Research and Resources

Significant Texas mediation case law

Enforcement of a MSA regarding divorce decree / child custody

Beyers v. Roberts, 199 S.W.3d 354 (Tex. App. 2006)

Enforcing a child custody order based on a mediated settlement agreement that did not designate a conservator who could decide the primary residence of the child as required by state statute governing parenting plans (Tex. Fam. Code Ann. 153.133(a)(1)), because the mediated settlement agreement was made enforceable under a more general statute (Tex. Fam. Code 153.0071(e)), which makes mediated settlement agreements enforceable if they include in prominent type that they are not revocable and the agreement is signed by each party and the party’s attorney (if present); and further holding that if the mediated settlement agreement complies with this provision, the judge is not required to conduct a hearing to determine if the agreement is in the child’s best interest

Child v. Leverton, 210 S.W.3d 694 (Tex. App. 2006)

Affirming trial judge’s modification of mediated court decree relating to the residency of the children based on scant evidence of a material change (mother would have more difficulty obtaining degree, would earn less and child had become more stable in his environment) focusing on what was in the best interests of the child. Quote from the Dissent: “[Noting strong public policy favoring mediation of these issues] allowing spouse to modify the decree without requiring proof of a material and substantial change in circumstance is counter to this policy”

Davis v. Davis, 2014 Tex. App. LEXIS 2591, 2014 WL 890899 (Tex. App. Houston 1st Dist. Mar. 6, 2014)

(1) A finding against the husband in a divorce proceeding was proper because his contention that the trial court erred in enforcing the parties’ mediated settlement agreement (MSA) was without merit. Given the husband’s failure to challenge the MSA or to claim fraudulent inducement during the nearly six months between the wife’s testimony and the filing of the motion to set aside the MSA, the husband waived that defense under Tex. R. App. P. 33.1(a); (2) Based on the wife’s testimony about her good faith belief that her marriage to her first husband had no legal effect and that her marriage to the current husband was valid, the trial court made an implied finding that she acted in good faith and was a putative spouse. That implied finding was supported by the evidence and supported the trial court’s judgment.

Eng’r v. Eng’r 187 S.W.3d 625 (Tex. App. 2006)

Reversing a trial court decision to enter a divorce decree and property settlement that differed from the mediated settlement agreement. Quote from the Court: “[A] court may either enter a property division agreement in its entirety or decline to enter it at all, but has no discretion to change such an agreement before entering it.

Enforcement of a MSA absent a party signature

Breceda v. Whi, 187 S.W.3d 148 (Tex. App. 2006)

Finding that a mediated settlement signed by one landlord and the attorney for the second landlord was summarily enforceable against both landlords, despite the missing signature and despite a claim that there was not a certified interpreter present

Herring v. Heron Lakes Estates Owners Ass’n, 2011 Tex. App. LEXIS 5, 2011 WL 2739517 (Tex. App. Houston 14th Dist. Jan. 4, 2011)

The homeowners allegedly were installing an unapproved red tile roof and a wrought iron fence among other things. After the association sought to obtain injunctive relief, the homeowners brought a counterclaim for a declaration that they were not bound by the CCRs. A settlement agreement hearing was held under Tex. R. Civ. P. 11; the parties allegedly agreed that the homeowners would ratify the CCRs when a settlement was reached. The homeowners refused to ratify the CCRs, and the association brought a breach of contract claim on which it was awarded partial summary judgment. On appeal, the court affirmed. While the homeowners claimed that no contract was formed at the settlement agreement hearing, the use of the phrase “when we reach a settlement agreement” only expressed a duration of time rather than a condition precedent to the formation of a contract. Because the association prevailed on its breach of contract claim, it was entitled to recover attorney’s fees under Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Such fees were not waived because the settlement agreement did not expressly preclude any statutory claim to an award of attorney’s fees under § 38.001.

Strad Energy Servs. United States v. Bernal, 2016 Tex. App. LEXIS 11539, 2016 WL 6242839 (Tex. App. San Antonio Oct. 26, 2016)

(1) The evidence did not conclusively establish that appellee’s attorney had apparent authority to settle appellee’s claim against appellants arising from an automobile accident because the only actions or conduct appellants’ attorney referenced in his testimony were actions taken by appellee’s attorney, not by appellee, and because although appellants’ attorney assumed appellee’s attorney had authority simply based on appellee’s attorney being retained to represent appellee, the mere employment of counsel did not clothe counsel with authority to settle the cause without the client’s specific consent; (2) Given the allegations in the pleadings, the trial court had submitted the controlling issue to the jury and had followed guiding rules and principles in including an instruction on the disputed fact regarding appellee’s attorney’s authority.

Nolana Open MRI Ctr., Inc. v. Pechero, 2015 Tex. App. LEXIS 1352 (Tex. App. Corpus Christi Feb. 12, 2015)

(1) Counsel for appellant lacked standing to bring the appeal because while the appellate court generally presumed that an attorney was acting with authority, in this case the presumption that counsel had the authority to represent appellant on appeal had been rebutted by the trial court’s multiple findings of fact and conclusions of law, which were supported by the record.

Enforcement of a MSA that conflicts with a statute provision or public policy

Jistel v. Tiffany Trail Owners Ass’n, Inc., 215 S.W.3d 474 (Tex. App. 2006)

Enforcing a judgment entered pursuant to a mediated settlement agreement between a condominium unit owner and the condominium owners association, despite a property code provision stating that obligations under the property code could not be waived or varied by agreement

Seligman-Hargis v. Hargis, 186 S.W.3d 582 (Tex. App. 2006)

Finding that the trial judge lacked subject matter jurisdiction to enter a judgment based on a mediated settlement agreement relating to the custody of children in Germany under the Uniform Child Custody Jurisdiction Enforcement Act, requiring that portions of the judgment relating to custody be reversed, but remanding to the trial court to determine whether the portions of the judgment relating to division of property and child support should also be vacated

Chandler v. Strong, 2014 Tex. App. LEXIS 3148, 2014 WL 1203208 (Tex. App. Austin Mar. 20, 2014)

(1) The mother brought a collateral attack against the agreed divorce decree, and although subject-matter jurisdiction could not be waived and could be raised at any time, the mother had to overcome a presumption that the original decree was valid, and the record had to affirmatively reveal the jurisdictional defect; (2) It was not sufficient for the mother to show that the father’s petition alleged insufficient jurisdictional facts, she had to show that the record from the divorce proceeding affirmatively and conclusively negated the court’s jurisdiction; (3) The decree recited that all jurisdictional allegations were made, that evidence established that the trial court had jurisdiction over the parties, and that Texas was the child’s home state, and the mother did not produce evidence that negated those recitations.

Tex. A&M Univ.-Kingsville v. Lawson, 127 S.W.3d 866 (Tex. App. 2004)

Rejecting the University’s argument that a mediated settlement of an employee’s wrongful termination action was unenforceable due to the failure to obtain approval of the governor, comptroller, and attorney general of Texas when nothing in the appropriation statutes required such approval and the final mediated agreement superseded and extinguished a prior settlement which contained such a requirement; also rejecting the assertion that complying with the agreement and representing the employee as an assistant professor, rather than instructor, would be lying and against public policy when the University failed to show how this was injurious to the public good and it could have avoided the public policy concerns simply by retroactively promoting the employee

Enforcement of a MSA that resulted from coercion

Zimmerman v. Zimmerman, No. 04-04-00347-CV, 2005 WL 1812613

Affirming enforcement of mediated divorce settlement against allegation of mediator coercion, where the only evidence presented in support of the claim was the party’s “perceptions of the mediator and how the mediator made him feel—evidence the trial court stated on the record it did not find credible.

In re Lee, 411 S.W.3d 445, 2013 Tex. LEXIS 809, 56 Tex. Sup. J. 1247, 2013 WL 5494094 (Tex. Sept. 27, 2013)

(1) The language of Tex. Fam. Code Ann. § 153.0071(e) means what it says: a trial court may not deny a motion to enter judgment on a properly executed MSA unless a party to the agreement was a victim of family violence; (2) To the extent the best interest inquiry of Tex. Fam. Code Ann. § 153.002 conflicts with Tex. Fam. Code Ann. § 153.0071, the rules of statutory construction provide that § 153.0071 prevails; (3) The MSA was statutorily compliant, because it was signed by the parties and their lawyers, and it displayed in boldfaced, capitalized, and underlined letters that it was irrevocable. Thus, it was binding on the parties.

Wall v. Tex. Dep’t of Family and Protective Serv., No. 03-04-00716-CV, 2006 WL 1502094 (Tex. App. June 2, 2006)

Enforcing mediated settlement of parental termination case and finding no coercion or undue influence sufficient to void mother’s consent to settlement, where she was represented by one, and at times, two lawyers during the mediation process. Quote from the Court: “There can be no doubt that a mediation in which a parent is asked to sign an affidavit forever terminating her relationship with her children is an extremely stressful event. This was exacerbated by the fact that Wall was faced with the unsavory dilemma of choosing between voluntarily relinquishing her right to [her children], and risking trial and the establishment of new grounds to terminate the parent-child relationship with her unborn child. [citation omitted]. But these are inherent pressures in the process and do not alone establish that Wall’s actions were involuntary.”

H. v. Tex. Dep’t of Family & Protective Servs., 2013 Tex. App. LEXIS 7137, 2013 WL 3013874 (Tex. App. Austin June 12, 2013)

The mother appealed the termination of her parental rights but the appellate court affirmed. The trial court found that the affidavit of relinquishment was executed voluntarily and the appellate court would not second-guess its determination on such issues. The evidence did not establish conclusively that the affidavit was procured by fraud, misrepresentation, overreaching, or undue influence; accordingly, the appellate court was unable to hold that the trial court erred in finding that the mother signed the affidavit voluntarily. There was also no evidence that termination was not in the children’s best interest. Moreover, an affidavit of relinquishment, in and of itself, could provide sufficient evidence that termination is in a child’s best interest.

Mediation Confidentiality

Avary v. Bank of America, N.A., 72 S.W.3d 779, (Tex. App.—Dallas 2002, pet. Denied)

Avary’s affirmative claim is limited to the facts before us. We are not presented with the question whether discovery of mediation communications would be appropriate if sought in the same case in which mediation had failed, and in which the parties were proceeding to trial on their original claims and defenses. Nor are we presented with the question whether a mediator can be compelled to testify or respond to discovery. We conclude only that where a claim is based upon a new and independent tort committed in the course of the mediation proceedings, and that tort encompasses a duty to disclose, section 154.073 does not bar discovery of the claim where the trial judge finds in light of the “facts, circumstances, and context,” disclosure is warranted.

Avary presented more than a scintilla of evidence on her claims for breach of fiduciary duty, negligence, and fraud relating to the Bank’s failures to disclose material facts affecting the rights of the beneficiaries of the estate. The bank did not establish each element of its affirmative defenses as a matter of law. The Bank’s motion did not address Avary’s claim for declaratory judgment. For these reasons, summary judgment for the Bank was not proper. Further, the trial judge abused his discretion in unreasonably restricting discovery on Avary’s claims. We reverse the trial court’s judgment and remand this case for further proceedings consistent with this opinion.

Knapp v. Wilson N. Jones Mem. Hosp., 281 S.W.3d 163 (Tex. App. —Dallas 2009)

A communication relating to the subject matter of any civil dispute made by a participant in an arbitration is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial proceeding. Tex. Civ. Prac. & Rem. Code Ann. § 154.073(a) (2005). Also, any record made at an arbitration is confidential, and the participants or the arbitrators may not be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to disclosure of confidential information or data relating to or arising out of the matter in dispute. § 154.073(b). However, § 154.073 does not create a blanket of confidentiality nor is it so broad as to bar all evidence regarding everything that occurs at arbitration from being presented in the trial court. The confidentiality statutes relating to arbitration have not been afforded the status of privileges by case law, although it is helpful to analogize the confidentiality statute to situations where privileges have been held not to be absolute. These are exceptions to the general rule of confidentiality of oral communications and written materials relating to arbitration proceedings

Lee v. Texas, 186 S.W.3d 649 (Tex. App.—Dallas 2006, pet. ref’d)

Rejecting arguments that defendant’s conviction for aggravated sexual assault on a child should be overturned because of newly discovered evidence relating to the mother’s allegedly false testimony that her attorney and a mediator told her not to raise defendant’s molestation of the child in a custody mediation and for ineffective assistance of counsel for failure to refute the mother’s testimony by call her attorney and the mediator

Kraft v. State, No. 03-04-00355-CR, 2006 WL151935 (Tex. App.—Austin Jan 19, 2006, pet. ref’d)

Finding that improper testimony from the complaining witness that the witness and appellant had attended a mediation session was harmless error in light of a defense witness reference to the mediation on cross examination that was not objected to

Alford v. Bryant, 137 S.W.3d 916 (Tex. App.—Dallas 2004, pet. Denied)

Reversing trial court judgment of legal malpractice against an attorney for failure to advise client of the risks and benefits of mediated settlement, where the mediator, who allegedly was a witness to the attorney’s statements, was not allowed to testify.

Quote from the court: “One cannot invoke the jurisdiction of the courts in search of affirmative relief, and yet, on the basis of privilege, deny a party the benefit of evidence that would materially weaken or defeat the claims against her [citation omitted]. Such offensive, rather than defensive, use of a privilege lies outside the intended scope of the privilege”

In re Empire Pipeline Corp., 323 S.W.3d 308, 2010 Tex. App. LEXIS 7583 (Tex. App. Dallas Sept. 15, 2010)

A settlement was reached during mediation. Thereafter, its enforceability was disputed. The motion to compel discovery sought documents regarding the matters discussed at the mediation and an attorney’s deposition. The court held that Tex. Civ. Prac. & Rem. Code Ann. § 154.073(a), (b) (2005 & Supp. 2010) barred discovery of the testimony and documents sought because they were confidential mediation evidence as to which there had been no agreement to allow disclosure under Tex. Civ. Prac. & Rem. Code Ann. § 154.053(c) (2005 & Supp. 2010). Case law allowing discovery of mediation evidence where a claim was based upon a new and independent tort committed in the course of the mediation proceedings and encompassing a duty to disclose was not applicable to the defense of an action to enforce a settlement reached in the mediation proceeding as to which discovery was sought. Because disclosure of the privileged mediation evidence would materially affect the aggrieved parties’ rights, an appeal was an inadequate remedy and a grant of mandamus relief was proper. An allegation of unclean hands lacked merit absent a showing of serious harm that could not otherwise be corrected.

In the Interest of A.J.I.L., 2016 Tex. App. LEXIS 11253, 2016 WL 6110450 (Tex. App. Houston 14th Dist. Oct. 18, 2016)

The Department argues the trial court was required to [*16]  carry out the terms of the MSA pursuant to section 153.007111Link to the text of the note upon proof that Father relinquished all his parental rights to the Department. Section 153.0071(e) provides that HN6 if a mediated settlement agreement meets the requirements of subsection (d), a party is entitled to judgment on the mediated settlement agreement. Tex. Fam. Code Ann. § 153.0071(e). In In re Lee, the Supreme Court of Texas held that the specific provisions of section 153.0071(e) prevailed over the general best-interest standard in section 153.002 and that section 153.0071(e) prohibits a trial court from denying a motion to render judgment on a properly executed Mediated Settlement Agreement based on a broad best-interest inquiry. See In re Lee, 411 S.W.3d 445, 453-58 (Tex. 2013); cf. In re Morris, 498 S.W.3d 624, No. 14-16-00227-CV, 2016 Tex. App. LEXIS 6624, 2016 WL 3457953 (Tex. App.—Houston [14th Dist.] June 22, 2016, orig. proc.) (holding that section 153.0071(e) does not apply to suits for termination of the parent-child relationship under Chapter 161). Here, although the MSA admitted at trial complies with the statutory requirements of section 153.0071(d), the record is clear that Father was not a party to the agreement. Therefore, the MSA was not binding on Father, and the trial court was not statutorily required to carry out its terms.

In re Acceptance Insurance Company, 33 S.W.3d 443 (Tex. App.—Fort Worth 2000, orig. proceeding)

During the trial of a case involving personal injuries, the judge ordered an additional mediation of the case. The parties and their representatives attended the second mediation, which did not result in a settlement agreement, then returned to trial. Following the trial, and over strong objections of the insurance company, the judge allowed an inquiry into whether the insurance company fully complied with the court ordered mediation. The appellate court declared that the trial court violated section 154.073 of the Texas Civil Practices and Remedies Code, and abused its discretion when it required a representative of the insurance company to testify about her conduct at the mediation.

In re Learjet, Inc., 59 S.W.3d 842 (Tex. App.—Texarkana 2001, orig. proceeding)

Statements made by the manufacturer’s employees regarding the design and production of the aircraft were videotaped and played for the parties during mediation. The company asked the trial court to order production of videotapes. At the hearing, the manufacturer argued that since the videotapes were created for mediation, they were not discoverable. Although the videotapes were prepared for mediation, the instant court ruled they were not protected from discovery by the attorney-client privilege as they were not made to facilitate the rendition of legal services; instead, they were made to present factual information to the opposing parties. Furthermore, the manufacturer did not show that the videotapes related to trial strategy, legal analysis, or to anything that indicated the attorney-client privilege. The instant court designated the employees in the videotape as expert witnesses, and the material involved as the type of information that was discoverable under Tex. R. Civ. P. 192.3(e). Thus, the instant court held that the trial court did not abuse its discretion by ordering the videotapes produced.

Duty to Mediate / Obligation to Mediate in Good Faith

Texas DOT v. Pirtle, 977 S.W.2d 657

Appellant sought review of a trial court order that assessed against a successful appellant all costs of court, including attorney’s fees and mediator’s fees appellee incurred finding that appellant had failed to mediate in good faith. The court found that the civil practice and remedies code provides that a trial court may order litigants into alternative dispute resolution and that the proper remedy for a party dissatisfied with this order is to file a written objection within 10 days. Appellant filed no objection but refused to participate in the mediation. The court found that if appellant had filed an objection then appellee would have been spared the expense of mediation and therefore the court affirmed the trial court award of costs. The court concluded that it was not an abuse of discretion for a trial court to assess costs when a party did not file a written objection to the trial court’s order to mediate, but nevertheless refused to mediate in good faith.

Decker v. Lindsay, 824 S.W.2d 247 (Tex. App. –Houston [1^st Dist.] 1992, no writ)

Respondent judge ordered relators husband and wife to mediate under Tex. Civ. Prac. & Rem. Code Ann. § 154.021(a) (Supp. 1992), their negligence action against the real party in interest. Relators sought mandamus relief, and the court conditionally granted the petition, finding that respondent’s order was void insofar as it directed relators to negotiate in good faith a resolution of their dispute through mediation, despite their objections. The court found that a trial court was authorized to refer a dispute to an alternative dispute resolution on its own motion under § 154.021(a); however, it does not authorize the court to require the parties to mediate in good faith. The court conditionally granted relators husband and wife’s petition for writ of mandamus and ordered respondent judge to vacate those portions of the order requiring relators and the real party in interest to participate in mediation. The court would issue the writ only in the event that respondent failed to comply.

Gleason v. Lawson, 850 S.W.2d 714 (Tex. App—Corpus Christi 1993, no writ)

The trial court assessed court costs against Gleason for her decision to not enter into a good faith settlement negotiation. However, the court never ordered Gleason to enter into a good faith negotiation. When Gleason challenged the decision, the appellate court held that the trial court could not use failure to negotiate as a reason for assessing court costs if the court never ordered the parties to mediate or enter into other settlement negotiations.

Hansen v. Sullivan, 886 S.W.2d 467 (Tex. App.—Houston [1^st Dist.] 1994, no writ)

The plaintiff in a medical malpractice case filed a motion to require the parties to mediate, which the trial judge granted. The case did not settle in mediation. Plaintiff filed a motion for sanctions, asserting that relator refused to settle, refused to participate in the mediation, and that relator violated the rules of mediation and respondent’s order by refusing to negotiate in good faith. Respondent ordered relator to pay plaintiff’s share of the mediator’s fee and to pay plaintiff attorney fees and expenses. Relator filed an opposition and requested abatement of the sanctions issue until final judgment. The judge granted plaintiff’s enforcement motion and ordered relator to pay the sanctions or he would strike his pleadings. The court of appeals found that Hansen had attended mediation and, citing Decker, held the trial court could not sanction Hansen for failing to negotiate in good faith.

Texas Parks and Wildlife Department v. Davis, 988 S.W.2d 370 (Tex. App.—Beaumont 2000, orig. proceeding)

Appellee was injured when the park bench on which he was sitting collapsed. He sued for damages. At trial, after mediation was unsuccessful, the jury found in his favor. The trial court awarded damages, plus the cost of mediation and attorney fees, based on its finding that appellant had not mediated in good faith. The agency had objected to the trial court’s mediation order, but the court had overruled the objection. The appellate court found that the agency had attended mediation and had made an offer, so it could not be said that the agency had not participated in the mediation. The appellate court reversed the award of court costs against the agency.

In re Acceptance Insurance Company, 33 S.W.3d 443 (Tex. App.—Fort Worth 2000, orig. proceeding)

Relator was an insurance company involved in a personal injury suit. In the main lawsuit, relator appeared at two mediations pursuant to the trial judge’s order. The first mediation order provided that the parties were to make a good faith effort to settle. Later, the trial court called relator to tell it that a sanctions hearing would be held. Relator received no written motion for sanctions or contempt. The hearing investigated whether relator had violated the mediation orders. Relator sought a writ of mandamus. The appellate court conditionally granted the writ because the hearing had been void. The asserted violations of the mediation orders would have been for constructive contempt, requiring notice to relator. The appeals court declared the trial court’s order requiring a second mediation was void to the extent that it required the parties to negotiate in good faith; therefore, the same court abused its discretion when it permitted an inquiry into whether the insurance company negotiated in good faith at the second mediation.

Sanctions

Ricks v. Ricks, 169 S.W.3d 523

The parties had entered into a mediated settlement agreement and the trial court signed the agreed-upon decree. Thereafter, the ex-wife sought a new trial on the ground that the ex-husband misrepresented the value of certain stock. The trial court ruled in the ex-husband’s favor and the court affirmed. Because the ex-wife never complained to the trial court that the parties’ settlement did not comply with statutory directives, the ex-wife failed to preserve error pursuant to Tex. R. App. P. 33.1. The ex-wife failed to show that the ex-husband misrepresented the true stock value, and therefore the trial court did not err in denying her motion for a new trial on these grounds. The ex-wife’s conclusory statement of the value of the stock without evidentiary support was not probative of the stock’s market value. Because the ex-wife only generally objected to the trial court’s divorce decree as containing mistakes, but did not make the trial court aware of specific objections, the wife failed to preserve error. The trial court did not err in denying the ex-wife’s motion for a new trial on the grounds of newly discovered evidence because she did not explain how the evidence was new.

Roberts v. Rose, 37 S.W.3d 31

Appellant attorney’s client brought a suit against appellee for an unpaid debt. Appellee filed a counterclaim. The court ordered appellant and his client to participate in mediation with appellee, but they did not appear. The client testified that he was never told of a place or time for mediation. The first time that the client became aware that he had been sanctioned for failure to appear was after he sought the services of new legal counsel. Originally, the trial court sanctioned both appellant and client. However, after hearing testimony, the court ordered appellant to pay the full amount. The court affirmed. Appellant was sanctioned for failure to appear, not for bad faith. However, there was evidence of bad faith in appellant’s habitual failure to keep his client informed during the litigation. Because appellant was most responsible for the infraction, the trial court did not abuse its discretion in sanctioning him alone. Moreover, the sanction was just and was not outrageously punitive. Additionally, the motion for damages for filing a frivolous appeal was denied as the appeal was not so groundless as to merit sanctions.

Bostow v. Bank of Am., 2006 Tex. App. LEXIS 377

The depositor maintained accounts at the bank. The bank sought to terminate their relationship and an injunction was issued against the depositor. The trial court awarded the depositor damages on a claim of breach of contract. On appeal, the court awarded the depositor post-judgment interest on the damage award at five percent, and as modified, the court affirmed. The trial court did not err in issuing a permanent injunction against the depositor. The bank pleaded and proved a pattern of harassing conduct by the depositor in which he tried repeatedly to continue his banking relationship after the bank terminated it. Depositor was entitled to post-judgment interest at the rate of five percent on the damages awarded on his contract claim. The court rejected a depositor’s claims that the permanent injunction did not comply with Tex. R. Civ. P. 683. The rule did not apply to permanent injunctions. The depositor’s claim of an unconscionable delay in the proceedings lacked merit. The depositor provided no record cites in support of the argument that opposing counsel engaged in prosecutorial misconduct, nor did the depositor show that the trial court erred in refusing to impose sanctions.

TransAmerican Natrual Gas Corp. v. Powell, 811 S.W.2d 913

Relator corporation sought a writ of mandamus directed at respondent trial judge, who entered an order imposing sanctions against relator for discovery violations. Relator had filed an action against another corporation for damages allegedly incurred from the sale of defective merchandise, and the other corporation counterclaimed for damages. A dispute arose over the scheduling of certain depositions. Relator filed a motion for a protective order, and the response included a motion for sanctions. The trial court granted the motion for sanctions and struck relator’s pleadings, dismissed its action, and granted an interlocutory default judgment on the counterclaim against relator, reserving only the amount of damages for trial. The court held that relator was entitled to mandamus relief because the trial court’s sanctions were manifestly unjust under Tex. R. Civ. P. 215. The court found that although a trial court had great discretion to impose sanctions for discovery violations, the sanctions should not have disposed of relator’s claims without a trial on the merits.