CPRC Chapter 10 Sanctions: When can they be imposed?

Sanctions Under Chapter 10 of the Texas Civil Practice and Remedies Code Tex. Civ. Prac. & Rem. Code Ann. § 10.001. The trial court found that the petition was signed for an improper purpose and that its implicit assertion that the lawsuit was timely filed under the applicable statutes of limitations was frivolous because it was not warranted by existing law, had no basis in fact, or was unlikely to have any basis in fact. Although Rule 13 requires a party to have filed a groundless pleading brought in bad faith or a groundless pleading for harassment, sanctions under Chapter 10 can be awarded if the suit was filed for an improper purpose, even if the suit was not frivolous. Save Our Springs Alliance, Inc., 198 S.W.3d at 321. Compare Tex. R. Civ. P. 13 with Tex. Civ. Prac. & Rem. Code Ann. § 10.001. We construe the phrase “improper purpose” as the equivalent of “bad faith” under Rule 13. See Tex. R. Civ. P. 13; Save Our Springs Alliance, Inc., 198 S.W.3d at 321. For the reasons stated earlier in this opinion, there is no evidence of an improper purpose. Under Section 10.001, the signer of a pleading certifies that each claim and allegation is based on the signatory’s best knowledge, information, and belief, formed after reasonable inquiry. Low, 221 S.W.3d at 615. Each allegation and factual contention in a pleading must have, or be likely to have, evidentiary support after a reasonable investigation. Id. In Low, the Texas Supreme Court found sanctions were justified when the petition claimed physicians prescribed the drug Propulsid to White. White’s attorney was in possession of White’s medical records before he filed the lawsuit; those records did not indicate that the physicians prescribed or administered the drug to White. Id. at 616. Further, both physicians filed affidavits swearing that they did not in any way provide Propulsid to White. Id. at 617. The evidence, therefore, supported the trial court’s conclusion that the allegations against the physicians were without evidentiary support. Chapter 10 provides that: The signing of a pleading or motion as required by the Texas Rules of Civil Procedure constitutes a certificate by the signatory that to the signatory’s best knowledge, information, and belief, formed after reasonable inquiry: (1) the pleading or motion is not being presented for any improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation; (2) each claim, defense, or other legal contention in the pleading or motion is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) each allegation or other factual contention in the pleading or motion has evidentiary support or, for a specifically identified allegation or factual contention, is likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) each denial in the pleading or motion of a factual contention is warranted on the evidence or, for a specifically identified denial, is reasonably based on a lack of information or belief. SOURCE: Texarkana Court of Appeals - 06-10-00080-CV - 4/1/11