Opinion
No. 05-16-00587-CV
07-24-2017
JOHN JEFFREY MCCAFFERTY, Appellant v. MARY M. MCCAFFERTY, ALANA MCCAFFERTY, AND AMANDA MCCAFFERTY, Appellees
On Appeal from the 254th Judicial District Court Dallas County, Texas
Trial Court Cause No. DF-08-05932
MEMORANDUM OPINION
Before Justices Lang-Miers, Evans, and Schenck
Opinion by Justice Lang-Miers
Appellant John Jeffrey McCafferty appeals the trial court's order concerning a post-divorce petition for enforcement of a property division and for breach of contract and for enforcement of an interim order on a petition for enforcement filed by appellees, Mary M. McCafferty, Alana McCafferty, and Amanda McCafferty. In six issues, Jeffrey argues that the trial court erred in admitting evidence regarding attorney's fees and awarding $33,115 in attorney's fees, in overruling Jeffrey's motion to modify, correct, or reform the judgment or motion for new trial, in imposing a sanction of $10,000 on Jeffrey, in not awarding a credit of $4,485 to Jeffrey against the judgment, and in awarding Alana a judgment against Jeffrey for $7,500 for unpaid support and living expenses. We affirm.
Because the parties have the same surname, we refer to them by first names in this opinion.
BACKGROUND
Jeffrey and Mary entered into an Agreed Final Decree of Divorce that included provisions concerning the division of their marital estate and obligations to their three children—two of whom are appellees Alana and Amanda. This appeal arises from Mary, Alana, and Amanda's petition for enforcement, for breach of contract, and for enforcement of an interim order alleging that Jeffrey had not complied with court orders concerning the property division and owed several unpaid obligations to their children under the terms of the divorce decree. After a hearing, the trial court entered an order granting them relief and denied Jeffrey's Motion to Modify, Correct, or Reform Judgment or, Alternatively, Motion for New Trial.
The trial court considered the "Fourth Amended Petition for Enforcement of Property Division and Petition for Breach of Contract and for Enforcement of Interim Order on Petition for Enforcement" of Mary, Alana, and Amanda.
Jeffrey appeals four portions of the Order: (1) judgment in favor of Mary against Jeffrey for $168,361.28 for Mary's community property interest in the marital residence, (2) judgment against Jeffrey for $33,115.00 for attorney's fees and costs, (3) judgment against Jeffrey for $10,000 as sanctions, and (4) judgment against Jeffrey for $7,500 in favor of Alana for unpaid support and living expenses.
STANDARD OF REVIEW
We review most family law issues, including the issues raised in this appeal, for an abuse of discretion. In re Marriage of C.A.S. and D.P.S., 405 S.W.3d 373, 382 (Tex. App.—Dallas 2013, no pet.); In re A.B.P., 291 S.W.3d 91, 95 (Tex. App.—Dallas 2009, no pet.). A court abuses its discretion when it acts unreasonably, arbitrarily, or without reference to guiding rules and principles. See Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). A trial court does not abuse its discretion when there is some evidence of a substantive and probative character to support its decision. In re A.E.R., No. 05-15-00019-CV, 2016 WL 4205683, at *1 (Tex. App.—Dallas Aug. 9, 2016, pet. filed) (mem. op.).
In family law cases, legal and factual sufficiency challenges do not constitute independent grounds for asserting error, but are relevant factors in determining whether the trial court abused its discretion. Id. To determine whether the trial court abused its discretion because the evidence is legally or factually insufficient to support the trial court's decision, we consider whether the trial court (1) had sufficient evidence upon which to exercise its discretion and (2) erred in its application of that discretion. Id.
A trial court's findings are reviewable for legal and factual sufficiency of the evidence under the same standards that are applied in reviewing evidence supporting a jury's answer. Id. In evaluating a legal sufficiency challenge, we credit evidence that supports the finding if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); In re A.E.R., 2016 WL 4205683, at *1. The test for legal sufficiency is "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller, 168 S.W.3d at 827. In a factual sufficiency review, we examine all the evidence in the record and will reverse only if the finding is so against the great weight of the evidence as to be clearly wrong and unjust. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996) (per curiam); In re A.E.R., 2016 WL 4205683, at *1.
ATTORNEY'S FEES
Jeffrey contends his first three issues "(effectively) deal with the same substantive complaint" and, as a result, "group[s]" them together. In those three issues, he argues that the trial court abused its discretion in admitting time records of Mary, Alana, and Amanda's former attorneys through the testimony of their current attorney, in granting Mary a judgment against him for $33,115.00 for attorney's fees and costs, and in overruling his motion to modify, correct, or reform the judgment or motion for new trial.
Standard of Review and Applicable Law
We review a trial court's rulings admitting or excluding evidence under an abuse of discretion standard. Ten Hagen Excavating, Inc. v. Castro-Lopez, 503 S.W.3d 463, 490 (Tex. App.—Dallas 2016, pet. denied). We will uphold the ruling if there is any legitimate basis in the record to support it. Id. Even if the trial court abused its discretion in admitting evidence, erroneous admission of evidence requires reversal only if the error was harmful, meaning the admission of the evidence probably resulted in an improper judgment. U-Haul Int'l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012).
Section 9.014 of the family code provides the trial court "may award reasonable attorney's fees in a proceeding under this subchapter[,]" which includes proceedings to enforce a decree of divorce. TEX. FAM. CODE ANN. § 9.014 (West Supp. 2016); see TEX. FAM. CODE ANN. § 9.001 (West Supp. 2016) (Enforcement of Decree); In re S.E.C., No. 05-08-00781-CV, 2009 WL 3353624, at *1 (Tex. App.—Dallas Oct. 20, 2009, no pet.) (mem. op.). The trial court does not abuse its discretion when an award of attorney's fees is supported by the evidence. Tull v. Tull, 159 S.W.3d 758, 760 (Tex. App—Dallas 2005, no pet.). "Texas law is clear that '[t]he issue of reasonableness and necessity of attorney's fees requires expert testimony.'" Woodhaven Partners, Ltd. v. Shamoun & Norman, L.L.P., 422 S.W.3d 821, 830 (Tex. App.—Dallas 2014, no pet.) (quoting Twin City Fire Ins. Co. v. Vega-Garcia, 223 S.W.3d 762, 770-71 (Tex. App.—Dallas 2007, pet. denied)). A judgment awarding attorney's fees may be supported solely by the testimony of the attorney. Vazquez v. Vazquez, 292 S.W.3d 80, 86 (Tex. App.—Houston [14th Dist.] 2007, no pet.). "An expert is not required to have personal knowledge of the matters about which he testifies." Arthur J. Gallagher & Co. v. Dieterich, 270 S.W.3d 695, 706 (Tex. App.— Dallas 2008, no pet.); see TEX. R. EVID. 602, 703. An expert may base an opinion on facts or data in the case that the expert has reviewed, been made aware of, or personally observed. TEX. R. EVID. 703. And the facts or data need not be admissible for the opinion to be admitted if experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject. Id.
A trial court should consider several factors in determining the amount of reasonable attorney's fees to award, including the time, labor, and skill required to properly perform the legal service, the novelty and difficulty of the questions involved, the customary fees charged in the local legal community for similar legal services, the amount involved and the results obtained, the nature and length of the professional relationship with the client, and the experience, reputation, and ability of the lawyer performing the services. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). But a trial court is not required to receive evidence on all of these factors. In re A.B.P., 291 S.W.3d 91, 98 (Tex. App.—Dallas 2009, no pet.). The court can also look at the entire record, the evidence presented on reasonableness, the common knowledge of the participants as lawyers and judges, the amount in controversy, and the relative success of the parties. Id.
Arguments of the Parties
Jeffrey argues that the trial court abused its discretion in awarding fees incurred by Mary, Alana, and Amanda's former counsel because the award for those fees is not based on legally admissible evidence. He contends that they incorrectly argued that the expert opinion of their present attorney was a "legally proper" means to introduce their former attorney's time records. Jeffrey argues that Mary, Alana, and Amanda's current attorney, testifying as an expert, could rely upon the time records of the prior counsel in giving her opinion, but "the expert[']s[] hearsay is not evidence of the fact relied upon[.]" He contends that the admissibility of the facts and data that the expert relies upon requires proper authentication, and "[p]roper authentication of" Mary, Alana, and Amanda's "first counsel's fees did not occur in this case." Jeffrey argues that, as a result, the legally admissible evidence does not support an award of attorney's fees and costs of $33,115.00. He contends that the award of attorney's fees should be reversed and, if there is an award of attorney's fees, the judgment for attorney's fees should be reduced to exclude fees charged by prior counsel. He also argues that any award of attorney's fees to Mary should only include fees that the record shows that she (rather than Alana or Amanda) incurred.
Jeffrey cites Bruni v. Bruni, 924 S.W.2d 366, 368 (Tex. 1996), for the proposition that, when an award of attorney's fees "is authorized by Chapter 9 of the Texas Family Code, when it is reviewed for an abuse of discretion on appeal, the award must be based upon legally admissible evidence." Bruni is distinguishable: the supreme court concluded, "Because the trial court premised its judgment on erroneous conclusions of law about the enforceability of the parties' agreement to provide child support past age eighteen, the trial court should be given an opportunity to reconsider the award of attorney's fees when it renders a new judgment." Id. at 368-69.
Mary, Alana, and Amanda argue that the trial court did not abuse its discretion when it granted Mary a judgment against Jeffrey for $33,115.00 for attorney's fees and costs and did not err when it overruled Jeffrey's motion to modify, correct, or reform the judgment, or motion for new trial. They argue that, even if the trial court erred in admitting the time records of their prior counsel, Jeffrey did not prove that the admission of the time records probably caused the rendition of an improper judgment and, as a result, if there was error, it was harmless. They contend that the expert opinion evidence that Mary, Alana, and Amanda presented at trial concerning the amount, reasonableness, and necessity of the attorney's fees supports the award of attorney's fees.
Analysis
We agree with Mary, Alana, and Amanda that error, if any, in admitting the time records of their prior counsel was harmless. Their current attorney, Reagan Vernon, testified that she was "familiar with the fair and reasonable and usual customary fees charged by Dallas attorneys in Dallas county[,]" that the "attorney's fees incurred by [her] client pertaining to this enforcement have been reasonable and necessary[,]" that they reflected her "usual and customary fees charged in this . . . matter." She testified that the "[a]ttorney's fees and costs incurred by my client attributable to this petition for enforcement and including [her] estimation for prepping for trial today and attending today's final trial is $31, 545."
When Vernon offered "a summary of the attorneys' fees that have been incurred in this case" as an exhibit, Jeffrey's attorney objected "to any evidence that is not from Ms. Vernon's law firm on the issue of attorney's fees" on the grounds that the records of the law firms that had previously represented Mary, Alana, and Amanda were hearsay and that Vernon had not been "designated as an expert in anybody else's attorney's fees." Vernon stated, "I'll prove up that I reviewed the records of Bailey and Galyen and Holly Monk's office and that those fees are reasonable and necessary and reflect the usual and customary fees in this matter." She also stated, "I can testify to that and—in addition to my own fees." The court overruled the objection. Vernon then testified that Mary has been "paying and hiring these attorneys" and Vernon had "reviewed that work and the drafting and the petitions and the things that" former counsel "has filed along with the other attorneys" and her "testimony here today is that that's reasonable and necessary and that such work was all on behalf of—of Mary."
Vernon then testified about her representation of Mary, Alana, and Amanda, including her qualification as an attorney licensed in Texas, the work that she had done on the case, and the attorney's fees incurred. She stated that, in her opinion, "the $31,545 in fees and costs have been both reasonable and necessary in representing my client in this matter and only exacerbated to the exten[t] that Mr. McCafferty wasn't responsive with motions and noncompliant with several orders."
Later, when Vernon submitted a separate "summary of [her] attorney's fees testimony as to the segregation" of fees among Mary, Alana, and Amanda, Vernon testified that she had "testified that as an expert, the fees of [the previous law firm] were reasonable[.]" She testified that she relied "on the documents in the file" that she reviewed that concerned "the work attorney's before [her] did," which includes "the billing statements." Jeffrey's attorney again objected that the "breakdown of time that precedes Ms. Vernon's being employed in this case" is hearsay. The court overruled the objection.
We agree with Mary, Alana, and Amanda that case authority supports the conclusion that error, if any, in admitting the time records from the prior counsel was harmless. In Dieterich, 270 S.W.3d at 706, the appellant objected to testimony by appellee Dieterich's counsel, Jenkins, "about the fees charged by Dieterich's prior attorney [a]s 'simply a bald conclusion without any factual basis' because Jenkins did not have personal knowledge about the former attorney's experience, ethics, morality, truthfulness, or billing habits." But this Court concluded that Jenkins testified as an expert on attorney's fees and an "expert is not required to have personal knowledge of the matters about which he testifies." Id. (citing Texas rules of evidence 602 and 703). We noted that an "expert on attorney's fees may testify that he reviewed an attorney's file and offer an opinion that the fees charged for that work were reasonable and necessary." Id. We noted that Jenkins opined that the former attorney's fees and their combined fees were reasonable and necessary. Id. We also stated that he testified that he reviewed the former attorney's file, his level of experience, work on the case, and his billing rate and hours expended and that he testified concerning his own representation of Dieterich, including his level of experience, fee arrangement, and work completed. Id. We concluded that this testimony is sufficient to support the jury's award of attorney's fees. Id.
Similarly, in Star Houston Inc. v. Kundak, 843 S.W.2d 294, 297-98 (Tex. App.—Houston [14th Dist.] 1992, no writ), the appellant argued that a written summary of attorney's fees was improperly admitted into evidence because it was hearsay and because of failure to lay a proper predicate. The court concluded that, assuming without deciding that the summary was inadmissible, the error was harmless because, in addition to offering the summary exhibit, the appellee's attorney testified on the issue of attorney's fees. Id. The court concluded that the "presence of this additional evidence" led the court to conclude that "the admission of the written summary was not calculated to cause and probably did not cause the rendition of an improper judgment." Id. at 297-98; see Williamson v. Tucker, 615 S.W.2d 881, 893 (Tex. App.—Dallas 1981, writ ref'd n.r.e.) (holding any error in admitting summary of business records of plaintiff's attorneys to show number of hours and amount of attorney's fees was harmless because parties had stipulated number of hours and resulting fees were reasonable and plaintiff's attorney testified to the number of hours worked).
Jeffrey argues—citing Lewis v. Southmore Savings Association, 480 S.W.2d 180, 187 (Tex. 1972)—that, although experts can rely upon hearsay in giving their opinion, "the experts' hearsay is not evidence of the fact relied upon, but only bears on the expert's opinion" and the "trial judge should acknowledge the limited purpose and observe it." See U.S. v. Sims, 514 F.2d 147, 149-50 (9th Cir. 1975) ("[T]he hearsay evidence is to be considered solely as a basis for the expert opinion, and not as substantive evidence."); McGuffin v. Terrell, 732 S.W.2d 425, 428 (Tex. App.—Fort Worth 1987, no writ) ("Opinion testimony does not establish material facts as a matter of law."). He then cites Huff v. Harrell, 941 S.W.2d 230, 240 (Tex. App.—Corpus Christi 1996, writ denied), for the proposition that, although an expert can offer an opinion after reviewing data and facts commonly relied upon by an expert, the admissibility of the actual data and facts requires proper authentication. Jeffrey then argues that proper authentication did not occur here. Yet the legal propositions that Jeffrey states do not affect our conclusion here that, even if the court erred in admitting the records of the prior attorneys, the error was harmless. See also Moore v. Polish Power, Inc., 720 S.W.2d 183, 192 (Tex. App.—Dallas 1986, writ ref'd n.r.e.) (quoting United States v. Williams, 447 F.2d 1285, 1290 (5th Cir. 1971) (en banc)) ("[W]hen the expert witness has consulted numerous sources, and uses that information, together with his own professional knowledge and experience, to arrive at his opinion, that opinion is regarded as evidence in its own right and not as hearsay in disguise.").
In addition, although Jeffrey argues that the trial court abused its discretion in awarding $33,115 to Mary instead of "only the fees incurred by Mary[,]" Vernon testified that Mary was "the one that has been paying and hiring these attorneys" and that "such work was all on behalf of—of Mary."
We resolve Jeffrey's first three issues against him.
SANCTIONS
In his fourth issue, Jeffrey argues that the trial court abused its discretion when it awarded $10,000 to Mary as a sanction against Jeffrey. Jeffrey contends that there is no evidence supporting the sanction, the sanction was against the great weight and preponderance of the evidence, and the amount of the sanction violates due process.
Background
Mary testified that Jeffrey had not fully complied with three court orders: the divorce decree, an interim order from 2013, or a receivership order from 2015. She testified that she filed the enforcement action after Jeffrey—among other things—"reduced the amount of money that he was paying [her] per month from 4,000 to 2,000." She also testified that he stopped complying with the interim order in June 2015 when he stopped paying a required monthly payment of $6,000 for her interest in the house. She also testified that, as a result of Jeffrey's noncompliance, the trial court appointed a receiver to sell the house and awarded Mary attorney's fees. Mary testified that Jeffrey did not comply with the receivership order, did not cooperate with the receiver, and did not comply with the court order for him to pay her attorney's fees. She also testified that Jeffrey appealed the receivership order and the appeal was not successful. In addition, Mary testified that Jeffrey had not complied with the divorce decree provisions requiring that he pay various expenses for their children while they were in college: fifty percent of their health insurance premiums, fifty percent of their room and board, and $500 per month for living expenses and support.
Mary testified that she believed that Jeffrey stopped paying the children's health insurance premiums in November 2011.
On cross examination, Jeffrey testified:
Q. You didn't sign the receiver's listing agreement, did you?
A. No.
Q. Okay.
A. I haven't seen it. Never saw it, never received it.
Q. You were ordered by this Court [o]n October 15th of 2015, to pay Ms. Vernon's attorney's fees, and you haven't done that; isn't that correct?
A. I don't recall being ordered to pay her attorney's fees.
[Attorney]: May I approach the witness?
THE COURT: You may.
Q. [ ] Do you recall ever having seen that order, sir?
A. No, I do not.
. . . .
Q. And is it also true that you didn't cooperate with the receiver regarding seeing the house?
A. I've never been asked to.
Q. So you have no objection to this Court allowing the receiver to sell your Houghes [sic] Lane property, correct?
A. Of course I have an object[ion] to that.
Q. Why?
A. Because it's my house and I should be selling it. I have it listed to be sold.
Q. But you defaulted on all your obligations under the decree [and] all of the interim orders.
A. That's nonsense.
. . . .
Q. . . . Well, you read the inspection report, didn't you?
A. No, I did not. I was never given an inspection report.
Q. You have never been given the leasing agreement from the receiver. You've never been given the orders of this Court. You have never been given the inspection report. What else haven't you been given.
. . . .
Q. [] You did not pay in full; isn't that correct?
A. Not yet.
Q. Well, you quit making the payments the Court ordered you to make.
A. No, I didn't.
Q. In June. You just testified you quit making the payments in June.
A. I was paying ahead. I had—I had overpaid her.
The court subsequently issued the order concerning the petition for enforcement, which states:
The Court finds that Jeffrey McCafferty should be sanctioned for the egregious conduct demonstrated by [Jeffrey] and [Jeffrey's] blatant disregard for Court's orders.
IT IS ORDERED that John Jeffrey McCafferty shall pay Mary M. McCafferty the sum of $10,000.00 in Court ordered sanctions on or before December 31, 2015 at 5:00 p.m. by delivering a certified check payable to Mary M. McCafferty to the offices of KoonsFuller, P.C., located at 1717 McKinney Avenue, Suite 1500, Dallas, Texas 75202. IT IS ORDERED that Mary M. McCafferty is granted judgment against John Jeffrey McCafferty for $10,000.00,
with such judgment bearing interest at six percent (6%) per year compounded annually from the date this order is signed, for which let execution issue.
The court's Findings of Fact and Conclusions of Law include the following findings:
Sanctions
1. Respondent intentionally and willfully violated three of the Court's Orders (Agreed Final Decree of Divorce, the Interim Order on Petition for Enforcement, and Order on Motion for Appointment of Receiver), filed a frivolous appeal, and refused to answer discovery requests.
2. John Jeffrey McCafferty's actions during the pendency of this case resulted in increased and an unnecessary waste of Petitioners' resources with regard to attorney's fees and costs.
3. The amount of sanctions adjudged and monetary judgment granted against Respondent was based upon his egregious, intentional, willful and persistent disregard of the Court's orders.
Additional findings describe how Jeffrey violated the three orders, including by his failure to make monthly payments to Mary, his mismanagement of the sale of the property, his refusal to communicate and cooperate with a court-ordered receiver, his "active hindrance" of the sale of the property, and his failure to pay support and living expenses of Alana and Amanda.
In addition, the conclusions of law state that "[t]he sanctions judgment is necessary to deter further misconduct and willful violations of Court Orders by [John Jeffrey McCafferty] with such judgment bearing interest at six percent per year compounded annually."
Standard of Review and Applicable Law
We review the imposition of sanctions for an abuse of discretion. Bennett v. Grant, No. 15-0338, 2017 WL 1553157, at *8 (Tex. Apr. 28, 2017). Although the order and findings of fact and conclusions of law do not explicitly state the legal basis for the sanctions, both the order and the findings and conclusions state that the Court sanctioned Jeffrey for egregiously disregarding the court's orders and the conclusion of law states that the sanction judgment was "necessary to deter further misconduct and willful violations of Court Orders." In their appellate briefs, Mary, Alana, and Amanda and Jeffrey recognize that the court ordered sanctions based on its inherent power.
Jeffrey concludes that the sanction award was not based on rule of civil procedure 13, chapter 10 of the civil practice and remedies code, or rule of civil procedure 215 and states: "The only other theory available to support an award of sanctions here is the Court's inherent power."
A trial judge has certain inherent power derived "from the very fact that the court has been created and charged by the constitution with certain duties and responsibilities." Dallas Cty. Constable Precinct 5 v. KingVision Pay-Per-View, Ltd., 219 S.W.3d 602, 610 (Tex. App.—Dallas 2007, no pet.) (quoting Travelers Indem. Co. of Conn. v. Mayfield, 923 S.W.2d 590, 594 (Tex. 1996) (orig. proceeding)). A court may call upon its inherent powers "to aid in the exercise of its jurisdiction, in the administration of justice, and in the preservation of its independence and integrity." Id. (quoting Travelers Indem., 923 S.W.2d at 594). The trial judge also has inherent power to sanction to the extent necessary to deter, alleviate, and counteract bad faith abuse of the judicial process, such as any significant interference with the court's administration of its core functions, including hearing evidence, deciding issues of fact raised by the pleadings, deciding questions of law, rendering final judgment, and enforcing its judgments. Cherry Petersen Landry Albert LLP v. Cruz, 443 S.W.3d 441, 451 (Tex. App.—Dallas 2014, pet. denied). For a court to invoke its inherent power to sanction, there must be evidence and findings that the alleged bad faith abuse significantly interfered with the court's legitimate exercise of one of its core powers[.]" Greiner v. Jameson, 865 S.W.2d 493, 499 (Tex. App.—Dallas 1993, writ denied). Due process limits a court's inherent power to sanction and the sanctions must be just. Id. Whether an imposition of sanctions is "just" is measured by two standards: first, the sanctions that the court imposes must relate directly to the abuse found and, second, the sanctions must not be excessive. TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991); IFC Credit Corp. v. Specialty Optical Sys., Inc., 252 S.W.3d 761, 773 (Tex. App.—Dallas 2008, pet. denied).
Jeffrey states that "[s]anctions absent particular, non-conclusory findings are reversible." But he cites Rudisell v. Paquette, 89 S.W.3d 233, 237 (Tex. App.—Corpus Christi 2002, no pet.), which concerns the requirements under rule of civil procedure 13 for the sanctions order under that rule to "state with particularity good cause for finding" that sanctions should be imposed. And he cites Rivera v. Countrywide Home Loans, Inc., 262 S.W.3d 834, 842 (Tex. App.—Dallas 2008, no pet.), which stated the requirement that, for sanctions under civil practice and remedies code chapter 10, "a trial judge must specifically detail the sanctionable conduct in its order and explain the basis for the sanction imposed." The requirements under rule 13 and chapter 10 do not apply here where the court sanctioned Jeffrey through its inherent power. The case Jeffrey cites concerning sanctions by a court's inherent power, Greiner, 865 S.W.2d at 499, does not impose a requirement for "particular, non-conclusory findings" but states that "for inherent power to apply" there must be "evidence and findings" as noted above.
Arguments of the Parties
Jeffrey argues that the trial court abused its discretion in imposing $10,000 in sanctions against him because "[t]he grounds listed in the sanctions section of the Findings of Fact and Conclusions of Law are conclusory, non-particular findings." Jeffrey contends that there is a "sparsity of evidence to support" the first finding of fact stating that he violated orders intentionally and willfully, filed a frivolous appeal, and refused to answer discovery requests. He argues that he was in compliance with payments to Mary "for almost two years after this proceeding was originally filed[,]" that there is no evidence in the record of his filing a frivolous appeal, and no evidence in the record that he refused to answer "appropriate" discovery requests. Jeffrey also argues that there is no evidence to support the second finding concerning "an unnecessary waste" of Mary, Alana, and Amanda's resources and contends that the "law regarding sanctions" allows litigants "to participate in litigation[.]" With respect to the third finding of fact that the award of sanctions was based upon "his egregious, intentional, willful, and persistent disregard of the Court's orders[,]" Jeffrey argues that there is an "absence of any conduct of [his] which is 'egregious'." He states that he did act intentionally and willfully in defending his claims and contends that "[p]erhaps, because of that, he prevailed on some of the claims."
Jeffrey contends that the only evidence in the record that concerns his appeal is this Court's memorandum opinion in which we denied his petition for writ of mandamus, concluding that he had not demonstrated that his available interlocutory appeal of an order appointing a receiver would not provide an adequate remedy. See In re McCafferty, No. 05-15-01345-CV, 2015 WL 6751078, at *1-2 (Tex. App.—Dallas Nov. 5, 2015, no pet.) (mem. op.). Jeffrey argues—without further explanation—that "[i]f this is the basis for an award of sanctions, then the trial court failed to impose the sanction on the offending party." He likewise argues that "there is no evidence in the record that Appellant refused to answer appropriate discovery requests" and states—without further explanation—that, "if that is the basis for an award of sanctions, the Court should make inquiry as to who was the offending party."
Mary, Alana, and Amanda argue that the trial court did not abuse its direction in imposing the $10,000 sanction against Jeffrey. They contend that the sanction fulfills the first prong of TransAmerican test because the sanction is directed at the offender, Jeffrey, and that the sanction fulfills the second TransAmerican prong because it is not excessive. Mary, Alana, and Amanda argue that, although Jeffrey solely focuses on the trial court's findings (which they contend are sufficient to support the trial court's sanctions), he ignores evidence presented at trial including his own admissions of his "blatant disregard" of the court's orders. They contend that the record is "clear" that Jeffrey "had no reservations about violating multiple court orders, and did so wantonly, with little regard for the Trial Court's authority."
Analysis
Based on the record, we agree with Mary, Alana, and Amanda that the trial court did not abuse its discretion in imposing a $10,000 sanction on Jeffrey. The record reveals that Jeffrey did not comply with the divorce decree, interim order, or receivership order. He stopped paying required monthly payments to Mary and did not pay required expenses for the children. He did not cooperate with the receiver. When asked about his failure to comply with various court orders, he replied that he had either not seen the order or related documents, he was not aware of his obligations under court orders, and it was "nonsense" that he defaulted on his obligations under the divorce decree and the interim orders. With respect to the amount of the sanction, as Mary, Alana, and Amanda note, the $10,000 amount is equal to the monthly amount that the interim order required Jeffrey to pay to Mary for certain months.
As Mary, Alana, and Amanda state, this case is analogous to Cantu v. Guerra & Moore, Ltd., 328 S.W.3d 1, 10 (Tex. App.—San Antonio 2009, no pet.). Cantu involved a dispute between attorneys who had competing claims to attorney's fees. Id. at 3. The trial court sanctioned attorney Cantu in the amount of $10,000 in favor of law firm Guerra and $10,000 in favor of law firm RG & B. Id. at 10. Guerra and RG & B moved for monetary sanctions based on Cantu's "repeated violations of the court's rulings on a motion in limine." Id. Later, RG & B moved for death penalty sanctions based on Cantu's conduct, and then both Guerra and RG & B repeated their request for sanctions. The court ultimately granted the motions for sanctions, finding "'a repeated course of conduct extremely egregious in its nature, apparently designed to occasion a mistrial' and actions 'intentionally disrespectful and [which] appear to be in bad faith.'" Id. The trial court concluded that—despite repeatedly admonishing Cantu—"'no amount of caution to the attorneys for [Cantu], or Mark Cantu himself, who has been acting as co-counsel, has had any effect.'" Id. The court of appeals concluded that the trial court did not abuse its discretion in sanctioning Cantu, noting both his repeated violations of the limine order and other trial court rulings, and the trial court's repeated admonishments of Cantu. Id.
Jeffrey argues that Cantu supports his position that the amount of the sanction imposed on him violates due process. He bases his argument on a comparison of the ratio of the amount of the sanction to the amount of the judgment in Cantu, where the ratio was less than one percent, with this case where he argues the ratio is nearly five percent. Id. But as Mary, Alana, and Amanda recognize, Cantu does not discuss or impose a test for the due process of sanctions based on such a ratio, and Jeffrey does not direct us to any authority that establishes this ratio test.
In addition, Jeffrey states, citing TransAmerican, 811 S.W.2d at 917, that "[c]ourts are required to consider less stringent sanctions and weigh whether such lesser sanctions would serve to promote compliance." He also quotes GTE Communications Systems Corp. v. Tanner, 856 S.W.2d 725, 729 (Tex. 1993): "Case determinative sanctions may be imposed in the first instance only in exceptional cases when they are clearly justified and it is fully apparent that no lesser sanctions would promote compliance with the rules." The $10,000 monetary sanction imposed here is not a "[c]ase determinative sanction." Instead, "[l]esser sanctions can include monetary penalties[.]" Kim v. Hendrickson, No. 05-13-01024-CV, 2015 WL 3898219, at *5 (Tex. App.—Dallas June 25, 2015, pet. denied) (mem. op.).
Also, based on the record, we disagree with Jeffrey's position that his "persistent disregard of the Court's orders" was not sanctionable because he was "legally challeng[ing] a Court order" and because the court's order awarded Mary fees in excess of what she incurred and made her whole. Jeffrey cites to no authority for these arguments. We conclude that Jeffrey's "persistent disregard of the Court's orders" interfered with the court's administration of its core functions and the trial court had inherent power to sanction this conduct to deter, alleviate, and counteract this bad faith abuse of the judicial process. See Cherry Petersen Landry Albert LLP, 443 S.W.3d at 451; Kutch v. Del Mar College, 831 S.W.2d 506, 510 (Tex. App.—Corpus Christi 1992, no writ) (concluding court's inherent "power includes the power to sanction appropriately for failure to comply with a valid court order incident to one of the core functions of the judiciary").
We overrule Jeffrey's fourth issue.
OFFSET
In his fifth issue, Jeffrey argues that the trial court abused its discretion when it did not award him an offset of $4,485, which represents the amount Jeffrey paid for five months of Mary's health insurance premiums, against the judgment rendered for Mary for her interest in the marital residence. He argues that the trial court substantially changed the terms of the divorce decree—which it did not have jurisdiction to do—by failing to credit this amount to him against the judgment for Mary.
Mary, Alana, and Amanda argue that the court did not abuse its discretion when it denied Jeffrey's request for an offset. They contend that Jeffrey waived the affirmative defense of the offset by failing to plead for this specific offset of the payments for Mary's health insurance premiums. Alternatively, they argue that Jeffrey did not carry his burden to prove that he was entitled to the offset.
"[T]he right of offset is an affirmative defense." SAS & Assocs., Inc. v. Home Mktg. Servicing, Inc., 168 S.W.3d 296, 301 (Tex. App.—Dallas 2005, pet. denied). "The burden of pleading offset and of proving facts necessary to support it are on the party making the assertion." Id. Generally, an affirmative defense must be pled in a responsive pleading or it is waived. Tenet Health Sys. Hosps. Dallas, Inc. v. N. Tex. Hosp. Physicians Grp., P.A., 438 S.W.3d 190, 204 (Tex. App.—Dallas 2014, no pet.); see TEX. R. CIV. P. 94; Man Engines & Components, Inc. v. Shows, 434 S.W.3d 132, 136 (Tex. 2014) ("Rule 94 makes clear that affirmative defenses must be properly raised in pretrial pleadings[.]").
Jeffrey has not identified where he pleaded the affirmative defense of offset for the amounts he claims he paid for Mary's health insurance premiums. The divorce decree provides that Jeffrey would be reimbursed for "[h]ealth insurance payments paid by" Jeffrey for Mary "after divorce" from the money due Mary for her community property interest after sale of their residence. And in Jeffrey's amended original answer and counter-petition to Mary, Alana, and Amanda's petition for enforcement of property division and petition for breach of contract, he "affirmatively pleads that a portion of the relief requested by Petitioner's is barred by the doctrine of offset." But the relief requested by Mary, Alana, and Amanda in the petition for enforcement does not concern costs for Mary's health insurance premiums, the amount Jeffrey must pay to Mary upon sale of their marital residence, or any offset to that payment that relates to costs for her health insurance. While an unpleaded affirmative defense "may be deemed tried by consent when evidence on the issue is developed under circumstances indicating both parties understood the issue was in the case, and the other party fails to make an appropriate complaint," Tenet, 438 S.W.3d at 204 (quoting Frazier v. Havens, 102 S.W.3d 406, 411 (Tex. App.—Houston [14th Dist.] 2003, no pet.)), no trial by consent occurred here. Although Jeffrey's attorney asked Mary and Jeffrey about the number of months that Jeffrey paid Mary's health insurance premiums after the divorce and the amount of the payments, the evidence was not "developed under circumstances indicating" that Mary, Alana, and Amanda "understood the issue was in the case[.]" Id. (quoting Frazier, 102 S.W.3d at 411). In addition, although Jeffery referred in his motion to modify, correct, or reform judgment or, alternatively, motion for new trial to the evidence from Jeffrey's and Mary's testimony that Jeffrey "paid health insurance premiums for" Mary "for five months after they were divorced" in an amount that "equaled (at least) $5,385[.]32[,]" the record does not reflect that Jeffrey included his affirmative defense of offset for these premium payments in a pretrial pleading. Man Engines, 434 S.W.3d at 136.
Rather, the petition for enforcement concerned Jeffrey's failure to list the marital residence for sale, his failure to pay Mary $4,000 per month, his failure to pay 50% of the children's college room and board and to pay the children $500 per month, and his failure to transfer title to an automobile to Amanda. Mary, Alana, and Amanda later filed amended petitions for enforcement of property division and petition for breach of contract and for enforcement of interim order on petition for enforcement. These amended petitions did not concern the issue of payments for Mary's health insurance premiums.
We overrule Jeffrey's fifth issue.
SUPPORT AND LIVING EXPENSES
In his sixth issue, Jeffrey argues that the trial court abused its discretion by awarding Alana a judgment of $7,500 against Jeffrey for unpaid support and living expenses. He argues that Alana did not "offer the requisite evidence upon which such an award could be based." Jeffrey contends that Alana did not prove her performance of conditions precedent, which were essential elements of her breach of contract case.
"A party seeking to recover under a contract bears the burden of proving that all conditions precedent have been satisfied." Assoc. Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 283 (Tex. 1998). Jeffrey acknowledges that, because he challenges the legal sufficiency of the evidence supporting the judgment for Alana, he has the burden to demonstrate that there is no evidence to support the adverse decision. Thornton v. Dobbs, 355 S.W.3d 312, 316 (Tex. App.—Dallas 2011, no pet.).
The divorce decree provides:
Additionally, JOHN JEFFREY McCAFFERTY and MARY MICHELINE McCAFFERTY hereby agree to pay 50 % each for any room and board of the children, not covered by the Texas Tomorrow Fund, while attending undergraduate college full time from September through May[.] IT IS AGREED the cost for room and board shall not exceed on-campus dormitory room and board cost[.]
. . . .
Additionally, JOHN JEFFREY McCAFFERTY hereby agrees to pay $500 per month to each child,[] while attending undergraduate college full time, except during the summer session[.]
The order on the petition for enforcement from which Jeffrey appeals states:
IT IS ORDERED that Alana McCafferty is granted judgment against John Jeffrey McCafferty for $7,500.00 for unpaid support and living expenses, pursuant to the parties' July 17, 2009 Agreed Final Decree of Divorce, with such judgment bearing interest at six percent (6%) per year compounded annually from the date this order is signed, for which let execution issue.
Jeffrey argues that there is no evidence that Alana satisfied the two conditions precedent required for him to contribute to the costs of her room and board: that the cost was not covered by the Texas Tomorrow Fund and the cost did not exceed the cost of on-campus dormitory room and board. But, as Mary, Alana, and Amanda state, these two conditions apply to the portion of the decree governing Jeffrey's obligation to pay fifty percent of the costs for Alana's room and board, not $500 to her as a monthly allowance for "support and living expenses" as ordered by the order on the petition for enforcement. The only condition precedent in the decree that applies to the $500 monthly allowance is that Alana be "attending undergraduate college full time."
Jeffrey argues that Alana's transcript reflects that, during two semesters of her undergraduate years at the University of Arkansas, she was not "attending undergraduate college full time." He notes Alana's testimony that a student must take twelve class hours each semester to be "a full-time student at the University of Arkansas[.]" He contends that, because Alana took one class online at Dallas County Community College in the fall of 2010 (so that she took nine hours at the University of Arkansas that semester), she was not attending undergraduate college full time during that semester. Likewise, Jeffrey argues that she was also not attending undergraduate college full time during the spring of 2013 because Alana's transcript reflects that she earned "0" hours that semester, even though she was taking four courses that semester for thirteen hours. Alana testified that portion of the transcript was not accurate.
Mary, Alana, and Amanda argue that Alana met her burden of proof in satisfying all conditions precedent to trigger Jeffrey's obligation to pay her support and living expenses as set forth in the decree. They argue that, as a result, it was not an abuse of discretion for the trial court to award Alana a judgment of $7,500 for unpaid support and living expenses.
We conclude that Alana presented sufficient evidence that she satisfied the condition precedent that she was "attending undergraduate college full time[.]" Alana testified that she was a full-time college student while she attended the University of Arkansas from August 2009 until May 2013. The divorce decree does not require that she had to attend undergraduate college full time at one institution, nor does it state that she could not take some courses to meet the full-time requirement from a community college. In addition, Alana's college transcript in the record reflects that she was enrolled in four courses for thirteen hours in spring 2013, the transcript was issued by the registrar on April 17, 2013, and it did not reflect any grades for Alana for those four courses.
We conclude that the trial court did not abuse its discretion in awarding Alana a judgment of $7,500 for support and living expenses. We overrule Jeffrey's sixth issue.
CONCLUSION
We overrule Jeffrey's six issues and affirm the trial court's judgment.
/Elizabeth Lang-Miers/
ELIZABETH LANG-MIERS
JUSTICE 160587F.P05
JUDGMENT
On Appeal from the 254th Judicial District Court, Dallas County, Texas
Trial Court Cause No. DF-08-05932.
Opinion delivered by Justice Lang-Miers, Justices Evans and Schenck participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees MARY M. MCCAFFERTY, ALANA MCCAFFERTY, AND AMANDA MCCAFFERTY recover the full amount of the trial court's judgment and their costs of this appeal from appellant JOHN JEFFREY MCCAFFERTY and from any supersedeas bond or cash deposit in lieu of supersedeas bond. After the judgment and all costs have been paid, the clerk of the district court is directed to release the balance, if any, of any cash deposit in lieu of supersedeas bond to the person who made the deposit. Judgment entered July 24, 2017.