TRISHE RESOURCES, INC.; TRISHE WIND MINNESOTA, LLC; AND TRISHE WIND COLORADO, LLC, Appellants
HILLIARD ENERGY, LTD., Appellee
Appeal from the 385th District Court Midland County, Texas
Trial Court Cause No. CV 50941
consists of: Bailey, C.J., Wright, S.C.J.,  and Dauphinot,
WRIGHT, SENIOR CHIEF JUSTICE
it imposed lesser sanctions against Appellants (collectively,
Trishe), the trial court entered "death penalty"
sanctions and entered a default judgment against Trishe. This
is an appeal from the default judgment and a previous partial
summary judgment. Trishe raises three issues on appeal.
First, Trishe contends that the trial court abused its
discretion when it assessed approximately $2.1 million in
sanctions against Trishe. Second, Trishe argues that the
trial court abused its discretion when it awarded Hilliard
$33, 454.98 in attorney's fees as a discovery sanction.
Third, Trishe asserts that the trial court erred when it
granted Hilliard a summary judgment for contractual interest
on success fees under the parties' contract. We affirm in
part and reverse and remand in part.
August 2014, Trishe entered into a consulting contract with
Hilliard whereby Hilliard agreed to assist Trishe in the
marketing and sale of wind farms. Hilliard was to be paid a
monthly consulting fee. Hilliard was also to receive a
"success fee" equivalent to 12% of any sale that
occurred during the contract term or 5% of any sale that
occurred within eighteen months after the contract
Trishe later terminated the contract, Hilliard sued Trishe
for breach of contract and alleged that Trishe had failed to
pay fees that were due under the contract. Hilliard later
filed a motion to compel discovery on the grounds that Trishe
had failed to produce financial records-principally bank
statements-in response to repeated requests for production.
The trial court granted Hilliard's motion and ordered
Trishe to produce the documents within thirty days and to pay
$1, 200 in discovery sanctions.
later filed a motion for sanctions and alleged that Trishe
had failed to produce the documents and had also failed to
pay the sanctions. Hilliard requested that the trial court
enter an order by which Trishe would be prohibited from
conducting further discovery under Rule 215.2(b)(1) of the
Texas Rules of Civil Procedure. Hilliard also asked the trial
court to order Trishe to pay Hilliard's legal fees under
Rule 215.2(b)(8) and to strike Trishe's pleadings under
trial court conducted a hearing on Hilliard's motion.
During the hearing, Hilliard's counsel explained that, in
addition to the fact that some requested documents were still
missing, many of the documents that had been produced
appeared to have been altered or redacted to exclude
necessary information. The trial court granted the motion. In
its order, the trial court prohibited further discovery by
Trishe, struck Trishe's pleadings, and ordered Trishe to
pay $33, 454.98 in legal fees and court costs to Hilliard.
also filed a motion for partial summary judgment for unpaid
consulting and success fees and expenses from the sales of
wind farms in Ohio and Minnesota. Trishe did not respond. The
trial court granted the motion and awarded Hilliard a total
of $344, 848.15 in damages and contractual interest. The
summary judgment order left open Hilliard's claim for
additional damages related to the sale of the Ohio wind farm.
Trishe was to be paid under the Ohio sales contract in a
series of payments for specified construction milestones.
Hilliard's success fee was payable only if, and as,
Trishe received payment.
filed yet another motion for sanctions when Trishe continued
to fail to produce the required documents and continued to
fail to pay the ordered sanctions. Hilliard requested a
default judgment under Rule 215.2(b)(5) and requested that
the trial court enter a deemed finding that "the Ohio
wind farm was built to its full potential, meaning that
milestone payments due to [Hilliard] will be calculated as
though each milestone was met timely and to its full
potential" as identified in the original contract.
Hilliard argued that it was due a total success fee of $2,
114, 220. Therefore, Hilliard "request[ed] that Trishe
be ordered to pay sanctions in the amount of $2, 114,
220." Trishe did not appear at the hearing on
Hilliard's motion. The trial court entered a default
judgment in which it awarded Hilliard:
• the previously granted sanctions of $1, 200;
• the previously granted sanctions of $33, 454.98;
• damages of $344, 848.15, as previously granted in the
summary judgment order;
• sanctions in the amount of $2, 114, 220; and
• attorney's fees of $4, 396.24.
address Trishe's first issue on appeal. In that issue,
Trishe contends that the trial court abused its discretion
when it assessed approximately $2.1 million in sanctions
review a trial court's ruling on a motion for discovery
sanctions for an abuse of discretion. Cire v.
Cummings, 134 S.W.3d 835, 838 (Tex. 2004). A trial court
abuses its discretion when its ruling is arbitrary,
unreasonable, or without reference to any guiding rules or
legal principles. Id. at 838-39; Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.
1985). An appellate court reviews the entire record,
including the evidence, arguments of counsel, written
discovery on file, and the circumstances surrounding the
party's discovery abuse. Tidrow v. Roth, 189
S.W.3d 408, 412 (Tex. App.-Dallas 2006, no pet.).
court has discretion to impose sanctions for discovery abuses
under Rule 215 of the Texas Rules of Civil Procedure.
Tex.R.Civ.P. 215. If a party fails to comply with an order
compelling discovery or abuses the discovery process, a trial
court can strike the party's pleadings or render a
judgment by default after notice and hearing. Tex.R.Civ.P.
215.2(b)(5), 215.3. Any sanction by the trial court that is
based on the party's conduct during discovery, and by
which a trial court adjudicates a party's claim without
regard to the merits, constitutes a "death-penalty"
sanction. State v. Bristol Hotel Asset Co., 65
S.W.3d 638, 647 (Tex. 2001).
sanctions serve three purposes: (1) to secure compliance with
discovery rules; (2) to deter other litigants from similar
misconduct; and (3) to punish parties for violating the
discovery rules. Response Time, Inc. v. Sterling Commerce
(N. Am.), Inc., 95 S.W.3d 656, 659 (Tex. App.-Dallas
2002, no pet.). When an appellate court determines whether
sanctions imposed are just, it is to consider (1) whether
there is a direct relationship between the offensive conduct
and the sanctions imposed and (2) whether the sanctions are
excessive. TransAmerican Nat. Gas Corp. v. Powell,
811 S.W.2d 913, 917 (Tex. 1991). Further, the trial court
should always consider and test lesser sanctions before
imposing case-determinative sanctions. Chrysler Corp. v.
Blackmon, 841 S.W.2d 844, 849 (Tex. 1992).
like the present case, involved the imposition of a
case-determinative sanction. The court discussed some of the
restraints on such extreme punishment:
Discovery sanctions cannot be used to adjudicate the merits
of a party's claims or defenses unless a party's
hindrance of the discovery process justifies a presumption
that its claims or defenses lack merit. However, if a party
refuses to produce material evidence, despite the imposition
of lesser sanctions, the court may presume that an asserted
claim or defense lacks merit and dispose of it. . . .
Sanctions which are so severe as to preclude presentation of
the merits of the case should not be assessed absent a
party's flagrant bad faith or counsel's callous
disregard for the responsibilities of discovery under the
TransAmerican, 811 S.W.2d at 918 (citations
to Trishe's timely request, the trial court filed
findings of fact and conclusions of law. Although findings of
fact and conclusions of law extend the appellate timetables
under Rule 26.1(a)(4) of the Texas Rules of Appellate
Procedure, they are not required after a judgment rendered as
sanctions. IKB Indus. v. Pro-Line Corp., 938 S.W.2d
440, 443 (Tex. 1997). Thus, an appellate court need not give
findings of fact made after a judgment rendered as sanctions
the same deference as findings of fact made after a trial on
the merits. Id. at 442; see Chrysler, 841
S.W.2d at 852. In this case, however, the trial court's
findings are helpful because they are supported by the record
and are "specifically tied to an appropriate legal
standard," the standard set forth in
TransAmerican. See Chrysler, 841 S.W.2d at
the pertinent facts found by the trial court, excluding