Truth or Consequences

The Texas Fourteenth Court of Appeals recently rendered Redmond Legal Group v. Chatman and Mitra, NO. 14-17-00835-CV (August 27, 2019). It is not a workers' compensation case but involves a dispute among lawyers regarding their representation of one of the parties and a subsequent conflict among themselves. 

Mr. Redmond is the owner of Redmond Legal Group, and he had contracted with Ms. Chatman and Ms. Woody for legal services. The dispute between these lawyers began in 2014 and was eventually set for trial in January 2016. However, within weeks of the beginning of trial, Mr. Redmond's attorney moved for a continuance due to Mr. Redmond's personal health. There was a "physician's letter" provided to the court in support of the continuance motion. 

The letter (referred to throughout as the "Hyber" letter) described a November 2015 injury "necessitating 'medical treatment and stay, and rehabilitative therapy . . ..'” It also noted that Mr. Redmond was "unable to travel until he is reevaluated and possibly released by me during his next visit in late January 2016.” The trial was continued. Months later, "Chatman and Woody moved for sanctions alleging the" medical excuse "was fraudulent and was submitted to delay the trial and give Redmond more time to respond to discovery."

In December 2016, at a status conference, Mr. Redmond's attorney "informed the trial court that the" medical excuse letter "was 'false.'” Apparently, the letter "was not written by the doctor and there was no clinic at" the address stated on it. The trial judge inquired of counsel: “You are saying to me that this letter was presented to you by your client is a fraud?” To which Mr. Redmond's attorney reportedly admitted. The trial judge scheduled a January 2017 hearing to consider whether to impose sanctions. 

Following the hearing, the trial judge ordered Mr. Redmond to produce "the name of the hospital(s) that treated him for the alleged injury he suffered in November 2015," and his counsel was instructed to "obtain records 'from the identified hospital(s) in admissible form.'" The records were reviewed by the trial judge in March 2017 and the judge then "granted the defendant’s motion for sanctions and dismissed all of the appellants’ claims." In the order, the trial judge found the medical letter "is fraudulent," and that it "and related claims of injuries suffered by Jerry Redmond were used to unnecessarily and unreasonably delay proceedings in this case . . .."

The trial judge further found that Mr. "Redmond's sworn testimony regarding the Hyber Letter during the hearing held on January 3, 2017, was not truthful." The judge concluded that Mr. Redmond "failed to fully comply with the Court’s orders made from the bench," and the "written order signed February 6, 2017." The judge concluded that "the Plaintiffs have abused or violated the discovery process, the Texas Rules of Civil Procedure, and the Texas Disciplinary Rules of Professional Conduct."

The Texas court explained the foundation of "sanctions" there, that a 

"sanction is just if there is a direct relationship between the offensive conduct and the sanction imposed and it is not excessive." 

For the "direct relationship," it explained the sanction must remedy "the prejudice caused to the innocent party." The second element is a constraint that the "discovery sanction imposed should be no more severe than necessary to serve its legitimate purposes." That is, "a sanction is excessive if lesser sanctions would have served the purposes of compliance, deterrence, and punishment."

The Court noted that before a dismissal is deemed appropriate, the trial court must have "considered the availability of lesser sanctions." There is a requirement that "lesser sanctions must first be tested to determine their efficacy" in all "but the most egregious and exceptional cases." The consideration of "appropriate lesser sanction" and "an explanation of the appropriateness of the sanction imposed” are required in the trial court's dismissal. 

The Court noted multiple examples in which dismissal had been upheld, including "a false affidavit of indigence," "manufacturing evidence related to damages," "destroyed audio tapes which went to the heart of the proof needed," "produced false contract documents," "testifying falsely and misleadingly," "committed perjury" and others. It concluded that the "trial court clearly had the discretion to sanction Redmond because of the Hyber letter, including the potential use of" dismissal. 

However, the Court noted that the trial judge's 

"order, however, does not state that lesser sanctions were considered, how the sanctionable conduct bore direct relevance to the claims of plaintiffs Redmond Legal Group, PLLC, and Jerry Redmond, Jr., or why fabricating and submitting the Hyber letter justified a presumption that the claims of plaintiffs Redmond Legal Group, PLLC, and Jerry Redmond, Jr., lacked merit."

The Court reversed the dismissal and remanded the case for "further proceedings."

This could lead some to conclude that the Court of Appeals condoned misrepresentation. But, the point of the decision is two-fold. First, that before imposing sanctions, judges should follow a set analysis of what sanction is justified by the complained of behavior. Second, the trial court has to take the time to explain the offense, the analysis of considering appropriate sanction, and the supporting facts or conclusions for the ultimate decision. 

The Texas Court of Appeals reversed because the analysis and supporting conclusions in this instance were not clear. That is a reminder as to process, not an endorsement of the complained of behavior.