven issues, Brewer contends the trial court abused its discretion by: (1) awarding sanctions for conducting a survey when, as a matter of law, the conduct of a survey or poll to test "actual or hypothetical messages and themes in connection with a potential or pending case" is not a bad faith abuse of the judicial process; (2) basing a bad-faith-finding on mere gross negligence; (3) concluding, as a matter of law or fact, that he acted in bad faith; (4) imposing sanctions without a finding that the survey "significantly interfered" with the court's legitimate exercise of a traditional core function (or, alternatively, that the survey significantly interfered with the parties' rights to a trial by jury); (5) imposing sanctions that were more severe than necessary and just; (6) failing to consider an affidavit tendered; and, (7) denying his motion for continuance. Appellees and various amicus curie contend the trial court did not abuse its discretion and the imposition of sanctions was necessary to preserve, protect, and "hold inviolate" the right to trial by jury. An amicus curie brief was also filed in support of Brewer's contention that the survey in question was not a "push poll."[5]


         Generally, Brewer contends there was no evidence to support the required legal standard of intentional misconduct and that there was no evidence showing that, at the time of the survey, he acted with any bad faith or mens rea, as required by law. He further contends that lawyers cannot and should not be afraid to represent their clients zealously and that the sanctions order against him has a chilling effect on that duty. Appellees respond by arguing that the sanctions order is justified by the record and by the circumstances surrounding Brewer's participation in the telephone survey in question.

         Standard of Review

         A trial court has the inherent power to impose sanctions against an attorney and that power is derived, in part, from Article II of the Texas Constitution. Tex. Const. art. II, § 1 (recognizing that each branch of government-Legislative, Executive, and Judicial- has certain powers "properly attached" to that branch). In that regard, it has long been held that a trial court has the "inherent power" to sanction bad faith conduct of an attorney committed during the course of pending litigation that interferes with the effective administration of justice or the preservation of the court's dignity and integrity. Eichelberger v. Eichelberger, 582 S.W.2d 395, 398 (Tex. 1979); Onwuteaka v. Gill, 908 S.W.2d 276, 280 (Tex. App.-Houston [1st Dist.] 1995, no writ). As the Texas Supreme Court noted in Public Utility Com. v. Cofer, 754 S.W.2d 121, 124 (Tex. 1988), "[w]e can say without hesitation that in our adversary system, a court has not only the power but the duty to insure that judicial proceedings remain truly adversary in nature." (Emphasis in original). Courts may not, however, invoke this inherent power "without some evidence and factual findings that the conduct complained of significantly interfered with the court's legitimate exercise of one of its traditional core functions." Howell v. Tex. Workers' Comp. Comm'n, 143 S.W.3d 416, 447 (Tex. App.-Austin 2004, pet. denied) (citing Kennedy v. Kennedy, 125 S.W.3d 14, 19 (Tex. App.-Austin 2002, pet. denied)). Therefore, the court's "inherent power to sanction exists only to the extent necessary to deter, alleviate, and counteract bad faith abuse of the judicial process" affecting a core function of the court. Onwuteaka, 908 S.W.2d at 280.

         In applying that standard, an appellate court reviews a trial court's imposition of sanctions under an abuse of discretion standard. See Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004) (reinstating the trial court's sanctions order, finding that order was not an abuse of discretion); In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997) (same). See also Low v. Henry, 221 S.W.3d 609, 621-22 (Tex. 2007) (affirming the trial court's imposition of sanctions pursuant to section 10.001(3) of the Texas Civil Practice and Remedies Code but finding an abuse of discretion in not more specifically identifying a sufficient basis to support the amount of sanctions); Lawrence v. Kohl, 853 S.W.2d 697, 700-01 (Tex. App.-Houston [1st Dist.] 1993, no writ) (finding imposition of sanctions to be neither arbitrary or unreasonable in light of the circumstances). Under this standard, a trial court does not abuse its discretion in levying sanctions if some evidence supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009).

         Under an abuse of discretion standard, "an appellate court may reverse the trial court's ruling only if the trial court acted without reference to any guiding rules and principles, such that its ruling is arbitrary and unreasonable." Low, 221 S.W.3d at 614 (citing Cire, 134 S.W.3d at 838-39); Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006); Downer v. Aquamarine Operators, Inc. 701 S.W.2d 238, 241-42 (Tex. 1985). In deciding whether the trial court abused its discretion, we are cautioned to "bear in mind that the mere fact that a trial judge may decide a matter within his discretionary authority in a different manner than an appellate judge in a similar circumstance does not demonstrate that an abuse of discretion has occurred." City of Dallas v. Ormsby, 904 S.W.2d 707, 710 (Tex. App.-Amarillo 1995, writ denied).

         When evaluating the propriety of a sanctions order, an appellate court must also remain mindful that a sanctions order involves two separate judicial decisions: (1) whether to impose a sanction and (2) what sanction to impose. TransAmerican Nat'l Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). Therefore, in conducting our review of a sanctions order, we must conduct a two-part analysis by determining whether: (1) there is a direct relationship between the offensive conduct and the sanction imposed and (2) the sanction imposed is reasonable and not excessive. Id.

         In other words, any sanction imposed should be directly related to offensive conduct, be no more severe than required to satisfy legitimate purposes, and the "punishment should fit the crime." Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 849 (Tex. 1992). This means that a trial court must consider less stringent sanctions first to determine whether lesser sanctions will fully promote compliance, deterrence, and discourage further abuse. Id.; In re J.V.G., No. 09-06-00015-CV, 2007 Tex.App. LEXIS 5426, at *11 (Tex. App.-Beaumont July 12, 2007, no pet.) (mem. op.) (holding that "the fact that sanctionable conduct does not bear the label . . . of having 'interfered with the core functions of the trial court, ' does not indicate an abuse of discretion so long as the record indicates a direct relationship between the improper conduct and the sanction imposed, and that a lesser sanction would have been insufficient to serve its punitive function").

         Findings of fact and conclusions of law from a sanctions hearing are not the same as those contemplated by Rules 296 and 297 of the Rules of Civil Procedure; United States Fidelity & Guaranty Co. v. Rossa, 830 S.W.2d 668, 672 (Tex. App.-Waco 1992, writ denied), and such findings should not be given the same weight as findings made under those rules. Goff v. Branch, 821 S.W.2d 732, 738 (Tex. App.-San Antonio 1992, writ denied). During an appellate review, the entire record, including the evidence, arguments of counsel, written discovery on file, and the circumstances surrounding the party's sanctionable conduct, must be examined. Rossa, 830 S.W.2d at 672; Abcon Paving, Inc. v. Crissup, 820 S.W.2d 951, 954 (Tex. App.-Fort Worth 1991, no writ). Thus, we are not limited solely to a review of the "sufficiency of the evidence" to support the findings made or implied; rather, we make an independent inquiry of the entire record to determine whether the court abused its discretion in imposing the sanction in question. See Rossa, 830 S.W.2d at 672. See also Otis Elevator v. Parmelee, 850 S.W.2d 179, 181 (Tex. 1993); Chrysler Corp., 841 S.W.2d at 852-53.

         Issue One-Surveys are Not a Bad Faith Abuse of Judicial Process

         By his first issue, Brewer contends the trial court abused its discretion by sanctioning him because the use of a pretrial survey is not a "bad faith" abuse of the judicial process since "[t]here is no rule, ethics opinion, case, disciplinary rule, or other authority that prohibits the type of survey conducted in this case." He posits that because the use of surveys is not specifically prohibited, such surveys can be ethically administered, and their use is common, or at least generally accepted, rendering the trial court's imposition of sanctions ipso facto an abuse of discretion. Brewer contends that the absence of express authority directly prohibiting this conduct operates as implied permission to conduct such surveys. This is a logical fallacy. Such an argument fails to account for the inherent power of the trial court to oversee the trial of a cause of action or the interplay of the rules of professional conduct and ethics on unforeseen efforts to impact the outcome of a trial or to influence a witness. In that regard, Texas appellate courts have consistently held that a trial court has the inherent power to sanction litigants and attorneys whose abusive conduct affects a core function of the judiciary and this power exists regardless of whether the conduct is specifically proscribed by rule or statute. Davis v. Rupe, 307 S.W.3d 528, 530 (Tex. App.-Dallas 2010, no pet.) (decision reached on appeal of a different cause number in Ritchie v. Rupe, 339 S.W.3d 275 (Tex. App.-Dallas 2011), rev'd on other grounds, 443 S.W.3d 856 (Tex. 2014)).

         While, no doubt, pretrial surveys have been generally accepted as a legitimate method for testing actual or hypothetical arguments relating to a pending case, [6] Brewer assumes far too much in his categorical statement that the type of survey conducted in this case is not prohibited, at least inferentially, by case law, statute, or constitutional authority. In support of his argument, Brewer cites three cases: (1) Primrose Operating Co. v. Jones, 102 S.W.3d 188 (Tex. App.-Amarillo 2002, pet. denied) (involving the use of a mock trial), (2) United States v. Collins, 972 F.2d 1385 (5th Cir. 1992) (involving the use of a telephone survey), and (3) First Heights Bank, FSB v. Gutierrez, 852 S.W.2d 596 (Tex. App.-Corpus Christi 1993, writ denied) (recognizing that pretrial surveys are commonly conducted to support a motion to transfer venue).

         In Primrose, this court gave tacit approval to the use of a mock trial conducted shortly before jury selection in a personal injury lawsuit. In that case, the plaintiff's attorney assembled twelve individuals from a small close-knit community with a total population of just over 300 for the purpose of questioning community attitudes regarding various issues to be addressed at trial. The attorney first asked the participants if any of them had been summoned for jury duty in the upcoming case and one person was excluded when he indicated that he had been summoned. The attorney then summarized the evidence he expected each party to present. After the meeting, which lasted approximately two hours, the group opined on the apportionment of responsibility and damages. When the defendant's learned about the meeting, they made a pretrial motion for mistrial on the basis that the mock trial had tainted the entire venire. The trial court did not rule on the motion immediately. Instead, it deferred a ruling pending completion of the voir dire examination. During jury questioning, the effect of the mock trial was thoroughly examined by all parties, and at the conclusion of that phase of the trial, the motion for mistrial was denied. The issue on appeal was whether the trial court erred in denying the motion for mistrial. Under the facts of that case, this court held, "[w]hether [the plaintiff's] attorneys sought to influence members of the venire by communicating with non-members is a fact question for resolution by the trial court." Primrose, 102 S.W.3d at 194. The trial court's decision to deny the motion for mistrial was affirmed because, under the circumstances of that case, it could not be said that the trial court's decision was an abuse of discretion.

         Appellant also relies on United States v. Collins to support his argument that a pretrial survey of prospective jurors was permissible per se because it did not compromise the integrity of the jury selection process. In Collins, a federal judge was charged with bribery, obstruction of justice, and conspiracy relating to allegations that a criminal defendant had paid the judge and his associate $100, 000 in exchange for a lenient sentence. Prior to trial, the prosecution commissioned a telephone survey of 457 persons in the Eastern District of Louisiana, asking them various questions relating to the upcoming trial. The defendants found out about the survey and reported it to the district court, which in turn ordered the prosecution to cease all polling and to turn over the results of the poll to the court. After reviewing the polling material and the results collected, the court concluded that the integrity of the jury selection process had not been compromised.

         Contrary to Brewer's contention, this decision does not stand for the general proposition that "telephone surveys conducted in the trial venue do not endanger the impartiality of a potential jury venire and do not violate due process . . . ." To the contrary, it stands for the proposition that such surveys are subject to review by the presiding court in order to determine whether anything was done to compromise the integrity of the jury selection process. Collins, 972 F.2d. at 1398.

         Finally, in Gutierrez, the propriety of a pretrial survey conducted for purposes of supporting a change of venue was never in issue. In that case, surveys were conducted in order to gather information supporting a pretrial change of venue. Gutierrez, 852 S.W.2d at 620-21. No allegation was ever made that the survey itself compromised the jury pool or the integrity of the jury selection process. Here again, just because a survey might have been properly used for one purpose in one case does not make the use of all surveys proper in every case ipso facto.

         The common denominator in Primrose and Collins is that the appellate court affirmed the trial court's determination that the jury selection process had not been compromised. Neither of those cases involved the propriety of the trial court's decision to impose sanctions for such pretrial conduct. Here, however, we are faced with a situation where the trial court, after reviewing the evidence, came to the distinct conclusion that the survey had been a conscious attempt by the surveying party to influence the jury pool-a finding patently missing in both Primrose and Collins.

         It should be noted that Judge Reyes, in issuing his letter ruling, specifically stated that he was "not commenting on the broader issue of lawyers utilizing polling, focus groups or mock trials . . . ." The sanctions order entered in this case speaks only to the survey used in this particular case and the manner of its actual "implementation and utilization" in the case pending before the court. Because the trial court did not base its sanction order on the mere fact that a telephone survey had been used, issue one is overruled.

         Issues Two and Three-Bad Faith Requirement for Sanctions

         By his second issue, Brewer contends the trial court erred by basing its "bad faith" finding on mere gross negligence; and, by his third issue he contends the trial court erred by concluding that he acted in bad faith.

         "Trial courts have inherent power to impose sanctions for bad faith abuse of the judicial process even when the targeted conduct is not expressly covered by a rule or statute." Ezeoke v. Tracy, 349 S.W.3d 679, 685 (Tex. App.-Houston [14th Dist.] 2011, no pet.) (citing Eichelberger, 582 S.W.2d at 398). This inherent power exists to the extent necessary to deter, alleviate, and counteract the bad faith abuse of the judicial process, such as interference with the traditional core functions of the court. Ezeoke, 349 S.W.3d at 685 (citing McWhorter v. Sheller, 993 S.W.2d 781, 788-89 (Tex. App.-Houston [14th Dist.] 1999, pet. denied)).

         For a trial court to exercise its inherent power to sanction an attorney, the offending conduct must have been an intentional act committed in bad faith-mere negligence, inadvertence, or poor judgment is not enough. See McWhorter, 993 S.W.2d at 789. See also Onwuteaka, 908 S.W.2d at 280 (reversing sanctions order where the evidence supported a finding that the offending conduct might have been negligent but not supporting a finding of bad faith). A court's "inherent power to sanction exists only to the extent necessary to deter, alleviate, and counteract bad faith abuse of the judicial process, such as the significant interference with core judicial functions . . . ." Id. "An attorney who makes a reasonable decision in the handling of a case may not be held liable if the decision later proves to be imperfect." Cosgrove v. Grimes, 774 S.W.2d 662, 664-65 (Tex. 1989) (stating that the appropriate standard in a legal malpractice case is the "objective exercise of professional judgment" based on a "reasonably prudent attorney, " not a subjective standard; disapproving cases recognizing an exception to attorney negligence based on the "subjective good faith of an attorney").

         Therefore, even in the absence of applicable case law, statute, or constitutional provision prohibiting the use of pretrial telephone surveys, a court has the inherent authority to sanction a party, or his attorney, for the bad faith use of such a survey if it finds that to do so will aid in the exercise of its jurisdiction, the administration of justice, the preservation of judicial independence, or the integrity of the judicial process. See In re Bennett, 960 S.W.2d at 40 (citing Eichelberger, 582 S.W.2d at 398); Onwuteaka, 908 S.W.2d at 280. See also Howell, 143 S.W.3d at 451 (affirming the imposition of sanctions under Rule 13 of the Texas Rules of Civil Procedure but reversing for recalculation). A trial court's inherent power to neutralize inappropriate conduct exists to the extent, and only to the extent, that it is "necessary to deter, alleviate, and counteract the bad ...

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