1001 West Loop LP, Galleria Loop Note Holder, LLC, 1001 WL GP, LLC, and 1001 WL, LLC v. Boxer Property Management Corporation

Affirmed and Memorandum Opinion filed July 2, 2024.

In The

Fourteenth Court of Appeals

NO. 14-23-00120-CV

1001 WEST LOOP LP, GALLERIA LOOP NOTE HOLDER, LLC, 1001 WL
GP, LLC, AND 1001 WL, LLC, Appellants
V.

BOXER PROPERTY MANAGEMENT CORPORATION, Appellee

On Appeal from the 157th District Court
Harris County, Texas
Trial Court Cause No. 2019-85300

MEMORANDUM OPINION

Appellants 1001 West Loop LP, Galleria Loop Note Holder, LLC, 1001 WL
GP, LLC, and 1001 WL, LLC challenge a default judgment entered against them
after the trial court struck their pleadings for discovery abuses. In issue one, appellant
1001 WL GP contends it should not be subject to the same sanctions as the remaining
appellants. In issue two appellants challenge the trial court’s denial of their motion
for continuance of the hearing on appellee’s fifth motion to strike their pleadings. In
the remaining four of their six issues appellants contend the trial court’s imposition
of death-penalty sanctions constituted an abuse of discretion. We affirm.

BACKGROUND

The Parties and the Contract

In July 2018 appellee Boxer Property Management Corporation entered into
a “Management and Leasing Agreement” (Management Agreement) with appellants
1001 WL, LLC, and 1001 West Loop, LP to “operate, lease and manage” a
commercial office building located at 1001 West Loop South in Houston (the
Property). The sole function of appellant 1001 WL GP, LLC was to act as a general
partner for 1001 West Loop, LP. Ali Choudhri is 1001 WL GP’s president and was
originally designated as corporate representative for all appellants.

On November 27, 2019, Boxer filed an original petition in which it alleged it
had performed its obligations under the contract but appellants 1001 WL, LLC, and
1001 West Loop, LP stopped paying under the contract. Boxer sought damages for
breach of contract and foreclosure of its mechanics lien from 1001 WL, LLC, 1001
West Loop, LP, and the general partner 1001 WL GP.

Foreclosure of the Property

Boxer later learned that one month before it sent notice of its election to
terminate the Management Agreement, Galleria Loop Note Holder LLC purchased
the Property through foreclosure. 1001 West Loop obtained loans from MidFirst
Bank in 2012 and 2014 to purchase the Property. Lee v. Galleria Loop Note Holder
LLC, No. 01-22-00160-CV, 2023 WL 5436434, at *1 (Tex. App.—Houston [1st
Dist.] Aug. 24, 2023, no pet.) (mem. op.). By May 2019, six months before Boxer
filed its original petition, 1001 West Loop had defaulted on the loans. Id. Appellant
Galleria Loop Note Holder LLC (Galleria) purchased the defaulted loans, and on

2
May 30, 2019, issued a written resolution stating that Galleria and its sole owner had
entered into a loan agreement with Choudhri, and appointed Choudhri as the chief
executive officer of Galleria, authorizing him to take action to execute and deliver
the loan documents. Id. The next day Choudhri entered into a membership interest
option agreement granting him a call option to purchase 100% of the membership
interest in Galleria. Id. The same day, Galleria purchased the senior liens from
MidFirst Bank, effectively making Galleria the senior lienholder on the Property. Id.
Galleria subsequently foreclosed on the liens, then was the only bidder at the
foreclosure sale. Id. at *2. Hours after Galleria acquired the property, Choudhri
exercised the option to purchase all of the membership interest in Galleria. Id.
Afterward, no proceeds remained from the foreclosure sale to pay off the junior liens.
Id. Essentially, Choudhri, as owner of the Property and Galleria, was able to
purchase the property at foreclosure leaving no funds to be paid to junior lienholders,
including Boxer. On August 27, 2020, Boxer amended its petition adding Galleria
as a defendant and alleging claims of fraudulent transfer, successor liability, and
transferee liability against Galleria.

First Motion to Compel Discovery

On April 12, 2021, Boxer filed its first motion to compel discovery. Boxer
had served its first requests for production and interrogatory requests on October 20,
2020. The discovery requests were sent to all defendants except 1001 WL GP (the
General Partner). On March 18, 2021, appellants’ counsel withdrew, and new
counsel was substituted. Appellants responded to Boxer’s interrogatories, but Boxer
alleged appellants’ responses were “severely and objectively lacking in substance,
while also purportedly subject to numerous irrelevant objections.”

On May 14, 2021, the trial court held a non-evidentiary hearing on Boxer’s
motion to compel. Boxer’s counsel asserted it had received no document production

3
and very few responses to the interrogatories. Appellants objected to the document
requests and interrogatories as overbroad and irrelevant. On May 14, 2021, the trial
court signed an order granting Boxer’s motion to compel, and overruling appellants’
objections to discovery. The trial court ordered appellants to submit complete
responses to Boxer’s discovery within 30 days of the date of the order. The trial court
also issued a subpoena duces tecum to the custodian of records to produce the
“books, papers, documents, or other tangible things” requested by Boxer.

Second Motion to Compel Discovery

On June 25, 2021, Boxer filed its second motion to compel discovery and
requested sanctions. Although appellants amended their responses to discovery,
Boxer alleged their responses were “still non-existent or sorely deficient.” Boxer
alleged appellants failed to produce any documents. Many of appellants’ responses
to production simply stated, “Responsive documents will be produced.” Boxer
requested a second order requiring compliance and requesting sanctions of $2,000
as reimbursement for its attorney’s fees incurred in pursuing discovery.

On July 16, 2021, the trial court granted Boxer’s motion and required
appellants to comply with its May 14, 2021 order compelling discovery within 15
days. The trial court also assessed $2,000 as sanctions for fees caused by the failure
to comply with the rules of discovery and the court’s order. There is no record of a
hearing on Boxer’s second motion to compel.

Third Motion to Compel Discovery

On September 10, 2021, Boxer filed a third motion to compel seeking
discovery sanctions including an order striking appellants’ pleadings. Boxer alleged
appellants not only failed to comply with the court’s first two orders but also failed
to comply with a second set of discovery requests, a request for a privilege log, and

4
a request for disclosure. Appellants also failed to pay the previously ordered $2,000
in sanctions.

On November 8, 2021, the trial court held a hearing on Boxer’s third motion.
At the hearing, appellants had engaged new counsel because their previous counsel
had passed away since the last hearing. Acknowledging that new counsel needed
time to become acquainted with the case, the trial court gave appellants an additional
30 days to comply with the discovery orders.

Several months later, on March 13, 2022, appellants had still not complied
with the court’s previous two orders. The trial court signed an order for sanctions as
follows:

Today the Court considered the Plaintiff’s Third Motion to Compel
seeking sanctions for the third time for the Defendant’s failure to
comply with discovery and the two prior Court orders on these issues.
The Defendant has again failed to comply with the Court’s orders and
its basic discovery obligations. Nonetheless, Counsel for the Defendant
has represented that all responsive documents have been produced.
Counsel for the Plaintiff appeared at this hearing with evidence that this
statement is not true based on publicly filed documents. As such, the
Court finds that the Defendant is again in violation of the prior orders.
The Court has also sanctioned the Defendant with monetary sanctions,
which have not been paid. The Court therefore finds that monetary
sanctions are insufficient to address these repeated violations.
It is therefore ordered that the Defendant’s pleadings in this case are
struck. This Order will not however become effective if the Defendant
presents a detailed affidavit to the Plaintiff’s counsel within five days
of this Order from the Defendant’s corporate representative describing
all efforts taken to discover, identify, and produce responsive
documents; an identification by Bates Number of all responsive
documents to each request; or alternatively that after such search no
responsive documents can be found.
If Plaintiff is able to demonstrate to the Court that any statement in this
Affidavit is false, the Defendant’s pleadings will remain struck.
The Plaintiff is further awarded $5,000 as sanctions for prosecution of
5
this motion and the last motion in December.

Approximately one month after the trial court issued its order appellants’ new
counsel sought to withdraw citing “irreconcilable differences and unresolvable
conflicts.”

Fourth Motion to Compel Discovery and Second Motion to Strike Pleadings

On April 18, 2022 Boxer filed its second motion to strike appellants’
pleadings and fourth motion to compel discovery responses. In the motion Boxer
stated that during a March 11, 2022 hearing, stand-in counsel acknowledged that
Boxer had noticed appellants’ corporate representatives for depositions. 1 The notice
was served March 4, 2022 for depositions scheduled between March 24 and March
28. At that time Choudhri was appellant’s designated corporate representative. On
March 22, 2022, appellants advised Boxer they were cancelling the depositions
because counsel was in trial on another matter. Despite Boxer’s attempts to
reschedule, appellants provided no alternative dates for depositions. Appellants also
continued to decline to respond to requests for production and interrogatories. Boxer
requested that appellants’ pleadings be struck, or, in the alternative, that appellants
be ordered to produce their corporate representative for deposition.

On May 13, 2022, the trial court held a hearing on Boxer’s motion. At the
hearing Boxer’s counsel acknowledged that Choudhri had provided an affidavit as
required by the trial court’s third order. The trial court asked whether the affidavit
was false, and Boxer’s counsel replied that he needed to take Choudhri’s deposition
before he could determine whether the affidavit was false. The trial court allowed
appellants’ previous counsel to withdraw, and appellants’ new counsel appeared at
the hearing. On the record, the trial court overruled appellants’ objections to

1
A record of the March 11, 2022 hearing, if one was made, was not filed with the record
in this appeal.

6
discovery and ordered them to respond to new requests for production and
interrogatories within four days. The trial court further ordered appellants to present
their corporate representative for deposition.

Following the hearing, Boxer coordinated with appellants’ counsel and
noticed appellants’ corporate representative deposition for May 19, 2022. Two hours
before the deposition was to take place, appellants’ counsel sent an email informing
Boxer that Choudhri would not appear and the only person available was the current
office manager who was “very new to the company.” Because the office manager
was unprepared, the deposition did not take place.

Boxer subsequently noticed appellants’ corporate representative’s deposition
for August 3, 2022 and August 4, 2022. Boxer further noticed Choudhri’s deposition
as a fact witness on August 5, 2022. Neither the corporate representative nor counsel
appeared for the deposition scheduled August 3. The next day Boxer filed its third
motion to strike appellants’ pleadings. Later that day appellants’ counsel informed
Boxer that corporate representatives had not been designated or prepared as counsel
was ill.

Third Motion to Strike Pleadings

In response, on August 4, 2022, Boxer filed a third motion to strike appellants’
pleadings on the grounds that appellants continued to resist discovery and failed to
present a corporate representative and/or Choudhri for deposition. On August 19,
2024, the trial court held a hearing on Boxer’s motion. On the record, the trial court
acknowledged that an order compelling discovery was issued May 14, 2021 because
appellants failed to provide “even the most basic responses.” In July 2021, monetary
sanctions were assessed for failure to comply with discovery. The trial court further
acknowledged that a third sanctions order issued in March 2022, and that as far back
as 2021 Choudhri had been appellants’ designated corporate representative. Boxer’s
7
counsel told the court that he had prepared for 12 depositions in which appellants
had not appeared. At the conclusion of the hearing the trial court decided to hold on
Boxer’s motion to strike appellants’ pleadings to give Boxer an opportunity to
depose Choudhri to explore whether Choudhri’s representations in his affidavit were
accurate.

The trial court signed an order August 31, 2022 in which the court denied the
motion to strike appellants’ pleadings and granted the motion for sanctions in part,
stating:

[T]he Court grants the Motion to the extent it seeks sanctions for the
Defendants’ ongoing discovery abuses, including but not limited to, the
failure to schedule and/or appear for depositions. Defendants shall pay
to the Plaintiff $7,500 in sanctions and must appear for a deposition
within 5 days of this Order or other written agreement of the Parties.

Fourth Motion to Strike Pleadings

On September 15, 2022, Boxer filed a fourth motion to strike appellants’
pleadings explaining that despite the court’s previous four orders compelling
discovery and the assessment of monetary sanctions, appellants still failed to respond
to discovery and failed to present a corporate representative and/or Choudhri for
deposition. Boxer further objected to appellants’ attempt to change their designation
of corporate representative. Because Choudhri had produced the affidavit in support
of appellants’ failure to respond to discovery, Boxer objected to appellants’ attempts
to substitute other employees as corporate representatives.

Before the scheduled hearing on Boxer’s motion appellants agreed to schedule
depositions, but changed the designation of their corporate representative from
Choudhri to Jetall Company employees, Scarlet MacGeorge, an office manager, and

8
Dward Darjean, a property manager.2 MacGeorge and Darjean were not employees
of any of the appellant companies. Below are some of the topics Boxer sought to
explore with appellants’ corporate representatives:

1. Defendants’ organizational structures, functions, assets and
corporate status;
2. Past and present ownership, membership, control and
governance of each Defendant, including, but not limited to, the
identities of all related entities and individuals and their positions,
responsibilities and influences;
3. Ownership status and history of the subject Property;
***
12. The basis for Defendants’ refusal to pay and/or contest the
particular sums Plaintiff claims are owed in this lawsuit, and who
made/makes that decision for each Defendant;
***
16. The mechanics lien Plaintiff filed against the subject Property,
Recorded as Harris County Clerk’s File No. RP-2019-385456;
***
18. Transfer of the Property to and/or from any other person or entity
(directly or indirectly) and the related circumstances, including, but not
limited to, Defendants’ default on any promissory notes and the
procedures and notices related thereto, foreclosure of any liens and the
procedures and notices related thereto, sale or attempted sale of the
subject Property and the procedures and notices related thereto, any
monies received or paid incident to such[.]
Boxer proceeded to depose MacGeorge and Darjean and later averred they were
“wholly unprepared to address a broad range of the material topics they were
designated to discuss.”

2
Jetall Company is also owned by Choudhri.

9
Fifth Motion to Strike Pleadings

On November 22, 2022, Boxer filed its fifth motion to strike appellants’
pleadings. In Boxer’s motion, it detailed the previous trial court orders compelling
discovery, the trial court’s monetary sanctions, and appellants’ failure to produce a
designated corporate representative who could provide meaningful responses to
deposition questions. Boxer asserted that appellants’ refusal to produce corporate
representatives who could testify on material topics in addition to appellants’
obstructive actions in response to discovery prevented Boxer from adequately
prosecuting its suit. Boxer sought “death-penalty sanctions” and recovery of its costs
and attorney’s fees.

Appellants responded to Boxer’s fifth motion to strike and asserted that (1)
the motion was filed after the dispositive-motion deadline; and (2) the motion
contained no certificate of conference. The response was filed shortly before
midnight the night before the scheduled hearing on Boxer’s motion.

The trial court held a hearing on Boxer’s fifth motion at which appellants were
represented by substitute counsel because their lead counsel was unavailable. At the
hearing the trial court explained to counsel that the dispositive-motion deadline in
the docketing control order did not apply to a motion to strike pleadings, nor would
a certificate of conference be required because “[t]he other side rarely agrees.”

On December 9, 2022, the trial court signed an order striking appellants’
pleadings. The trial court found Boxer was prejudiced by appellants’ “ongoing and
persistent refusal to comply with the rules of discovery,” concluding there was a
direct relationship between appellants’ conduct and the sanction. The trial court
further stated in the order that it had considered imposition of lesser sanctions but
determined that “such sanctions have not and would not promote . . . compliance or
deter similar conduct.”
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The trial court subsequently granted Boxer’s motion for default judgment
ordering actual damages of $242,056.61, reasonable and necessary attorneys’ fees,
and foreclosure of Boxer’s mechanic’s and materialmen’s lien. This appeal
followed.

ANALYSIS

In six issues appellants challenge the trial court’s order striking their
pleadings. In their first issue appellants assert the trial court abused its discretion by
imposing the same sanctions against the General Partner as against 1001 WL, 1001
West Loop, and Galleria. In their second issue appellants assert the trial court erred
in denying their motion for continuance of the hearing on Boxer’s fifth motion to
strike. In issues three through six appellants assert the trial court abused its discretion
in imposing sanctions (3) that were more severe than necessary; (4) for failure of the
corporate designee to appear for deposition; (5) without proof that Boxer could not
prepare for trial without adequate discovery; and (6) without justification that
appellants’ claims and defenses lacked merit.

I. Standard of Review

We review the trial court’s discovery sanctions for abuse of discretion. See
Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006) (per curiam);
Khan v. Valliani, 439 S.W.3d 528, 533 (Tex. App.—Houston [14th Dist.] 2014, no
pet.). The test for abuse of discretion is whether the trial court acted without
reference to any guiding rules and principles, or whether the act was arbitrary or
unreasonable. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42
(Tex. 1985).

In reviewing a sanctions order, we ordinarily look to the trial court’s formal
findings of fact. Wade v. Farmers Ins. Group, No. 14-01-00691-CV, 2002 WL

11
1404713, at *2 (Tex. App.—Houston [14th Dist.] June 27, 2002, no pet.) (mem. op.).
In the absence of formal findings, we will look to the trial court’s statements in the
sanctions order. Id. In this case, formal findings of fact were not requested, but the
trial court’s order recites facts and findings supporting the imposition of sanctions.

II. Sanctions assessed against the General Partner
For the first time on appeal appellants assert in their first issue that the trial
court abused its discretion in imposing the same sanctions against the General
Partner as against the other appellants because Boxer did not independently serve
the General Partner with discovery requests as it was not a party to the Management
Agreement.

We conclude the General Partner waived its right to raise this issue on appeal.
The record reflects that all defendants filed a joint answer to Boxer’s petition. The
General Partner did not file separate pleadings. To preserve a complaint on appeal,
Rule 33.1 of the Rules of Appellate Procedure requires the record to show that a
specific complaint was made to the trial court by a timely request, objection, or
motion, and that the trial court ruled on that request, objection, or motion. Tex. R.
App. P. 33.1(a). Thus, when a party is informed of the trial court’s intent to rule on
a sanctions motion at a hearing, the party is required to raise an objection to a lack
of service of discovery at that time. McCollum v. The Bank of New York Mellon Tr.
Co., 481 S.W.3d 352, 359 (Tex. App.—El Paso 2015, no pet.). The General Partner
did not object to the trial court’s assessment of sanctions on the grounds that it had
not been served with discovery requests. Moreover, the General Partner did not file
separate pleadings from the other defendants.

Because the General Partner failed to object to the same sanctions being
assessed against it as the other defendants, the General Partner waived error with
regard to its first issue. We therefore overrule appellants’ first issue.

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III. Motion for Continuance

In appellants’ second issue they contend the trial court abused its discretion in
denying their motion to continue the hearing on Boxer’s fifth motion to strike their
pleadings. To recap, Boxer filed its fifth motion to strike appellants’ pleadings on
November 22, 2022. That same day Boxer filed a notice of oral hearing giving notice
that a hearing was scheduled at 11:00 a.m. on December 9, 2022. Two minutes
before midnight on December 8, appellants filed a response to Boxer’s motion and
a motion to reset the hearing. In the response appellants alleged Boxer’s motion
should be struck because it was filed beyond the dispositive-motion deadline set by
the docket control order, and it did not contain a certificate of conference. Appellants
requested a continuance of the hearing for those reasons and because appellants’
counsel was scheduled for trial in another county.

At the hearing the next morning appellants were represented by stand-in
counsel who informed the court that appellants’ lead counsel filed a response to
Boxer’s motion the night before. The trial court stated that no response had been
filed. Appellants’ lead counsel sent an email to the court and purportedly attached a
response, but, according to the trial court, the attachment was actually a copy of
Boxer’s motion, not a response to it. The trial court did not specifically rule on the
motion for continuance but the court granted Boxer’s motion to strike appellants’
pleadings.

On appeal Boxer contends appellants waived a challenge to the denial of their
motion for continuance because the trial court did not explicitly rule on their motion.
We conclude, however, that the trial court implicitly denied appellants’ motion for
continuance when it proceeded with the hearing on Boxer’s motion to strike
pleadings and then granted that motion. See EM Bldg. Contractors Services, LLC v.
Byrd Bldg. Services, LLC, No. 05-19-00153-CV, 2020 WL 4592791, at *4 (Tex.

13
App.—Dallas Aug. 11, 2020, no pet.) (holding trial court implicitly denied motion
for continuance when it proceeded with hearing on motion for summary judgment);
cf. Seim v. Allstate Tex. Lloyds, 551 S.W.3d 161, 166 (Tex. 2018) (per curiam)
(noting that a ruling may be implied if the implication is “clear”). We review whether
the trial court abused its discretion in denying the motion to continue the hearing.

No continuance may be granted “except for sufficient cause supported by
affidavit, or by consent of the parties, or by operation of law.” Tex. R. Civ. P. 251.
We review the denial of a motion for continuance under the abuse-of-discretion
standard. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 161 (Tex. 2004);
Matter of Marriage of Moncur, 640 S.W.3d 309, 320–21 (Tex. App.—Houston
[14th Dist.] 2022, no pet.). On appeal, appellants allege the trial court abused its
discretion because Boxer’s motion did not contain a certificate of conference as
required by local rule. See Harris (Tex.) Civ. Dist. Ct. Loc. R. 3.3.6 (requiring a
certificate of conference on all motions except summary judgments, default
judgments, agreed judgments, motions for voluntary dismissal or non-suit, post-
verdict motions and motions involving service of citation).3

The purpose of a rule requiring a certificate of conference is to ensure that
parties cooperate during the discovery process and make reasonable efforts to
resolve discovery disputes without the necessity of court intervention. See In re
Alford Chevrolet–Geo, 997 S.W.2d 173, 184 (Tex. 1999) (orig. proceeding);
Centennial Psychiatric Associates, LLC v. Cantrell, No. 14-17-00380-CV, 2017 WL
6544283, at *13 n.17 (Tex. App.—Houston [14th Dist.] Dec. 21, 2017, no pet.)

3
Appellants have not argued, as they did in the trial court, that they were entitled to a
continuance due to counsel’s absence. Absence of counsel is not a ground for a continuance except
at the discretion of the trial court upon cause shown or upon matters within the knowledge or
information of the judge to be stated on the record. See Tex. R. Civ. P. 253; Gendebien v.
Gendebien, 668 S.W.2d 905, 907 (Tex. App.—Houston [14th Dist.] 1984, no writ).

14
(mem. op.). The Texas Supreme Court held that a rule requiring a certificate of
conference “is for the benefit of the trial court,” and declined to grant mandamus
relief due to the failure to require such a certificate. Groves v. Gabriel, 874 S.W.2d
660, 661 n.3 (Tex. 1994).

Similarly, the trial court in this case determined that a certificate of conference
was unnecessary because parties rarely agree to discovery sanctions. The record
reflects that the parties were unable to resolve discovery disputes in this case without
court intervention. Indeed, the court issued multiple orders to compel discovery and
assessed monetary sanctions three times before it denied appellants’ motion for
continuance and struck their pleadings. Moreover, appellants were represented by
stand-in counsel at the hearing on Boxer’s motion to strike. We conclude appellants’
motion was not supported by sufficient cause, and the trial court did not abuse its
discretion in denying the motion for continuance. We therefore overrule appellants’
second issue.

IV. Sanctions Order

A. Preservation of Error

Before proceeding with the analysis of appellants’ remaining issues
challenging the trial court’s order striking their pleadings, we first address Boxer’s
contention that because appellants failed to assert specific arguments in their motion
for reconsideration and failed to obtain a specific ruling on their motion, they have
waived their right to complain of the trial court’s ruling. To preserve error for
appellate review, appellants had to present their complaint to the trial court by a
motion to amend or correct the judgment, a motion for new trial, or some other
similar method. Akhtar v. Leawood HOA, Inc., 525 S.W.3d 814, 820 (Tex. App.—
Houston [14th Dist.] 2017, no pet.). Appellants filed a timely motion for
reconsideration, challenging the trial court’s order striking their pleadings. Thus,
15
appellants preserved their complaint striking their pleadings for appellate review.
See Wade, 2002 WL 1404713 at *2. (party against whom sanctions were imposed
preserved error by filing motion for new trial).

Having determined appellants preserved error, we proceed with analysis of
their challenges to the trial court’s order.

B. Standard of Review and Applicable Law

In TransAmerican Natural Gas Corp. v. Powell, the Texas Supreme Court
created a two-prong analysis to determine if a sanction is just. 811 S.W.2d 913, 916
n. 4 (Tex. 1991). “First, a direct relationship must exist between the offensive
conduct and the sanction imposed.” Id. This means the sanction must remedy the
prejudice caused the innocent party and punish the actual offender, whether that be
the party or its counsel. Id. This first prong also contemplates a showing by the
moving party that it is unable to prepare for trial without the requested discovery.
Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 850 (Tex. 1992). The second prong
in determining if a sanction is “just” is that the sanction must not be excessive.
TransAmerican, 811 S.W.2d at 917. The “punishment should fit the crime.” Id.
Within the second prong, trial courts must consider lesser sanctions before resorting
to death-penalty sanctions, for ultimate sanctions violate due process absent a party’s
flagrant bad faith or counsel’s callous disregard for the discovery process. Id. at 918.
“[D]iscovery sanctions cannot be used to adjudicate the merits of a party’s claims or
defenses unless a party’s hindrance of the discovery process justifies a presumption
that its claims or defenses lack merit.” Id.

We review the trial court’s actions in striking appellants’ pleadings using the
factors set out in TransAmerican to determine whether the sanctions are just, and by
examining the entire record before us to determine whether the trial court’s findings
are supported by the record. See TransAmerican, 811 S.W.2d at 917. We may uphold
16
the trial court’s sanctions award if any of the sanctionable conduct in the order has
support in the record. See Chevron Phillips Chem. Co. P.P. v. Kingwood Crossroads,
L.P., 346 S.W.3d 37, 74 (Tex. App.—Houston [14th Dist.] 2011, pet. denied)
(explaining that when party seeking sanctions asserted that opposing party violated
a discovery order in ten ways, sanctions would be upheld if the record supported any
of the alleged violations) (citing Am. Flood Research, 192 S.W.3d at 583).

In appellants’ remaining issues, they assert the trial court acted arbitrarily,
unreasonably, or without reference to guiding rules or principles by: (1) imposing
sanctions that were more severe than necessary to satisfy legitimate purposes; (2)
sanctioning appellants for the failure of their corporate designee to appear for his
scheduled deposition; (3) continuing to sanction and then striking appellants’
pleadings when Boxer was no longer able to meet its burden to prove it could not
prepare for trial without additional discovery; and (4) striking appellants’ pleadings
because the sanctioned conduct did not justify the presumption that their claims and
defenses lacked merit. We address appellants’ issues in the context of the
TransAmerican factors.

C. Analysis of TransAmerican Factors

1. Sanction must bear direct relationship to the offensive conduct.

The first prong of TransAmerican requires a direct relationship between the
offensive conduct and the sanctions imposed. 811 S.W.2d at 917. The sanction must
remedy the prejudice caused the innocent party and punish the actual offender,
whether that be the party or its counsel. Id. This first prong also contemplates a
showing by the movant that it is unable to prepare for trial without the requested
discovery. Chrysler, 841 S.W.2d at 850. In appellants’ fifth issue on appeal they
challenge the trial court’s sanctions under this first prong asserting the trial court
abused its discretion because Boxer did not prove it was unable to prepare for trial
17
without additional discovery.

Under this issue appellants focus on the trial court’s order that struck
appellants’ pleadings unless they provided an affidavit from a corporate
representative describing all efforts taken to comply with discovery. The order also
provided that if Boxer could demonstrate that any statement in the affidavit was false
the pleadings would remain struck. The records reflect that Choudhri filed an
affidavit purporting to explain the efforts to comply with Boxer’s discovery requests.
When the trial court asked Boxer’s counsel whether the affidavit contained false
statements, counsel responded that he needed to take Choudhri’s deposition before
he could determine whether it was false. The recitations above detail the efforts
undertaken to secure Choudhri’s deposition and Choudhri’s success in blocking
those efforts.

Rather than produce Choudhri, appellants produced employees of one of
Choudhri’s other companies who were unable to provide meaningful answer’s to
Boxer’s deposition questions. The “corporate representatives” had not reviewed
appellants’ written discovery and did not know if appellants possessed the
documents sought to be produced. Appellants’ representatives were unable to testify
regarding the majority of the topics contained in the deposition notices, which were
necessary to investigate appellants’ claims and defenses.

To be sure, it was Boxer’s duty to show the documents and discovery it sought
existed. See Global Services, Inc. v. Bianchi, 901 S.W.2d 934, 937 (Tex. 1995).
However, it is appellants’ burden to produce a sufficient record showing the lack of
evidence or error by the trial court. See Walker v. Packer, 827 S.W.2d 833, 837 (Tex.
1992); Youngs v. Choice, 868 S.W.2d 850, 853 (Tex. App.—Houston [14th Dist.]
1994, writ denied) (holding that a sufficient record must be brought forward to
affirmatively show the error committed by the trial court in imposing sanctions).

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Choudhri, as the author of the affidavit attempting to explain why discovery had not
been produced, deliberately failed to appear at several depositions. Appellants
deliberately failed to respond to discovery requests after being instructed multiple
times to do so. The only representatives produced could not testify to why appellants
had failed to comply with discovery.

Based on the record before us we cannot hold that Boxer failed to carry its
burden to show sanctions were warranted. The trial court found sufficient evidence
that appellants engaged in repeated discovery abuse to strike their pleadings. The
record reveals a direct relationship between the abusive conduct and the discovery
sanctions, and because appellants failed to produce a sufficient record to show
otherwise, the death-penalty sanctions based on this abuse meet the first prong of
TransAmerican. We overrule appellants’ fifth issue.

2. Sanction must not be excessive.

The second TransAmerican factor requires that the sanction not be excessive.
The three elements to consider in determining whether a sanction is excessive are
(1) whether the court considered and/or tested lesser sanctions to see if lesser
sanctions would promote compliance and deterrence and discourage further abuse;
(2) whether the sanctions are no more severe than necessary to satisfy the legitimate
purposes of a sanction (i.e., to secure compliance, to deter others and to punish); and
(3) whether the party’s hindrance of the discovery process justifies a presumption
that its claims or defenses lack merit. Butan Valley, N.V. v. Smith, 921 S.W.2d 822,
831 (Tex. App.—Houston [14th Dist.] 1996, no writ) (citing Chrysler Corp., 841
S.W.2d at 849; TransAmerican, 811 S.W.2d at 917).

In appellants’ third, fourth, and sixth issues they challenge the trial court’s
sanctions order by asserting the court did not consider lesser sanctions, erred in
assessing sanctions for the failure of Choudhri to appear for a deposition, and the
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sanctioned conduct did not justify the presumption that appellants’ claims and
defenses lacked merit. We will address these issues together as they each fall within
the second TransAmerican prong.

The first and second elements of the second prong of TransAmerican require
the trial court to test lesser sanctions before striking a party’s pleadings to determine
whether they are adequate to secure the compliance of the offender, and that
sanctions should be no more severe than necessary to satisfy the legitimate purposes
of sanctions for discovery abuse. In its order, the trial court made a finding that
imposition of lesser sanctions had been assessed and that “such sanctions have not
and would not promote such compliance or deter similar conduct.” The record
supports the trial court’s finding that lesser sanctions would not have promoted
compliance or have been a more fitting punishment for appellants’ discovery abuse.

The trial court not only considered lesser sanctions, i.e., the suggestion that
Choudhri not be permitted to testify at trial unless he appeared for deposition, the
court actually assessed lesser sanctions. Three times, the trial court assessed
monetary sanctions for a total of $14,500 in sanctions. Boxer noticed Choudhri’s
deposition at least three times. Not only did Choudhri not appear but appellants
produced two employees of another one of Choudhri’s companies who were unable
to answer basic questions about appellants’ claims and defenses. In total, the trial
court issued five orders on Boxer’s motions to compel and for sanctions. In the
second order the trial court assessed monetary sanctions. In the third order the trial
court conditionally struck appellants’ pleadings providing appellants an opportunity
to explain why discovery had not been produced. In the trial court’s fourth order it
granted appellants’ continuance, assessed monetary sanctions, and gave appellants
another chance to produce a corporate representative for deposition.

An order to compel that contains a warning that a party’s pleadings will be

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struck if the party fails to comply has been held to constitute a lesser sanction. GTE
Andras v. Memorial Hosp. Sys., 888 S.W.2d 567, 572 (Tex. App.—Houston [1st
Dist.] 1994, writ denied) (order to compel coupled with language that
noncompliance will result in dismissal constitutes a lesser sanction); see also Jaques
v. Texas Employers’ Ins. Ass’n, 816 S.W.2d 129, 131 (Tex. App.—Houston [1st
Dist.] 1991, no writ) (holding that if a party failed to comply with an order to compel
discovery with the knowledge its pleadings would be struck for non-compliance,
death-penalty sanctions would be appropriate). The conduct reflected in this record
is sufficient to warrant death-penalty sanctions. Appellants did not attempt to comply
with the trial court’s orders until after being warned several times and assessed
monetary sanctions. Appellants never produced Choudhri for deposition and
produced corporate representatives with no knowledge of the relevant facts in
dispute. The record supports the trial court’s finding that lesser sanctions had been
tested before the trial court’s imposition of death-penalty sanctions; therefore, the
first and second elements of TransAmerican’s second prong are satisfied. We
overrule appellants’ third and fourth issues.

In appellants’ sixth issue they challenge the trial court’s finding that
appellants’ hindrance of the discovery process justified a presumption their claims
and defenses lacked merit.

A sanction should not be used to adjudicate the merits of the case unless the
party’s actions justify a presumption that the case lacks merit. TransAmerican, 811
S.W.2d at 917. A party’s refusal to produce material evidence, despite imposition of
lesser sanctions, may, however, warrant the presumption an asserted claim or
defense lacks merit and permit the trial court to dispose of it. See Cire, 134 S.W.3d
at 839. On this issue, the trial court found:

The Court further finds Plaintiff is prejudiced by Defendants’ ongoing

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and persistent refusal to comply with the rules of discovery in that
Plaintiff has been unable to obtain information to which it is entitled to
reasonably investigate and prosecute/defend the claims and defenses
filed in this cause. Accordingly, there is a direct relationship between
Defendants’ offensive conduct and the sanction set forth herein.
The record supports the trial court’s findings. Boxer asserted claims based on
two primary theories: breach of contract, and fraudulent transfer/transferee liability.
In discovery, Boxer sought production of tax returns and financial documents dating
back to when the Management Agreement was signed. Boxer also asserted a claim
against Galleria under the theory of fraudulent transfer and transferee liability. In
asserting this claim Boxer alleged that appellants acted fraudulently in the
foreclosure of the Property and its subsequent purchase by Galleria. Boxer alleged
that the transfer of ownership was a sham orchestrated to fraudulently extinguish
Boxer’s lien. In that regard, Boxer sought documents and communications involved
in the foreclosure and subsequent purchase of the Property. Boxer also sought not
only to depose Choudhri on the veracity of his affidavit but on his knowledge of the
entities Boxer had sued.

The discovery requested by Boxer was materially related to the issues of their
causes of action for breach of contract and fraudulent transfer. Appellants’ repeated
failure to respond to Boxer’s requests for discovery and notices of deposition support
the presumption that their conduct was motivated by a desire to keep Boxer from
learning about the true nature and extent of the transactions involved. This conduct
justifies the presumption that appellants’ claims and defenses lacked merit. Because
appellants’ deliberate hindrance of the discovery process justifies the conclusion that
their claims and defenses lacked merit, striking of their pleadings did not violate
their due process rights. See TransAmerican, 811 S.W.2d at 918. Thus, the third
element of TransAmerican’s second prong has been satisfied. We overrule
appellants’ sixth issue.
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CONCLUSION

Having overruled appellants’ issues we affirm the trial court’s judgment.

/s/ Jerry Zimmerer
Jerry Zimmerer
Justice

Panel consists of Justices Jewell, Zimmerer, and Hassan.

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