Opinion
No. 04-01-00822-CV.
Delivered and Filed: February 13, 2003.
Appeal from the 63rd Judicial District Court, Val Verde County, Texas, Trial Court No. 22263, Honorable Thomas F. Lee, Judge Presiding.
Affirmed.
Sitting: Alma L. LOPEZ, Chief Justice, Catherine STONE, Justice, Paul W. GREEN, Justice.
MEMORANDUM OPINION
Appellants Elvira Castaño and Marcos Gonzalez appeal the trial court's order granting summary judgment in favor of appellee San Felipe Agricultural, Manufacturing and Irrigation Company ("San Felipe") on all claims. Because we conclude that appellants' issues lack merit, we affirm the judgment of the trial court.
Factual and Procedural Background
The essential facts made the basis of this lawsuit are undisputed by the parties. Appellants, mother and son, own property in Val Verde County, Texas which serves as a residence. San Felipe, a private corporation, provides water for irrigation to various property owners who contract for such services. San Felipe provides water through a series of ditches which serve over 1500 acres and various landowners. One of these ditches, the Old San Felipe, is located on appellants' property. San Felipe's right to access the Old San Felipe ditch is based upon a document entitled "The Rules and Regulations of San Felipe," which is recorded in Uvalde County, Texas. The rules and regulations specifically provide that San Felipe has the right to access and maintain ditches currently in existence and those constructed in the future.
Appellants do not have a contract with San Felipe, and therefore are not provided with irrigation water. The City of Del Rio is their water source. In 1994, appellants alleged that they notified San Felipe to cease trespassing on their property as result of its refusal to provide them with irrigation water. San Felipe was again notified in February 1996 to cease and desist from entering appellants' property. In September 1997, appellants informed San Felipe that access to their property was conditioned on San Felipe providing them with irrigation water. In 1998, appearing pro se, appellants filed suit against San Felipe, its individual corporate officers, and the Val Verde Community Foundation.
A review of the record reflects that the parties do dispute whether appellants' use of the water would be for agricultural purposes or recreational use.
By their original petition, appellants alleged claims for nuisance, trespass, intentional negligence, deceptive trade practices under the Texas Deceptive Trade Practices Act, and unconscionable action and breach of contract. Appellants also filed an application for a temporary restraining order as part of their lawsuit to prevent San Felipe from entering their property. Appellants' application was initially granted. In December 1998, San Felipe filed a motion for summary judgment on the grounds that all of appellants' claim should be dismissed as a matter of law based upon deemed admissions. The record reflects that requests for admission were served on appellants, but that appellants failed to respond. These deemed admissions included an admission that appellants had not suffered any damages. In March 1999, while San Felipe's motion was still pending before the trial court, San Felipe filed its own application for a temporary restraining order and temporary injunction against appellants. That application was based upon a letter dated February 26, 1999, received by San Felipe from Marcos Gonzalez informing them that he planned to divert water from the Old San Felipe ditch for his use, remove certain equipment and concrete structures belonging to San Felipe, and prohibit San Felipe from entering the property. The temporary restraining order was granted. In response to San Felipe's application, appellants filed an original answer and counterclaims. The trial court subsequently granted San Felipe a temporary injunction which was conditioned on a $25,000 cash bond. Subsequently, the trial court granted San Felipe's motion for summary judgment on April 9, 1999 and ordered appellants' claims dismissed with prejudice. On that same day, appellants filed a motion non-suiting all defendants. The cash bond in support of San Felipe's injunction was increased to $35,000 in November 1999.
Over a year and a half later, in March 2001, San Felipe moved to release the cash bond on the grounds that the parties had arbitrated and settled issues relevant in the instant matter in a separate lawsuit involving the same parties. Accordingly, there was no need for the injunction to continue. Appellants responded to the motion and also filed a motion to recuse and motion to disqualify three different judges: the Honorable Thomas Lee, the Honorable Carl Pendergrass, and the Honorable George Thurmond. That motion was subsequently denied. Appellants also filed an amended answer and counterclaims in response to San Felipe's application for temporary injunction. Appellants pled a general denial and alleged counterclaims for abuse of process, fraud, bad faith, harassment, and wrongful injunction. Appellants also alleged that San Felipe had an adequate remedy at law and had engaged in inequitable conduct. On this same basis, appellants filed a motion to dissolve the temporary injunction granted in favor of San Felipe. An order granting San Felipe's motion to release the cash bond was entered by the trial court on June 4, 2001.
Also on June 4, 2001, appellants filed another motion to disqualify. Appellants specifically sought to disqualify Judge Lee on the basis that he had served as a lawyer in the matter in controversy. A written order on this motion was not entered. Subsequently, San Felipe filed a second motion for summary judgment on the grounds that the counterclaims alleged by appellants in their answer were the same or similar to the claims asserted in appellants' original petition that were dismissed with prejudice. San Felipe specifically contended there was no evidence to support appellants' fraud and abuse of process claims in light of the fact that it was granted temporary injunctive relief. San Felipe also filed a motion for sanctions pursuant to Texas Rule of Civil Procedure 13. Appellants filed a response. A final judgment granting San Felipe's motion for summary judgment was entered by the trial court on January 9, 2002. As part of that judgment, appellants were sanctioned in the amount of $2,000. Appellants appeal this judgment.
Analysis A. Motion for Summary Judgment
In their first issue, appellants contend the trial court erred in granting San Felipe summary judgment on their counterclaims. San Felipe moved for a summary judgment pursuant to Rule 166a(b) of the Texas Rules of Civil Procedure. We apply a de novo standard of review to the granting of a traditional summary judgment. To prevail on such a motion, a movant must establish that there is no genuine issue of material fact as to one or more essential elements of the non-movant's claims and that they are entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). When reviewing a summary judgment, we take as true all evidence favorable to the non-movant. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). We indulge every reasonable inference and resolve any doubt in the non-movant's favor. Id.
In their amended answer, appellants specifically premised their cause of action for fraud on San Felipe's assertion that it maintained a blanket easement. Appellants specifically alleged that San Felipe asserted "fraudulent and false statements regarding a purported blanket easement that . . . exists on [appellants'] private property. . . ." To support their claim for fraud, appellants needed to show that San Felipe (1) made a false material representation; (2) that was either known to be false when made or was made without knowledge of its truth; (3) that was intended to be acted upon; (4) that was relied upon; and (5) that caused injury. See Gilmartin v. KCTV-Channel 13, 985 S.W.2d 553, 558 (Tex.App.-San Antonio 1998, no pet.). In support of its motion for summary judgment, San Felipe provided the affidavit of Thomas Qualia, authorized representative for San Felipe, who attested to the fact that San Felipe had applied for a temporary injunction and had obtained it on the basis that San Felipe had an easement as provided in the rules and regulations filed of record in Uvalde County. As noted above, these rules and regulations clearly gave San Felipe the right to access and maintain the ditches located on appellants' property. At this point, appellants had the burden to produce proof in support of their fraud allegations. See Pinckley v. Gallegos, 740 S.W.2d 529, 531 (Tex.App.-San Antonio 1987, writ denied). Appellants failed to present evidence that San Felipe's right to access Old San Felipe was unfounded or that the rules and regulations upon which San Felipe based its right were false. Accordingly, San Felipe established its right to judgment as a matter of law on appellants' fraud claim.
Appellants' counterclaims also included a claim for abuse of process. Abuse of process is the malicious use or misapplication of process in order to accomplish an ulterior purpose. Hunt v. Baldwin, 68 S.W.3d 117, 129 (Tex.App.-Houston [14th Dist.] 2001, no pet.); Detenbeck v. Koester, 886 S.W.2d 477, 480 (Tex.App.-Houston [1st Dist.] 1994, no writ). To prove a claim for abuse of process, appellants needed to show that (1) San Felipe made an illegal, improper or perverted use of the process, a use neither warranted nor authorized by the process; (2) had an ulterior motive or purpose in exercising such illegal, perverted, or improper use of the process; (3) and damage as a result of such illegal act. See Hunt, 68 S.W.3d at 129-30. Texas law recognizes a cause of action for abuse of process where the original process has been used to accomplish an end other than that which it was designed to accomplish. See id. In other words, the original issuance of the legal process was justified, but the process itself was subsequently used for a purpose for which it was not intended. See id. If wrongful intent or malice caused the process to be issued initially, the claim is one for malicious prosecution. See id. On appeal, appellants contend that San Felipe abused the process by obtaining a restraining order and temporary injunction. They specifically contended that San Felipe's act of moving to withdraw the cash bond amounted to admission that their claims in support of their application for temporary restraining order and temporary injunction lacked merit.
The defendant SFAMIC has now filed its Motion to Release Cash Bond without the final merits of their Application of Temporary Restraining Order being determined by a trial and jury as requested by the plaintiff CASTANO. This is an admission to the Court by the defendant SFAMIC that all of its claims are without merit.
In making such an assertion, appellants are essentially arguing that the original purpose of the injunction was for an improper use. See Hunt, 68 S.W.2d at 130. Thus, appellants are essentially making a claim for malicious prosecution and not a claim for abuse of process. See id. Appellants failed to allege or produce evidence as to how San Felipe's act of moving to release the cash bond was improper, illegal, or constituted a perverted use of the injunction process. Additionally, appellants failed to allege and produce evidence as to San Felipe's ulterior purpose. For these reasons, we conclude the trial court did not err in granting San Felipe judgment as a matter of law on appellants' claim for abuse of process.
Appellants also contend that the trial court erred in granting summary judgment on all of their claims for wrongful injunction and harassment because San Felipe's motion failed to specifically address these claims. San Felipe admits that the wrongful injunction issue was inartfully pled in its motion. Nevertheless, it contends that the evidence presented in support of their motion established that all of appellants' claims, including wrongful injunction and harassment, fail as a matter of law. A review of the motion reflects that wrongful injunction and harassment are not specifically mentioned. However, where a defendant has conclusively disproven an ultimate fact central to all causes of action or an unaddressed cause of action derivative of the addressed causes of action, summary judgment may be affirmed. See, e.g., Smith v. Heard, 980 S.W.2d 693, 697-98 (Tex.App.-San Antonio 1998, pet. denied); Cissne v. Robertson, 782 S.W.2d 912, 918 (Tex.App.-Dallas 1989, writ denied). Accordingly, we determine whether San Felipe's summary judgment evidence disproves appellants' cause of action for wrongful injunction.
We are only concerned with appellants' cause of action for wrongful injunction as Texas law does not recognize a separate and independent cause of action for harassment. For this reason, the trial court did not err in granting San Felipe summary judgment on this claim.
There are two separate causes of action for wrongful injunction: (1) on a bond ordinarily filed to obtain the injunction and (2) malicious prosecution. DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 685 (Tex. 1990); Beathard Joint Venture v. West Houston Airport Corp., 72 S.W.3d 426, 435 (Tex.App.-Texarkana 2002, no pet.). To prevail on an injunction bond, the claimant must prove the temporary restraining order or temporary injunction was issued or perpetuated when it should not have been and that it was later dissolved. A claimant need not prove that the temporary restraining order or temporary injunction was obtained maliciously or without probable cause. DeSantis, 793 S.W.2d at 686. Instead, such elements must be proven in a claim for malicious prosecution. In a cause of action for malicious prosecution, the claimant must prove that the injunction suit was prosecuted maliciously and without probable cause and was terminated in his favor. Id. Under either cause of action, the claimant must prove that the issuance of the injunction caused him damages. Id.
Appellants' amended answer and counterclaims do not assert the breach of the condition of the bond. Rather, appellants assert a claim for malicious prosecution because they specifically pled that the temporary restraining order and temporary injunction were issued wrongfully against them. In support of its motion, San Felipe offered the application for temporary restraining order supported by Qualia's affidavit that established San Felipe's right to access appellants' property, the potential adverse action Gonzalez would take (such as removing concrete barriers owned by San Felipe), and the irreparable harm that could result from such actions. The affidavit was supported by the rules and regulations granting San Felipe a blanket easement and Gonzalez's notice and demand letter. This evidence established that San Felipe had a reasonable belief that Gonzalez would interfere with its legal rights and, therefore, was legally justified in seeking the injunction. See Beathard Joint Venture, 72 S.W.3d at 435. Other than appellants' assertion that the temporary restraining order and temporary injunction were wrongfully issued, there is no evidence that San Felipe acted maliciously or without probable cause. The summary judgment evidence establishes there is no genuine issue of material fact on appellants' wrongful injunction claim. Accordingly, the trial court did not err in granting San Felipe summary judgment on this claim.
Appellants rely on the case of Futerfas v. Park Towers, 707 S.W.2d 149 (Tex.App.-Dallas 1986, writ ref'd n.r.e.), for the proposition that San Felipe's voluntary dismissal of its injunction is prima facie evidence of wrongful injunction. In Futerfas, the residents obtained a temporary restraining order against Futerfas, the owner of property on which a noisy nightclub was located. In that case, the temporary restraining order expired by its own terms and the residents did not proceed with their application for temporary injunction. Because the residents did not proceed with their application, the court concluded that the application for injunctive relief terminated in favor Futerfas and, therefore, he succeeded on his claim for wrongful injunction. Id. at 158. Appellants contend the same should occur here. We disagree because we do not have the same scenario here. In the instant matter, San Felipe obtained a temporary restraining order. In addition, it pursued its application for temporary injunction against appellants and obtained a temporary injunction in March 1999. The injunction was still in effect at the time San Felipe moved for summary judgment. Therefore, we cannot say that the temporary injunction was terminated in appellants' favor.
We also address appellants assertion that San Felipe's evidence in support of its motion was not competent summary judgment evidence. Appellants particularly contend San Felipe's application for restraining order and supporting evidence were insufficient to support an injunction, specifically irreparable harm. We reject appellants' contention. Contrary to appellants' assertion that the application is based on mere fear or apprehension, Qualia's affidavit in support of the injunction asserts irreparable harm and specifies that such harm is based on appellants' action of suspending San Felipe's operations. Appellants also contend that Qualia's affidavit in support of the motion for summary judgment is not readily controvertible and contains contradictory statements. The record reflects that appellants failed to object to Qualia's affidavit on this basis. Therefore, appellants waived their complaint that Qualia's affidavit is readily controvertible. See Patterson v. Mobiloil Fed. Credit Union, 890 S.W.2d 551, 554 (Tex.App.-Beaumont 1994, no writ). Finally, appellants contend that the summary judgment evidence upon which San Felipe relies is contradictory. Specifically, appellants contend that Qualia's affidavit in which he stated that San Felipe had a "valid, legal intent to protect" by seeking an injunction contradicts his acknowledgment in his affidavit in support of the application for injunction that Gonzalez's actions of removing concrete barriers was lawful. Therefore, according to appellants, a fact issue exists. We disagree with this contention given evidence to support that Gonzalez would undertake other actions, such as diverting water for his use, which would also cause San Felipe irreparable harm.
For the reasons stated above, we conclude the trial court did not err in granting San Felipe's summary judgment and overrule appellants' first issue.
B. Sanctions
In their second issue, appellants contend that the trial court abused its discretion in ordering sanctions against them. Conversely, San Felipe contends that the trial court did not abuse its discretion on the basis that appellants' amended pleadings and counterclaims were groundless and in bad faith. The record reflects San Felipe filed a motion for sanctions pursuant to Rule 13 of the Texas Rules of Civil Procedure. The motion contended that appellants' counterclaims in their amended pleadings asserted many of the same causes of action which had previously been dismissed with prejudice.
We review the imposition of sanctions by an abuse of discretion standard. Herring v. Welborn, 27 S.W.3d 132, 143 (Tex.App.-San Antonio 2000, pet. denied). Our scope of review is the entire record that was before the trial court. Id. We review the conflicting evidence in the light most favorable to the trial court's ruling, and draw all reasonable inferences in favor of the trial court's ruling. Id. In reviewing a trial court's action of granting or denying sanctions, we ordinarily look to its formal findings of fact and conclusions of law. When a trial court does not make findings of fact and conclusions of law, we infer all necessary fact findings to support the judgment. See McCain v. NME Hosps., Inc., 856 S.W.2d 751, 756 (Tex.App.-Dallas 1993, no writ).
The purpose of Rule 13 is to check abuses in the pleading process. See Skepnek v. Mynatt, 8 S.W.3d 377, 382 (Tex.App.-El Paso 1999, pet. denied); Emmons v. Purser, 973 S.W.2d 696, 700 (Tex.App.-Austin 1998, no pet.). Under this rule, the trial court imposes sanctions against an attorney, a party, or both who filed a pleading that is either (1) groundless and brought in bad faith or (2) groundless and brought for purposes of harassment. Id. A groundless pleading is one that has no basis in law or fact and is not warranted by a good faith argument for the extension, modification, or reversal of existing law. Tex.R.Civ.P. 13; GTE Comm. Sys. Corp. v. Tanner, 856 S.W.2d 725, 730 (Tex. 1993). A trial court must consider the facts available to the litigant and the circumstances at the time the party filed the pleading. See Skepnek, 8 S.W.3d at 382-83. In addition to showing that a pleading is groundless, the party seeking sanctions must also prove the pleading party's subjective state of mind by showing that they acted in bad faith. See GTE Comm., 856 S.W.2d at 731. Rule 13 sanctions cannot merely be based upon the merit of the pleadings; rather, the trial court is required to hold an evidentiary hearing to make the necessary determinations of motive and credibility of the party signing the alleged groundless petition. See McCain, 856 S.W.2d at 757-58.
Appellants were pro se below. The hearing consisted of arguments from both San Felipe's defense counsel and Gonzalez. Gonzalez argued that he filed counterclaims in response to the application for temporary restraining order and temporary injunction. San Felipe argued that appellants' counterclaims and amended counterclaims were tied to the original claims which were dismissed with prejudice. San Felipe particularly focused on the timing of appellants' amended pleadings, asserting that they came on the heels of the trial court's order dismissing appellants' original claims. While not stated in their motion, San Felipe also complained of its ongoing defense of appellants' motions to disqualify. San Felipe's counsel also argued that appellants' pleadings were brought in bad faith.
Appellants contend that they were denied an evidentiary hearing. As noted, appellants appeared pro se below. The record reflects that a hearing was held before the trial court where Gonzalez argued against San Felipe's motion. While Gonzalez did not take the stand, he was able to provide testimony regarding his version of events. Specifically, Gonzalez was able to articulate that he filed such counterclaims so as to defend himself and his mother from a temporary restraining order. He was also able to argue against San Felipe's assertion regarding the timing of his amended counterclaims. We conclude that the record reflects that appellants were provided with an evidentiary hearing.
Appellants also complain that the trial court failed to take judicial notice of the pleadings and San Felipe's failure to attach exhibits to its motion. Appellants fail to cite authority for the proposition that such specific actions are required. Because the trial court must examine the facts available to appellants and the circumstances existing at the time they filed their pleadings, the trial court had to consider the record as a whole in making its determination in this case. The fact that the trial court did not take judicial notice of the pleadings or that San Felipe did not attach such pleadings as exhibits is of no consequence.
The record reflects that appellants filed their original lawsuit alleging claims for nuisance, trespass, unconsciounable action, breach of contract, intentional negligence, and deceptive trade practice in March 1998. Appellants' claims for breach of contract, intentional negligence and trespass were based upon San Felipe's continued use of its easement and its refusal to provide water to appellants. These claims were dismissed with prejudice by the trial court granting San Felipe's first motion for summary judgment. On the same day the claims were dismissed, appellants moved to non-suit San Felipe. As asserted by Gonzalez, appellants immediately answered San Felipe's application for temporary injunction and asserted counterclaims which, in name, were different than those asserted in their original petition. The answer and counterclaims were then amended. Like their original petition, appellants' amended pleadings took specific issue with San Felipe's claim of its right to access their property and San Felipe's refusal to provide them with irrigation water. Under these circumstances, we hold that the trial court could have reasonably concluded that appellants were trying to relitigate the same matters and, as such, that appellants' responsive pleading was groundless.
We must also determine whether the evidence supports the trial court's determination that appellant acted in bad faith or filed its counterclaims for purpose of harassing San Felipe. Intent for purposes of Rule 13 may be proven by circumstantial evidence as well as direct evidence. Schnexnider v. Scott White Mem'l Hosp., 953 S.W.2d 439, 441 (Tex.App.-Austin 1999, no writ). The record in this case contains evidence from which the trial court could have inferred that appellants filed their responsive pleading in bad faith. As noted above, the factual basis and essential complaint of appellants in both their original petition and counterclaims was San Felipe's ability to access their land and its refusal to provide them with irrigation water. This evidence, coupled with appellants' prior attempts to non-suit San Felipe after the first summary judgment, could have led the trial court to reasonably conclude that appellants were relitigating claims which had already been dismissed with prejudice. We cannot say the trial court abused its discretion in awarding sanctions to San Felipe. Accordingly, we overrule appellant's second issue.
C. Motion to Recuse and Motion to Disqualify
In their third and final issue, appellants contend that the trial court abused his discretion in refusing to refer appellant's second and third motions to disqualify to the administrative judge for the judicial district. San Felipe contends that these motions were rendered moot by the order denying appellants' first "Motion to Recuse and Motion to Disqualify." We hold that the trial court did not abuse its discretion in failing to refer appellants' second and third motions.
Rule 18a of the Texas Rules of Civil Procedure provides the required elements a motion to recuse or disqualify should contain. One important requirement under the rule is that a party "state with particularity the grounds why the judge before whom the case is pending should not sit." Tex.R.Civ.P. 18a(a). Appellants' second motion to disqualify was narrower in scope than its first motion to recuse and disqualify because it sought to only disqualify Judge Thomas Lee on the grounds that he had served as a lawyer in the matter in controversy. See Tex.R.Civ.P. 18b(1)(a). In their motion, appellants specifically refer to two different cases. However, appellants do not state that Judge Lee served as a lawyer in these cases nor do they describe how his position as a lawyer in those cases implicated the instant matter to warrant his disqualification. Simply, appellants failed to state with particularity why Judge Lee should have been disqualified. Therefore, appellants' motion did not meet the requirements of Rule 18a. Under these circumstances, we cannot conclude that the trial court abused its discretion in failing to refer the motion to disqualify to the administrative judge for the judicial district. We overrule appellants' third issue.
Conclusion
For the reasons stated above, we overrule appellants three issues on appeal and affirm the judgment of the trial court.