In re Bruce L. Jamison (No. 09-21-00223-CV; October 24, 2024) arose from a nasty dispute associated with the involuntary windup of a luxury auto dealer in Montgomery County. Jamison’s client, Powers, applied to the trial court to windup the business but also asserted claims against several members of the Stomberg family for fraud, theft, conversion, fraudulent transfer, and other theories. The Stombergs responded by filing a counterclaim against Powers for theft, embezzelment, conversion, fraudulent transfer, fraud, breach of fiduciary duty, misappropriation of trade secrets, racketeering, tortious interference with contracts and prospective and continuing business relations unfair competition, and misappropriation by passing off, federal communications act violations, and conspiracy. The Stombergs moved to complete discovery, which the trial court granted and ordered Powers to respond to 45 separate interrogatories and requests for production. The court gave Powers about three weeks to respond to discovery. In the meantime, Powers allegedly sent an email to all current and potential motor vehicle customers and wholesalers, as well as a bunch of other people, informing them of the fraudulent and other unlawful actions of one of the Stombergs. This provoked the Stombergs into filing a defamation claim. Powers subsequently filed a TCPA motion to dismiss the defamation claim.
Then the fireworks began. Powers filed his TCPA motion about fifteen minutes before the deadline for his response to the trial court’s discovery order. Powers’ counsel, Jamison, argued that the TCPA motion stayed discovery in the entire case, thus excusing Powers’ non-compliance with the discovery order. The Stombergs followed up by accusing Jamison of violation Rule 13, TRCP, on the basis that Jamison filed the TCPA motion in bad faith and for an improper purpose (i.e., to delay discovery). They argued further that there was no evidentiary support for the TCPA motion. Seeking a pound of flesh, the Stombergs asked the trial court to sanction Jamison’s law firm and Powers, order Powers to produce the discovery or face dismissal of his claims, and order Powers to pay their attorney’s fees. A few days later the Stombergs piled on by seeking sanctions under Rule 215.2, TRCP, for abuse of the discovery process. They also requested the trial court to order that discovery on claims other than the defamation claim was not suspended by the TCPA motion to dismiss. The trial court agreed and assessed additional sanctions and attorney’s fees against Powers and Jamison’s law firm. Powers and Jamison objected on the basis of § 27.003(c), CPRC, which states that a TCPA motion to dismiss suspends “all discovery in the legal action,” and that the ”legal action” in this case included all of the Stombergs’ counterclaims. After a hearing, the trial court found that Jamison violated Rule 13, as well as Chapter 10, CPRC, and ordered him to appear in court to be adjudged in criminal contempt of court on 45 counts of violating the orders compelling discovery. The trial court did not rule on the merits of Powers’ TCPA motion to dismiss. Jamison filed a petition for writ of mandamus.
In a per curiam opinion, the court of appeals granted mandamus. Taking up the trial court’s sanction order under Chapter 10, CPRC, the court observed that the order omitted a finding that the TCPA motion to dismiss was groundless. Without a finding that Jamison filed the motion in bad faith or for an improper purpose, the sanctions order “fail[ed] to link Jamison’s ‘bad faith’ to a specific petition or motion that Jamison signed, as required by Rule 13 and section 10.001.” The Stombergs argued that SCOTX’s ruling in Montelongo v. Abrea, 622 S.W.3d 290 (Tex. 2021) controlled because the Court held that the term “legal action” in § 27.003(b) “referred to claims first brought in a pleading brought within 60 days of the filing of the TCPA motion to dismiss.” The court of appeals rejected this argument on the basis that § 27.003(c) suspends discovery “until the trial court decides whether a claim brought under subsection 27.003(b) must be dismissed to protect a constitutionally protected right. . . . Suspending all discovery in the entire case until the trial court orders specific discovery related to the TCPA motion to dismiss or rules on the motion to dismiss will not render any provision in section 27.003(c) meaningless.”
Turning to the Rule 13 order, the court found that the trial court abused its discretion by imposing a sanction [] without finding the motion was groundless. Jamison’s contention about the effect of § 27.003(c), while there is certainly a lack of precedent on the question, “is at least warranted by a good faith argument for the extension of existing law,” thus exempting it from Rule 13’s definition of “groundless.” By the same token, the court held that just because Jamison filed the TCPA motion fifteen minutes before the deadline for compliance with the discovery order, as well as the “aggressive” tone of an email from an associate of Jamison’s to the Stombergs’ lawyer, did not show bad faith because Jamison “could present a good faith argument that the two subsections [of the TCPA] had different purposes and that under section 27.003(c) filing a TCPA motion to dismiss an amended counterclaim should limit discovery in the same manner as filing a TCPA motion to dismiss an original claim” (citations omitted). The Stombergs thus failed to overcome the presumption that an attorney files motions in good faith. The court reasoned further that “it would have been reasonable for Jamison to conclude that he would need to file the motion before he exposed his client to the prejudicial effect of non-compliance with the discovery order,” especially as the trial court threatened criminal contempt. The trial court thus abused its discretion here as well.
This is an interesting case for TCPA fans because it raises what might be a novel question of the application of the discovery suspension provision in § 27.003(c). It is also interesting for its analysis of Chapter 10, CPRC, and Rule 13’s standards for “groundlessness” and “improper purpose.” In any event, there appears to be a lot of hard feelings in this case, both between the parties and Jamison, Powers, and the trial court, that will accompany the court of appeals’ decision back to Montgomery County.
