Can a Court Impose Sanctions for Failing to Appear at Court-Ordered Mediation?

By Brett Goodman

Similar to a court referring a case to mediation in the first place, in Texas, a trial court is under a discretionary standard concerning imposing sanctions for failure to appear. See Roberts v. Rose, 37 S.W.3d 31, 33 (Tex. App. 2000). Discretion is abused when the trial court acts without reference to any guiding rules or principles. See Johnson v.. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex.1985). Courts have an inherent power to use sanctions to discipline attorneys when appropriate. See Lawrence v. Kohl, 853 S.W.2d 697, 700 (Tex.App.—Houston [1st Dist.] 1993, no writ). The appropriateness of this power or whether an imposition of sanctions is just is analyzed on two-prongs:

1. A direct relationship existing between the offensive conduct and the sanction; and
2. Determining whether the party, the attorney, or both are responsible for the offensive conduct.

See Wetherholt v. Mercado Mexico Cafe, 844 S.W.2d 806, 808 (Tex.App.—Eastland 1992, no writ) (emphasis in original)

In addition, sanctions may not be excessive and should only be exercised to the extent of satisfying their initial purpose, usually of discouraging further abuse. Using the two-pronged analysis, Texas has upheld sanctions in that the “punishment fits the crime.” In a corporate suit between a company president and two people alleged of misuse of company funds among other unprofessional behavior, the court first found bad faith on part of the company president Luxenberg in his “callous disregard” of the mediation process. The court found a direct relationship between Luxenberg’s pleadings and the sanction against him, and he was found to be the only possible responsible party. Concerning the excessiveness of the sanctions, the court found the order not to be severe in that several lesser orders were given to Luxenberg without response. See Luxenberg v. Marshall, 835 S.W.2d 136, 141 (Tex.App.—Dallas 1992, no writ)

Courts have also upheld sanctions imposed pursuant to the broad power to sanction. In a suit against several attorneys who were found to have violated local rules of Nueces County concerning random assignment of cases, the judge imposed $10,000 sanctions to each attorney. Recognizing the “inherent power” of a court to sanction, the Supreme Court of Texas found that the lower court had no overstepped its bounds. This power is not unlimited, however, and constitutional considerations of due process must be kept in mind. However, the Court found no due process violation because the attorneys were fully aware of the local system and intentionally tried to avoid it. See In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997).

More recently, courts have furthered the broad power of trial courts to impose sanctions for failing to appear at court-ordered mediation. In a 2000 suit over an unpaid debt, the court again found the sanction appropriate under the two-pronged analysis. See Roberts, 37 S.W.3d at 33. Taking the second prong first, the court found only attorney Roberts to be responsible for the party missing mediation, because all other evidence demonstrated an eager client who followed all advice of his attorney but was not informed of the mediation. The court did not make mention of the direct relationship prong, establishing that it is very difficult to defeat a sanction on this basis, thereby furthering the broad discretionary power of trial courts. Finally, the court ruled that the sanction was not excessive in that they were not outrageous and would prevent further attorney abuse, so the court was also very deferential to the trial court in terms of the appropriate level of sanction.

In the same year, the court took the “inherent powers” a step further in that these powers are a threshold for considering the two-pronged analysis. The court wrote, “[b]ecause we overrule appellant’s first issue on the basis that the trial court did not abuse the discretion it has pursuant to its inherent powers, we need not and do not address whether the sanctions imposed would have been appropriate.” Garcia v. Mireles, 14 S.W.3d 839, 843 (Tex. App. 2000).

In 2006, a Texas court reinforced the power of the trial court and gave their decision a high presumption of validity. Although the court recognized the aforementioned pronged tests and need for sanctions to not be severe, there were no cites to the record that the trial court abused its discretion, so the trial court’s decision was assumed to be legitimate. Bostow v. Bank of Am., 14-04-00256-CV, 2006 WL 89446 (Tex. App. Jan. 17, 2006).

Though it does not seem to be commonplace, a sanction that is deemed too severe will be overruled. . In conjunction with the severity, a court “must consider the availability of less stringent sanctions and whether such lesser sanctions would fully promote compliance.” Because the trial court did not make any such considerations and immediately imposed the most devastating sanction possible, that sanction was deemed too severe and could not be imposed. TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 918 (Tex. 1991)

Also seemingly rare, there have been cases when the trial court was deemed to be not acting pursuant to its discretion because it did not act in relation to the appropriate guiding rules. See In re Magallon, 09-07-438CV, 2007 WL 2962934 (Tex. App. Oct. 11, 2007).

Technorati Tags: law, ADR, arbitration

Brett Goodman is a summer intern at Karl Bayer, Dispute Resolution Expert. Brett is a J.D. candidate at The University of Texas School of Law. He holds degrees in Finance, Mathematics, and Spanish from Southern Methodist University.