In re Mize

558 S.W.3d 187

In the MATTER OF the Marriage Peggy J. MIZE and Lester D. Mize

No. 06-17-00108-CV

Court of Appeals of Texas, Texarkana.

Date Submitted: June 27, 2018

Date Decided: August 1, 2018

Troy A. Hornsby, Miller, James, Miller & Hornsby, LLP, 1725 Galleria Oaks Drive, Texarkana, TX 75503, for appellant.

Scott P. Stolley, Stolley Law, PC, 4810 Purdue Ave., Dallas, TX 75209, Michael J. Collins, The Collins Law Group, 8350 N. Central Expwy, Ste. 950, Dallas, TX 75206, for appellee.

Before Morriss, C.J., Moseley and Carter,^* JJ.

OPINION

Bailey C. Moseley, JusticeOn June 16, 2015, Peggy J. Mize petitioned to divorce her husband, Lester D. Mize, who filed his own counterpetition for divorce. Each party faulted the other for the breakup in the marriage, sued for spousal tort and fraud, and made claims for reimbursement from the community estate. Additionally, Lester asserted a claim for malicious prosecution against Peggy for filing "blatantly false" criminal charges for family violence assault.

While these criminal charges were pending, Lester refused to answer many questions propounded to him during a deposition on the ground that the answers might tend to incriminate him and thus violate his Fifth Amendment rights. In response to Peggy's motion for sanctions against Lester for his refusal to answer questions during the deposition, the trial court prohibited Lester from introducing any evidence in support of his requests for affirmative relief and barred him from testifying at the final hearing. As a result of those sanctions, the trial court granted partial summary judgment in favor of Peggy and then struck Lester's then-amended counterpetition. After a brief hearing, in which Lester did not testify, the trial court entered a final divorce decree that determined, among other things, that Peggy was entitled to a disproportionate share of the community property based on Lester's actions as described in Peggy's motion for summary judgment and that the community estate was required to reimburse Peggy $149,321.00 for separate contribution.

On appeal, Lester argues that the trial court erred in imposing death penalty sanctions against him. Because compliance with TransAmerican¹ was not demonstrated on the record, we reverse the trial court's judgment, render judgment deleting the assessed sanctions against Lester, and remand the case for further proceedings consistent with this opinion.

I. Factual and Procedural Background

Among other things, Peggy's petition alleged that Lester had assaulted her, committed adultery, secreted community assets, fraudulently written checks to third parties which he cashed himself, and conveyed community assets to his sister. Lester alleged that Peggy had also secreted community assets by purporting to invest them in her closely held real estate business and had filed false charges for family violence assault. He filed a no-evidence motion for summary judgment alleging that Peggy had no evidence either that the divorce was his fault or that she was entitled to a claim for reimbursement.

Peggy noticed Lester's deposition for March 27, 2017. On February 20, 2017, Lester's attorney wrote to Peggy's attorney stating that "scheduling Mr. Mize's deposition with criminal charges pending might be futile inasmuch as his criminal attorney will most likely advise him to plead the fifth [sic]." On March 2, 2017, Lester's attorney again wrote, "[A]s I advised previously, Mr. Mize's criminal case is scheduled for a hearing on April 5, 2017[,] and scheduling depositions would more than likely be a waste of time at this point." Lester and his attorney arrived at the March 27 deposition, but were not accompanied by his criminal attorneys.

During his deposition, Lester stated that he never assaulted Peggy, never committed adultery, and did not hide assets during the marriage. However, he refused to answer many questions on the basis that his answer would incriminate him with respect to pending charges, possible criminal charges, and even other matters that were not covered by the Fifth Amendment privilege. As an example, Lester invoked the Fifth Amendment when asked the following:

• "Did you write checks where you were buying assets that didn't exist?"

• "Did you move the $300,000 to your sister or open that account in 2014?"

• "Have you ever written a check ... and cashed it yourself?"

• "Well, you do realize that by doing what you did with the check, it is against the law?"

• "What medication have you taken in the last week?"

• "So you're telling me that your income tax returns do not reflect what you really earned; is that right?"

• "How much did you declare in income for 2016?"

• "You said you had five lawyers that have worked for you in this case...." "How did you pay you [sic] lawyers?"

• "Do you still have the money in your bank account?"

• "You claim she did something at fault to break up your marriage.... What did she do?"

• "[W]here are all your assets?"

• "Have you transferred any assets to your sister during this case?"

• "And you specifically were not required to take early retirement from DPS a result of impropriety and the use of an electric meter in your house, were you?"

• "You've never purchased any livestock from Carol Van Zandt or Andrew Gamble, right? .... And that's because you wrote bogus checks to them, didn't you?"

• "And you're telling the Court that you don't believe you ever placed your hands on Ms. Mize in a way that she would have felt threatened?"

• "You called Ms. Mize a b[* * * *] and other derogatory names on numerous occasions during your marriage?"

• "Have you attempted to hide assets from Peggy?"

Throughout the deposition, although he later answered several questions related to his financial information, Lester repeatedly indicated, "I'm going to claim my Fifth Amendment, I guess, anything that has to do with financials, anything."² When shown a list of property, the following discussion ensued between Lester and Peggy's counsel and was highlighted in Peggy's motion for sanctions:

Q So you're not going to be able to testify at the time of trial on the value of any of the assets on Exhibit No. 7 is what you're saying?

A No, I'm not saying that.

Q Well, today, I'm asking you questions, the same as if you were in open court giving testimony. And if you aren't going to answer them today, I'm going to argue you can't answer them then, so you are going forward of your own risk, so I'm making sure you know what I'm doing. I'm asking you whether you agree or disagree with those values on Exhibit No. 7. Do you understand my question?

A I'm going to decline based on my Fifth Amendment right.

....

Q So if I ask you line for line whether this value placed here is accurate, you're not going to answer that; is that a fair statement?

A That's a fair statement.

Q All right. And at the time of trial, you're not going to be able to answer them either; do you understand that?

A No. I will answer them at the time of trial.

Q Well, sir, so what you're saying is you're taking the Fifth Amendment today and you intend to take a different position at the time of trial?

A Yes. I'm not going to be badgered in a—in a trial.

Q So you're doing this solely to block discovery, is what you're saying, so I won't be able to find out what your values are until we go to trial?

A That's correct.

Q You understand the Court can sanction you for your actions?

A I don't know what you mean by that.

Additionally, Lester also refused to identify documents, including cancelled checks which had been produced to Peggy's counsel. Several times during the deposition, Lester stated that his refusal to answer was based "[o]n advice of counsel."³ He stated, "If it's not involved in my criminal case—if it's involved in my—this criminal case, my counsel has advised me not to answer any questions based on my—I take the Fifth." The deposition does not reflect that Lester's civil attorney, who was present at the deposition, or opposing counsel made an effort to explain why Lester could not invoke the Fifth Amendment with respect to many of the propounded questions.⁴

On May 4, 2017, Peggy filed a motion for sanctions on the ground that Lester was wrongfully attempting to block discovery through his improper invocation of the Fifth Amendment "approximately 100 times" during the deposition. Among other items of relief, the motion requested that the trial court sanction Lester by striking his pleadings, rendering default judgment against him, barring any of his claims for affirmative relief, and disallowing him to present any evidence at trial and barring his opposition "on issues about which he took the Fifth Amendment at his deposition." After Lester responded to the motion for sanctions, the trial court held a hearing on the matter.

During the May 12, 2017 hearing, Lester's counsel admitted the February 20 and March 2 letters and stated that she had several conferences with Peggy's attorney warning that Lester had been advised to plead the Fifth Amendment. Lester's counsel further stated that he was anxious and frightened and had refused to answer questions "regarding not only the pending criminal case but potential criminal cases that Mrs. Mize continues to bring to the authorities to have additional charges filed against Mr. Mize." She assured the trial court that Lester was not attempting to thwart discovery and urged the trial court not to strike his pleadings. The trial court concluded:

[T]he Court finds that Respondent does have an absolute right to invoke his Fifth Amendment privilege; however, the Court finds in this case he has invoked the privilege and is subterfuge to abuse the discovery process. After considering the appropriate [sic] and limiting the sanctions with regard to Respondent's conduct, the Court is going to prohibit Respondent from testifying in the final hearing in this matter. In addition, Respondent will be prohibited from introducing any evidence on his affirmative request for relief in his pleadings.

Those oral findings were memorialized...