The Corpus Christi Court of Appeals has thrown out a $750,000 sanctions award against non-party Chase Bank for its failure to comply with a trial court order appointing a successor trustee and to respond fully to requests for discovery. The court, however, upheld the sanctions award to the extent of the $500 statutory cap for a criminal contempt sanction against a non-party.
In re JPMorgan Chase Bank, N.A. d/b/a Chase Bank (No. 13-25-00681-CV; April 21, 2026) arose from a dispute over the ownership over two family trusts. Plaintiff noticed Chase of its intention to depose it by written questions, along with a subpoeana duces tecum for financial and bank records relating to certain accounts. Chase produced some of the records but not all of them. The parties then had a dispute over the appointment of a successor trustee. The court appointed one at the request of several parties. The new trustee’s counsel followed up with Chase, asserting that it hadn’t fully complied with the order appointing the new trustee. According to counsel, Chase’s refusal to acknowledge valid checks drawn from the trust account caused the lapse of a $750,000 life insurance policy. Chase didn’t respond to counsel’s letter.
Counsel subsequently filed a motion to direct chase to release trust assets and to compel the requested discovery. He further moved for sanctions in the amount of $6,700 for his fees and $750,000 for contempt of court. Though Chase didn’t know about the hearing on the motion and didn’t attend, the trial court granted counsel’s motions. Chase responded by petitioning for mandamus and filing an emergency motion staying the sanctions order and further proceedings against it. The court of appeals granted the stay and requested the trustee’s response to the petition, which he filed.
In an opinion by Justice Peña, the court of appeals conditionally granted the writ in part. Chase first argued that the trial court abused its discretion by issuing the sanctions order because it lacked personal jurisdiction. There was no question that Chase “was duly served with a subpoena for a notice of deposition and subpoena duces tecum,” and that its registered agent was served with citation and the motion to show cause before the hearing. Since the record reflected that citation was properly issued and served, the court rejected Chanse’s jurisdiction argument.
Next, Chase asserted that the trial court sanctioned it without legal authorization and in violation of the statutory cap. The court agreed that the rules cited by the trustee to support sanctions (TRCP 215.1(b) and 215.3) “do not authorize the imposition of sanctions or expenses against a non-party” (citations omitted). The trial court thus abused its discretion by sanctioning Chase $6,700 for the trustee’s attorney’s fees.
As to the cap issue, the court observed that “though non-parties may not be sanctioned for discovery violations under the cited rules, a trial court may hold a non-party in contempt of court” (citations omitted). But, under § 21.002(b), Government Code, “[t]he punishment of contempt of a court other than a justice court or municipal court is a fine of not more than $500 or confinement in the county jail for not more than six months, or both such a fine and confinement in jail.” But, as the court pointed out, the cap applies only to criminal contempt orders, not civil ones. Because the trial court’s order didn’t state what kind of order it was, the court determined the “purpose behind the contempt order.” A civil order is “remedial and coercise in nature,” where as a criminal order “is punitive in nature.” Here the trial court’s order was not “remedial or coercive,” but sought to “punish[] Chase for its completed actions.” It was thus criminal in nature, and the trial court abused its discretion in issuing it.
Chase further argued that the trial court erred by ordering the sanctions payable to the trustee. The court concurred, observing that “civil damages may not be awarded to a private party as punishment for contempt because such damages are not a fine” (citations omitted). Chase also challenged the validity of the subpoena upon which the sanctions were based. The court rejected this argument, since the subpoena complied with § 59.006(a), Finance Code, and § 30.007, CPRC. The court was equally unimpressed by its argument that the successor trustee was “not a party, intervenor, or otherwise before the trial court such that he could properly file the Trustee’s Motion.” Here the court chastised Chase for “fail[ing] to acknowledge or adhere to the trial court’s [] order appointing Badders as a successor trustee.” Instead, Chase “did not remove the prior trustee from the accounts, delivered correspondence to the prior trustee rather than Badders, and refused to acknowledge negotiable instruments drawn on the account.” The successor trustee was indeed properly before the trial court.
The court granted relief in part and lifted the stay. It directed the trial court to vacate the $6,700 sanction and its award of $750,000 to reflect the $500 statutory maximum fine, this time to be paid to the court, not the trustee. All other relief was denied.
