Texas State Taekwondo Association, Sunhessup Lee, Won Chik Park, Jin Song Chung, Kyu Boong Yim and Chang Ski Lee v. Lone Star State Taekwondo Association, Lee L. Randolph, Laschelles McCarthy and Kim Davis

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS ) TEXAS STATE TAEKWONDO                          ) ASSOCIATION, SUNHESSUP LEE,                  ) WON CHIK PARK, JIM SONG CHUNG,         ) KYU BOONG YIM, and CHANG SKI LEE, ) No. 08-01-00403-CV ) Appellants, ) Appeal from ) v. ) 95th District Court ) LONE STAR STATE TAEKWONDO ) of Dallas County, Texas ASSOCIATION, LEE L. RANDOLPH,               ) LASCHELLES McCARTHY, and ) (TC# DV-9903030) KIM DAVIS,                                                        ) ) Appellees. ) O P I N I O N Texas State Taekwondo Association, et al. (Appellants) brought suit against Lone Star State Taekwondo Association, et al. (Appellees) alleging various causes of action. On appeal, Appellants challenge the trial court=s judgment entered upon jury findings following a binding summary jury trial. By motion, the Appellees seek sanctions for frivolous appeal. FACTUAL SUMMARY Appellants sued Appellees for slander, tortious interference with business relationships, and intentional infliction of emotional distress. Appellees in turn sought redress for Appellants= wrongful denial of access to books and records, claimed Appellants had initiated the lawsuit for an improper purpose, and requested attorney=s fees. On December 18, 2000, the parties participated in a court-ordered meditation and signed a Rule 11 agreement for a binding summary jury trial. The Rule 11 agreement was filed with the district clerk of Dallas County and made specific reference to the cause number and style of this case. With the exception of Chang Ski Lee, the agreement was signed by each of the Appellants. The substance of the agreement provides: 1. The lawsuit, including all claims and counterclaims, shall be adjudicated by a binding summary jury trial before the 95th District Court. The date of such trial shall be set by the Court and shall not be subject to continuance except by order of the Court. The trial, from start to finish, shall take one business day. The parties shall work together to define the time schedule for jury selection, presentation of their respective claims, summation, jury deliberation and other procedural parts of the trial. 2. The findings of the jury and judgment entered by the trial court shall be non-appealable. 3. The parties shall work together to simplify the jury issues and instructions that will be presented at trial. 4. The parties shall work together to define and exchange exhibit lists at least one week before trial, including resolution of any matters that would normally be contained in Motions in Limine and any other pre-trial matters. 5. The parties contemplate the [sic] need only one pretrial conference to work through any unresolved matters. 6. The parties signing hereto have authority to bind and act for all named parties to the suit. Signed this 18th day of December, 2000. [Emphasis added]. The summary jury trial was conducted on May 22, 2001. The proceedings were not recorded by a court reporter. The content of the court=s charge is detailed in the margin.[1] Appellants asked the court to disregard the jury=s finding that the lawsuit was brought for an improper purpose because it was rendered immaterial by other findings in Appellants= favor. They also argued that the question as to Aimproper purpose@ should not have been submitted to the jury in the first place, that Appellees had no statutory or contractual basis to recover attorney=s fees, and that the fee award should be reduced. The trial court entered judgment that Appellees recover $32,000 in reasonable and necessary attorney fees, less $10,000 which the jury found to be Appellants= future damages, for a total award of $22,000 together with post-judgment interest and court costs. This appeal follows. THE RULE 11 AGREEMENT[2] Appellants bring four issues for review, complaining that the trial court erred in refusing to disregard certain jury findings because they were immaterial, in fatal conflict, and did not entitle Appellees to recover. We are precluded from addressing the merits of their claims. Chapter 154 of the Texas Civil Practice and Remedies Code addresses alternative dispute resolution procedures, including mediation, mini‑trial, moderated settlement conference, summary jury trial, and arbitration. See generally Tex.Civ.Prac.&Rem.Code Ann. '' 154.001‑.073 (Vernon 1997 & Vernon Supp. 2002). All of the methods of dispute resolution contained within Chapter 154 are non-binding unless the parties agree otherwise. See id. '' 154.023‑.027; Glazer=s Wholesale Distributors, Inc. v. Heineken USA, Inc., No. 05-99-01695-CV, 2001 WL 727351, at *13 (Tex.App.--Dallas June 29, 2001, no pet. h.). Such is the case here. Pursuant to the Rule 11 agreement, the summary jury trial was binding and the findings of the jury and the judgment entered by the trial court were non-appealable. Despite Appellants= efforts to avoid the effect of the jury=s unfavorable findings, the Rule 11 agreement is valid and enforceable. Indeed, Appellants offer no reason why the agreement--which is hand-written, signed and filed with the papers as part of the record of this case--should not be enforced. While one of the Appellants, Chang Ski Lee, was not a signatory, the agreement provides that A[t]he parties signing hereto have authority to bind and act for all named parties to the suit.@ Because Appellants have waived their right of appeal, we affirm the judgment below. The assigned points of error are accordingly overruled. MOTION FOR SANCTIONS Appellees have requested that we impose sanctions against Appellants for bringing a frivolous appeal. We are authorized to award a prevailing party just damages if we determine that an appeal is frivolous: If the court of appeals determines that an appeal is frivolous, it may--on motion of any party or on its own initiative, after notice and a reasonable opportunity for response--award each prevailing party just damages. In determining whether to award damages, the court must not consider any matter that does not appear in the record, briefs, or other papers filed in the court of appeals. Tex.R.App.P. 45. Rule 45 became effective September 1, 1997 and replaced former Rule 84, thus broadening the appellate courts= ability to award sanctions. Smith v. Brown, 51 S.W.3d 376, 380 (Tex.App.--Houston [1st Dist.] 2001, pet. denied). Under the former rule, sanctions could be imposed Awhere the court of appeals shall determine that an appellant has taken an appeal for delay and without sufficient cause.@ Texas Dept. of Transp. v. Beckner, 74 S.W.3d 98, 105 (Tex.App.--Waco 2002, no pet.). This language--requiring courts to find that the appeal was taken in bad faith--is noticeably missing from the new rule. Several of our sister courts have concluded that a showing of bad faith is no longer required. Id.; Smith, 51 S.W.3d at 381; Mid-Continent Casualty Company v. Safe Tire Disposal Corporation, 2 S.W.3d 393, 397 (Tex.App.--San Antonio 1999, no pet.). In Smith, the court confessed that it had erroneously continued to impose a Abad faith@ requirement even after new Rule 45 took effect and specifically disavowed the language employed in earlier cases. Smith, 51 S.W.3d at 380, disavowing Fair Deal Auto Sales v. Brantley, 24 S.W.3d 543, 547 (Tex.App.--Houston [1st Dist.] 2000, no pet.)(overruling motion for sanctions because there was Ano basis for concluding [the appellant] had no reasonable ground to believe that the judgment would be reversed, and brought the appeal in bad faith and solely to delay payment@); Parker v. State Farm Mutual Auto. Ins. Co., 4 S.W.3d 358, 364 (Tex.App.--Houston [1st Dist.] 1999, no pet.)(holding that Athe record must clearly show that [the appellant] had no reasonable expectation of reversal, and that he did not pursue [the] appeal in good faith@ to award damages for a frivolous appeal under Rule 45); Swate v. Crook, 991 S.W.2d 450, 455 (Tex.App.--Houston [1st Dist.] 1999, pet. denied)(holding damages for a frivolous appeal Awill be imposed only if the record clearly shows the [appellant] has no reasonable expectation of reversal, and . . . has not pursued the appeal in good faith@); City of Houston v. Morua, 982 S.W.2d 126, 131 (Tex.App.--Houston [1st Dist.] 1998, no pet.)(holding that A[a]ppellate sanctions will be imposed only if the record clearly shows the appellant has no reasonable expectation of reversal, and the appellant has not pursued the appeal in good faith@). In opinions pre-dating Beckner and Smith, we have relied upon the Abad faith@ standard. See American Paging of Texas, Inc. v. El Paso Paging, Inc., 9 S.W.3d 237, 240 (Tex.App.--El Paso 1999, pet. denied); Faddoul, Glasheen & Valles, P.C., v. Oaxaca, 52 S.W.3d 209, 213 (Tex.App.--El Paso 2001, no pet.). Under either standard, we believe sanctions are appropriate here. We must exercise prudence and caution and use careful deliberation in awarding appellate sanctions. Smith, 51 S.W.3d at 381. Although the imposition of sanctions is within our discretion, we may do so only in circumstances that are truly egregious. Angelou v. African Overseas Union, 33 S.W.3d 269, 282 (Tex.App.--Houston [14th Dist.] 2000, no pet.). In determining whether an appeal is objectively frivolous, we look at the record from the viewpoint of the advocate and decide whether there are reasonable grounds to believe the case could be reversed. Smith, 51 S.W.3d at 381; Mid-Continent, 2 S.W.3d at 397. We agree with Appellees that this appeal has been brought without reasonable grounds to believe that the judgment would be reversed. Appellants have not even bothered to respond to the motion. This appeal is merely an attempt to circumvent a binding agreement and to delay collection of a non-appealable judgment. Consequently, from the record and briefs filed with this court, we conclude the appeal is objectively frivolous. Left for consideration is the amount of the sanction. Recent commentators have observed that the new measure of damages gives appellate courts Avirtually unbridled discretion@ in assessing damages. John Hill Cayce, Jr., Anne Gardner, and Felicia Harris Kyle, Civil Appeals in Texas: Practicing Under the New Rules of Appellate Procedure, Baylor L. Rev. 867, 1013 (1997). Factors that appellate courts may consider in arriving at a Ajust@ amount are attorney=s fees and damages caused by the delay resulting from the frivolous appeal, and perhaps, the egregiousness of the opposing party=s conduct. Id., citing Nagle v. Alspach, 8 F.3d 141, 145-46 (3d Cir. 1993)(under Federal Rules of Appellate Procedure 38, which provides that Ajust damages@ may be imposed for frivolous appeals, court imposed $12,036 sanction based upon affidavits of appellee filed in the appellate court outlining costs and attorney=s fees incurred as a result of the appeal). Bad faith may also be relevant to determine the amount of the sanction. Beckner, 74 S.W.3d at 105; Smith, 51 S.W.3d at 381. Appellees have, by affidavit filed with this court, established damages of $7,693.36 incurred in defending this appeal.[3] Appellants have not contested the affidavit as to either form or substance. While Rule 45 does not provide a method for proving damages in the appellate court, we believe proof by affidavit is proper and that the affidavit establishes just and reasonable attorney=s fees. See Smith, 51 S.W.3d at 376 (where court accepted proof of damages by affidavit in the amount of $5,000 in reasonable and necessary attorney=s fees). Moreover, A[b]ecause affidavits are allowed for the purpose of supporting other appellate motions, it is thought that affidavits may properly be used to support a request for damages contained in a motion for sanctions, particularly when the damages cannot be ascertained from the existing record.@ Cayce, Gardner & Kyle, Civil Appeals in Texas: Practicing Under the New Rules of Appellate Procedure, Baylor L. Rev. (1997) at 1013-14, citing Tex.R.App.P. 10.2 (stating that a motion must be supported by affidavit or other satisfactory evidence if the facts in the motion are not in the record; not within the court=s knowledge; or within the personal knowledge of the attorney signing the motion). We affirm the judgment below and impose sanctions against Appellants in the amount of $7,693.36. August 15, 2002 ANN CRAWFORD McCLURE, Justice Before Panel No. 1 Larsen, McClure, and Chew, JJ. (Do Not Publish) [1] The jury answered the special issues in the following manner: QUESTION 1: Do you find from a preponderance of the evidence that the [Appellees] tortiously interfered with the [Appellants=] relationship with its members and/or with its parent organization, USTU? . . . Answer >Yes= or >No=: No QUESTION 2: Do you find from a preponderance of the evidence that [Appellees] slandered [Appellants]? . . . Answer >Yes= or >No=: Yes QUESTION 3: Did [Appellees] intentionally inflict severe emotional distress on [Appellants]? . . . Answer >Yes= or >No=: No If you have answered >Yes= to Question 1, Question 2 and/or Question 3, then answer the following question. Otherwise, do not answer the following question. QUESTION 4: What sum of money, if any, if paid now in cash, would fairly and reasonably compensate [Appellants] for damages, if any, proximately caused by the [Appellees=] actions? Do not add any amount for interest on damages, if any. Answer in dollars and cents for damages, if any, that were sustained in the past: 0 in reasonable probability will be sustained in the future: $10,000 QUESTION 5: Did the [Appellants] wrongfully deny the [Appellees] access to the financial books and records of the Texas State Taekwondo Association? Answer >Yes= or >No=: Yes QUESTION 6: Do you find that the [Appellants=] lawsuit against the [Appellees] was brought for any improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation? Answer >Yes= or >No=: Yes If you have answered >Yes= to Question 5 and/or Question 6, then answer the following question. Otherwise, do not answer the following question. QUESTION 7: What is a reasonable fee for the necessary services of the [Appellees=] attorney in this case, stated in dollars and cents, for preparation and trial? . . . Answer: $32,000 [2] Rule 11 provides: AUnless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.@ Tex.R.Civ.P. 11. [3] Attached to the motion for sanctions is an affidavit by Appellees= attorney explaining that his appellate fees are $7,437.25 and that he has incurred costs of $256.11. The affidavit details services rendered as more than forty-two hours of researching and briefing the issues presented by Appellants on appeal at an hourly rate of $175.