Opinion filed February 12, 2015




                                        In The


        Eleventh Court of Appeals
                                     ___________

                                  No. 11-13-00133-CV
                                     ___________

                        J.C. PACE, LTD., Appellant
                                    V.
                        ODILIA SANCHEZ, Appellee

                    On Appeal from the County Court at Law
                             Nolan County, Texas
                         Trial Court Cause No. 2014

                     MEMORANDUM OPINION
      This is an appeal from an order imposing sanctions against Appellant, J.C.
Pace, LTD., and its attorney, Roy Longacre. Appellant filed a motion to recuse the
Honorable David Hall, judge of the County Court at Law of Nolan County, in the
underlying lawsuit. Appellee, Odilia Sanchez, responded by filing a motion for
sanctions under Rule 13 of the Texas Rules of Civil Procedure and Chapters 9 and
10 of the Texas Civil Practice and Remedies Code alleging that the motion to
recuse Judge Hall was groundless. In a single written order, the trial court denied
the recusal motion and awarded sanctions against Appellant and Longacre. The
parties subsequently settled all issues in the underlying case other than the award
of sanctions. Appellant challenges the sanctions award in four issues. We reverse
and render in part and affirm in part.
                                        Background Facts
       Appellee filed the underlying personal injury action against Pace and Family
Dollar Stores of Texas, LLC. 1 Attorney Burt L. Burnett represented Appellee both
in the trial court and in this appeal. Judge Hall had recently taken office at the time
Appellant filed its motion to recuse him. Appellant based the motion to recuse on
the allegation that Judge Hall’s “impartiality might reasonably be questioned due
to personal bias or prejudice concerning one of the parties to this litigation.”
Specifically, Appellant challenged the relationship between Burnett and Judge
Hall. Appellant cited the following five allegations in support of its motion:
(1) Judge Hall acted as a manager and registered agent of Multi-County Coalition
of Texas while Burnett’s parents, Sheila and Dale Burnett, were initial directors on
the board; (2) Judge Hall acted as manager, organizer, and registered agent for
Multi-County Coalition LLC while Sheila Burnett served as the manager;
(3) Burnett paid $15,000 to Lance Hall, Judge Hall’s father and former law partner,
in exchange for one-half interest in a breeding bull on April 30, 2011; (4) Judge
Hall acted as a director on the board of Aerial Vision Technology Inc. while
Burnett served as president, director on the board, and registered agent; and
(5) Judge Hall is related to Burnett.
       The trial court heard testimony at two recusal hearings conducted on
September 22, 2011, and October 20, 2011. 2 Lance Hall testified that, to the best


       1
        Appellee dismissed Family Dollar Stores as a party based upon a settlement agreement.
Accordingly, Family Dollar Stores is not a party to this appeal.
       2
         Senior District Judge Robert H. Moore III, sitting by assignment, presided over the recusal and
sanctions hearings.

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of his knowledge, the common ancestor between Judge Hall and Burnett is a great,
great, great grandparent. Lance Hall also testified that the Multi-County Coalition
of Texas and, subsequently, the Multi-County Coalition LLC were organizations
formed to oppose the establishment of a coal-burning power plant in the area.
Lance Hall stated that there is no ongoing relationship between Judge Hall and
Lance Hall’s practice, including any relationship between Judge Hall and any of
his prior clients. Lance Hall also said that Judge Hall did not have an interest in
Aerial Vision Technology after 2010. Burnett testified that he no had personal
knowledge of any familial relationship with Judge Hall. He also testified that he
never paid Lance Hall for a breeding bull. Burnett also testified that Aerial Vision
Technology is no longer a going concern.
       After hearing testimony from Lance Hall and Burnett, the trial court found
that Judge Hall was the registered agent of the Multi-County Coalition of Texas at
the time it was formed. The trial court also found that Judge Hall acted as the
manager, organizer, and registered agent for Multi-County Coalition LLC. The
trial court also found that Judge Hall had a relationship with Aerial Vision
Technology but that it ended in 2009. Conversely, the trial court determined that
there was no evidence supporting Appellant’s contention that Burnett purchased a
one-half interest in a bull owned by Lance Hall. Finally, the trial court found that
there was not a close enough familial relationship between Judge Hall and Burnett
that would reasonably question Judge Hall’s impartiality. The trial court denied
the motion to recuse Judge Hall, finding no reasonable basis in the allegations to
reasonably question Judge Hall’s impartiality. The trial court additionally awarded
sanctions against Appellant and Longacre.3



       3
       The order awarding sanctions referenced the amounts of $1,000 and $500. However, the final
judgment ordered sanctions of $500.

                                               3
                                        Analysis
        Appellant challenges the sanctions order in four issues. The first issue
concerns the sanctions awarded under Rule 13.           The second and third issues
address the sanctions awarded under Chapter 9 of the Civil Practices and Remedies
Code.     In its fourth issue, Appellant challenges the sanctions awarded under
Chapter 10 of the Civil Practices and Remedies Code.
        We review the imposition of sanctions under an abuse of discretion standard.
Nath v. Tex. Children’s Hosp., 446 S.W.3d 355, 373 (Tex. 2014); Low v. Henry,
221 S.W.3d 609, 614 (Tex. 2007). 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 was arbitrary or unreasonable. Low, 221 S.W.3d at
614; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.
1985). This requires an examination of the entire record. Loeffler v. Lytle Ind.
Sch. Dist., 211 S.W.3d 331, 347 (Tex. App.—San Antonio 2006, pet. denied).
Any conflicting evidence is viewed in the light most favorable to the trial court’s
ruling, and all reasonable inferences in favor of that ruling will be drawn. Id. at
348. A trial court abuses its discretion if it fails to properly interpret and apply the
law. In re Dep’t of Family & Protective Servs., 273 S.W.3d 637, 642 (Tex. 2009)
(orig. proceeding).
        Appellant asserts in its third issue that sanctions under Chapter 9 of the Civil
Practices and Remedies Code are not available if sanctions under Chapter 10 or
Rule 13 are available. We agree. Chapter 9 of the Texas Civil Practice and
Remedies Code only applies to proceedings in which neither Rule 13 nor Chapter
10 applies. Nath, 446 S.W.3d at 362 n.6; Low, 221 S.W.3d at 614; see TEX. CIV.
PRAC. & REM. CODE ANN. § 9.012(h) (West 2002). As noted by the supreme court
in Nath, “Chapter 9 has largely been subsumed by subsequent revisions to the


                                            4
code.” 446 S.W.3d at 362 n.6. We sustain Appellant’s third issue. We need not
consider Appellant’s second issue in light of our ruling on the third issue.
      In its first issue, Appellant contends that sanctions were not warranted under
Rule 13 because there was no evidence of bad faith or harassment in connection
with the filing of the motion to recuse. Rule 13 authorizes a trial court to impose
sanctions against an attorney, a represented party, or both, who file a groundless
pleading brought in bad faith or brought for the purpose of harassment. TEX. R.
CIV. P. 13. “The imposition of Rule 13 sanctions involves the satisfaction of a
two-part test. First, the party moving for sanctions must demonstrate that the
opposing party’s filings are groundless, and second, it must be shown that the
pleadings were filed either in bad faith or for the purposes of harassment.” Estate
of Davis v. Cook, 9 S.W.3d 288, 297 (Tex. App.—San Antonio 1999, no pet.)
(citing GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993)).
Rule 13 directs a trial court to presume that a pleading was filed in good faith.
GTE, 856 S.W.2d at 731. “Thus, the burden is on the party moving for sanctions
to overcome this presumption.” Id. A groundless pleading is not sanctionable
unless it also was brought in bad faith or for the purpose of harassment. Id.
      “Bad faith” is not simply bad judgment or negligence but is, rather, the
conscious doing of wrong for a dishonest, discriminatory, or malicious purpose.
Armstrong v. Collin Cnty. Bail Bond Bd., 233 S.W.3d 57, 63 (Tex. App.—Dallas
2007, no pet.). Improper motive is an essential element of bad faith. Robson v.
Gilbreath, 267 S.W.3d 401, 407 (Tex. App.—Austin 2008, pet. denied). The party
moving for sanctions must prove the pleading party’s subjective state of mind.
Thielemann v. Kethan, 371 S.W.3d 286, 294 (Tex. App.—Houston [1st Dist.]
2012, pet. denied). Bad faith does not exist when a party merely exercises bad
judgment or is negligent. Id. In deciding whether the plaintiff filed a pleading in
bad faith or for the purpose of harassment, the trial court must measure the
                                          5
plaintiff’s conduct and examine the facts available to the plaintiff at the time the
relevant pleading was signed. Tex.-Ohio Gas, Inc. v. Mecom, 28 S.W.3d 129, 139
(Tex. App.—Texarkana 2000, no pet.). A party’s pleading alone cannot establish
that it brought the case in bad faith or for the purpose of harassment. Id.
      We conclude that there is no evidence that either Appellant or Longacre
filed the motion for a dishonest, discriminatory, or malicious purpose or for the
purpose of harassment. While the trial court determined that the grounds alleged
for recusal were groundless, Rule 13 does not permit sanctions on the issue of
groundlessness alone. Nath, 446 S.W.3d at 362–63. As noted previously, Rule 13
requires a presumption that pleadings are filed in good faith. The record does not
demonstrate that an improper motive existed at the time the motion to recuse was
filed; thus, Appellee failed to overcome the presumption of good faith. In the
absence of evidence to support a finding of bad faith or harassment, the trial court
abused its discretion by awarding sanctions pursuant to Rule 13. Accordingly, we
sustain Appellant’s first issue.
      In its fourth issue, Appellant asserts that the sanctions order does not comply
with the requirements of TEX. CIV. PRAC. & REM. CODE ANN. § 10.005 (West
2002). Chapter 10 of the Texas Civil Practice and Remedies Code requires a
pleading’s signatory to certify that he or she conducted a reasonable inquiry into
the allegations and concluded that each allegation or other factual contention in the
pleading has or is likely to have evidentiary support. Low, 221 S.W.3d at 612.
Section 10.005 provides that “[a] court shall describe in an order imposing a
sanction under this chapter the conduct the court has determined violated Section
10.001 and explain the basis for the sanction imposed.” The use of the word
“shall” in the statute indicates that the requirement for particularity in the sanction
order is mandatory. Univ. of Tex. at Arlington v. Bishop, 997 S.W.2d 350, 355
(Tex. App.—Fort Worth 1999, pet. denied).
                                          6
      Appellant contends that the order imposing sanctions does not comply with
Section 10.005 because it does not explain the trial court’s basis for issuing
sanctions in the amount of either $1,000 or $500. We agree. The trial court
entered an “Order Denying Recusal and Awarding Sanctions” that provided as
follows:
             On September 22, 2011 and October 20, 2011, the parties
      appeared through counsel for an evidentiary hearing upon Defendants’
      Motion To Recuse Judge David Hall. After reviewing the pleadings,
      hearing the evidence and hearing arguments of counsel, the Court
      finds the fol1owing:
                  (1) Burt Burnett and Judge Hall are not second
            cousins or otherwise related to the extent which requires
            recusal pursuant to Tex. Rules of Civ. Proc. 18b;
                   (2) Burt Burnett did not purchase a one[-]half
            interest in a bull owned by Lance Hall;
                   (3) No evidence was presented which indicates
            that Judge David Hall’s impartiality might reasonably be
            questioned pursuant to TRCP 186 (2) (a), (e), Texas
            Constitution Art. V§ll, and Texas Code of Judicial Courts
            4(A)(l), 4 (D)(1);
                   (4) A reasonable question of Judge hall’s [sic]
            impartiality in cases involving Burt Burnett does not
            exist;
                   (5) The Defendants’ filing of their Motions To
            Recuse Judge David Hall were groundless and that
            defense counsel, Roy Longacre, failed to make a
            reasonable inquiry before making the allegations
            contained in the recusal motions which he filed on behalf
            of the Defendants. Pursuant to T.R.C.P. 13, C.P.R.C.
            § 9.011[,] § 9.012, § 10.001, § 10.002 and § 10.004, Roy
            Longacre and his clients in these causes shall be
            sanctioned $1,000 for the damages caused by such
            failures.
            Therefore, the Defendants’ Motions To Recuse Judge David
      Hall are denied and Roy Longacre and his clients are ordered to pay

                                        7
       The Burnett Law Firm sanctions in the amount of $1,000 4 within
       fifteen (15) days of the entry of this order.
              All further relief requested is denied.

The order imposing sanctions does not explain the basis upon which the trial court
calculated the monetary sanction that it imposed. Furthermore, both the caption of
the trial court’s order and the reporter’s record from the hearings indicate that
Longacre filed motions to recuse in the underlying proceeding (Trial Court Cause
No. 2014) and in another proceeding styled Albert Rivera and wife, Patricia
Rivera v. Joseph Xavi and GEICO General Insurance Company, Trial Court Cause
No. 2092. None of the parties in Trial Court Cause No. 2092 are parties to this
appeal. Accordingly, the trial court’s order imposes sanctions against multiple
parties, at least one of which is not a party to this appeal. In the absence of a
provision setting out the conduct justifying sanctions solely attributable to
Appellant or Longacre’s representation of Appellant, the sanctions order does not
comply with Section 10.005. Accordingly, we sustain Appellant’s fourth issue.
                                   This Court’s Ruling
       We reverse the trial court’s sanctions award and render judgment that
Appellee take nothing on her sanctions claim. We affirm the remainder of the trial
court’s judgment.




February 12, 2015                                        JOHN M. BAILEY
Panel consists of: Wright, C.J.,                         JUSTICE
Willson, J., and Bailey, J.




       4
        Two lines were drawn through the typewritten amount of $1,000, and the sum of $500 was
handwritten above it along with the judge’s initials and the date.
                                              8
