Texas Supreme Court mandates specific evidence to support sanction award

The Texas Supreme Court recently remanded a sanctions award back to the trial court for insufficient evidence. In Nath v. Tex. Children’s Hospital et. al., No. 17—0110, the trial court awarded sanctions in the amount of approximately $1.4 million to Defendants Texas Children’s Hospital and Baylor College of Medicine for their attorney’s fees in defending against a frivolous lawsuit by Plaintiff Nath.

This case has a complex procedural history: the trial court first ordered the same amount in attorney’s fees as a sanction but the Texas Supreme Court remanded the case back to the trial court to analyze what role, if any, Defendants’ attorneys played in causing the fees in this case. On remand, Defendants’ attorneys filed affidavits stating that they did not unnecessarily increase their fees or prolong the litigation. Based on these affidavits—and on prior precedent from the Texas Supreme Court—the trial court granted the same $1.4 million in fees that it initially awarded.

The Texas Supreme Court remanded the case back once more, however. This time, the Court was unsatisfied with the trial court’s reliance on conclusory affidavits from Defendants’ attorneys stating that they played no role in unnecessarily increasing the litigation in this case. The Court acknowledged that some Texas Courts of Appeal had misinterpreted the Court’s decision in Brantley v. Etter. There, the Court suggested that sanction awards were within the trial court’s discretion, subject only to abuse of discretion. Etter was misinterpreted to stand for the proposition that evidence, including specific proof of reasonableness,  was not required for a trial court’s award of attorney’s fees as sanctions.

By remanding Nath, the Texas Supreme Court clarified that conclusory affidavits are insufficient to uphold attorney’s fees as sanctions. Instead, parties must be prepared to offer specific evidence in the form of invoices and other documents that evidence the reasonableness of those fees, as opposed to offering mere generalities and conclusory affidavits. As a practical matter, Nath is yet another reason for attorneys to maintain meticulous billing records.

Eric Shalolashvili

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