Sheridan v. C. G. Haydon

1

Anthony Sheridan; Sheridan Marketing Group, Inc. d/b/a SMG Construction; Robert Sheridan; and Linda Sheridan, Appellants v. C. G. Haydon d/b/a Haydon Concepts, Appellee

No. 03-22-00173-CV

Court of Appeals of Texas, Third District, Austin

August 25, 2023

FROM THE 391ST DISTRICT COURT OF TOM GREEN COUNTY NO. D150318C THE HONORABLE BRAD GOODWIN, JUDGE PRESIDING

Before Justices Baker, Kelly, and Smith

MEMORANDUM OPINION

Thomas J. Baker, Justice.

Appellants Anthony Sheridan, Sheridan Marketing Group, Inc. d/b/a SMG Construction (SMG), Robert Sheridan, and Linda Sheridan^[1] appeal from the trial court's summary judgment in favor of appellee C.G. Haydon d/b/a Haydon Concepts (Haydon) on Haydon's claims stemming from a dispute about construction services. For the following reasons, we affirm the trial court's final summary judgment.

BACKGROUND

In July 2015, Haydon filed an Original Petition and Alternative Motion to Enforce Rule 11 Agreement alleging that on June 29 2011, he and SMG executed a valid and enforceable settlement agreement and promissory note (Settlement) to settle pending litigation (the 2008 Lawsuit) between them. The 2008 Lawsuit stemmed from SMG's alleged nonpayment to Haydon for labor and materials with respect to two construction contracts for which SMG had hired Haydon as a subcontractor or construction manager. The contracts involved the construction of a home for Anthony's parents, Robert and Linda. The Settlement allegedly required SMG to pay Haydon $13,500.00 plus accrued interest on November 25, 2011, and required Haydon to nonsuit his claims against Anthony and SMG. Pursuant to the Settlement, Robert personally guaranteed SMG's obligation.

In his live petition, Haydon alleged that he nonsuited his claims as required by the Settlement but that SMG failed to make the required payment to him. He alleged that Anthony, Robert, and Linda-each of whom is an officer and/or director of SMG-acted in concert to fraudulently induce him into signing the Settlement with no intention of abiding by its terms and that he suffered damages thereby, including forgoing his damages by nonsuiting his claims. Haydon asserted causes of action for breach of contract, fraud, and civil conspiracy and also sought a declaratory judgment that he has a valid and enforceable mechanic's and materialman's lien on the subject property. Haydon sought actual and consequential damages and attorney's fees and requested alternatively "if and only if he "does not recover his actual and consequential damages," that the court enforce a May 17, 2011 Rule 11 Agreement as a judgment jointly and severally against Anthony and SMG.

The parties filed competing motions for summary judgment. Appellants asserted in their motion, among other arguments, that Linda and Anthony are not personally liable under Section 21.223 of the Texas Business Organizations Code and that Haydon's claims are barred by res judicata. In his motion, Haydon argued that he was entitled to summary judgment as to liability and damages with respect to each of his claims because there is no genuine issue of material fact as to any of them. He attached to his motion his affidavit and that of his attorney, copies of several supporting documents (e.g., the Settlement agreement and guarantee), the deemed admissions of each defendant, see Tex. R. Civ. P. 198.2, and an expert report on damages prepared by Carolyn McKee, CPA. Appellants did not object to any of Haydon's summary-judgment evidence. Haydon additionally filed a motion for sanctions asserting that appellants had failed to respond to or answer any of his discovery requests and requesting, among other relief, that appellees be prohibited from introducing (a) any evidence that is contrary to the admissions that are considered deemed by their failures to respond and (b) any evidence that appellees could have produced or introduced in response to the discovery requests.

On February 24, 2020, the trial court conducted a hearing on Haydon's motions for summary judgment and for sanctions.^[2] On December 17, 2021, the trial court rendered its Order Granting Plaintiffs Motion for Summary Judgment and Final Judgment. Among its recitations, the order states that the trial court "finds that a [sic] consequence of the failure of all Defendants to serve on Plaintiff any response to Plaintiffs discovery requests and all Defendants' failure to serve on Plaintiff, on or before September 18, 2019, any of the items listed as part of the Pre-Trial Exchange pursuant to the Court's Scheduling Order of January 28, 2019, all Defendants are prohibited from presenting any evidence." The order also granted Haydon's summary-judgment motion, without specifying the basis therefor, and rendered judgment for him as follows: (1) the recovery from SMG and Robert, jointly and severally, of $13,500.00 in damages, plus pre- and post-judgment interest thereon; (2) the recovery from Anthony and Linda, jointly and severally, of $123,082.16 in damages, plus pre- and post-judgment interest thereon; (3) the recovery of court costs from all four defendants, jointly and severally; and (4) the recovery from SMG and Robert of $60,000 in attorney's fees, plus interest, and conditional appellate attorney's fees. After filing a motion for new trial, appellants timely perfected this appeal challenging the trial court's summary judgment and exclusion of their evidence.

DISCUSSION

We review de novo the trial court's summary judgment see Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005), and its exclusion of appellants' evidence for an abuse of discretion, see Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 442 (Tex. App-Austin 2009, no pet.). Appellants raise six issues.

We address appellants' third issue first because it affects our review of other issues. In their third issue, appellants contend that the trial court erred in excluding all of their evidence because it was effectively a "death-penalty sanction," which was unjust under the circumstances because it did not meet the requirements of Texas Rules of Civil Procedure 215.2(b) and 215.3. See Tex. R. Civ. P. 215.2(b) (allowing "just" sanctions for failure to comply with discovery requests or discovery orders), 215.3 (providing for sanctions if party abuses discovery process); TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, (Tex. 1991) (noting that courts follow two-part test in determining whether particular sanction for discovery abuse is just). However, as Hay don responds, the trial court's sanction was automatic under Rule 193.6(a). See Tex. R. Civ. P. 193.6(a) ("A party who fails to make, amend, or supplement a discovery response, including a required disclosure, in a timely manner may not introduce in evidence the material or information that was not timely disclosed, or offer the testimony of a witness (other than a named party) who was not timely identified . . . ."); F 1 Construction, Inc. v. Banz, No. 05-19-00717-CV, 2021 WL 194109, at *2 (Tex. App-Dallas Jan. 20, 2021, no pet.) (mem. op.) (distinguishing Rule 215 sanctions, which are discretionary, from Rule 193.6 penalty, which is automatic and not discretionary, and providing that court's imposition of latter type "is not reviewed under a TransAmerican death penalty sanction analysis").

The automatic exclusion under Rule 193.6(a) applies to summary-judgment proceedings, and a trial court's exclusion of evidence thereunder, when the sanctioned party has not met its burden to prove an exception, is not an abuse of discretion. See Fort Brown Villas III Condo. Ass'n v. Gillenwater, 285 S.W.3d 879, 880 (Tex. 2009); Mancuso v. Cheaha Land Servs., LLC, No. 2-09-241-CV, 2010 WL 3193317, at *3-4 (Tex. App-Fort Worth Aug. 12, 2010, no pet.) (mem. op.). Appellants point to nothing in the record evidencing that they timely complied with or responded to Haydon's discovery requests or asked the court to make an exception to the mandatory sanction. We accordingly overrule appellants' third issue.

In their first issue, appellants contend that the trial court erred in "failing to grant [their] affirmative defense of Res Judicata." See Tex. R. Civ. P. 94 (identifying res judicata as affirmative defense). Res judicata requires proof of three elements: (1) a prior final judgment on the merits by a court of competent jurisdiction, (2) identity of parties, and (3) a second action based on the same claims as were raised or could have been raised in the first action. Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 225 (Tex. 2022). A party opposing summary judgment by relying on an affirmative defense must come forward with summary-judgment evidence sufficient to raise a fact issue on each element of the defense to avoid summary judgment. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984). Furthermore, a party seeking summary judgment based on an affirmative defense must conclusively establish each element of the defense. American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997).

Although appellants attached two affidavits to their motion for summary judgment, they did not present evidence relevant to any of the elements of their affirmative defense, such as the judgment and pleadings from the prior lawsuit. See Walker v. Sharpe, 807 S.W.2d 442, 447 (Tex. App-Corpus Christi-Edinburg 1991, no writ) ("A party asserting the defense of res judicata has the burden to present sufficient evidence to establish that it should apply, including the judgment and pleadings from the prior suit."). Moreover even had appellants proffered such evidence, they could not have relied on it because, as we have already determined, the trial court properly excluded all of their evidence. We overrule appellants' first...