In Re: State Farm Mutual Automobile Insurance Company, Betty Genale Thomas, and Carlos Balido v. the State of Texas

Concur and Opinion Filed December 5, 2024

In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-24-00447-CV

IN RE STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
BETTY GENALE THOMAS, AND CARLOS BALIDO, RELATORS

Original Proceeding from the County Court at Law No. 5
Dallas County, Texas
Trial Court Cause No. CC-23-06609-E

CONCURRING OPINION
by Justice Goldstein
After reviewing relators’ petition and the record before us, this panel has

concluded that relators have failed to demonstrate entitlement to mandamus relief.

While I am constrained to join the majority opinion and order by the record before

us, the specific issues and arguments raised, and our precedent requiring a

Braden/Casey1 analysis, I write separately to distinguish a recent opinion from this

1
See Braden v. Downey, 811 S.W.2d 922 (Tex. 1991) (orig. proceeding); In re Casey, 589 S.W.3d 850,
854-55 (Tex. 2019) (orig. proceeding).
Court2 and address the following open questions based upon prior precedent.

Specifically:

1. What is a sufficient contention for the trial court to know to defer
immediate payment of sanctions or make the requisite findings? Is the
magic language “precludes access to the courts” required or is it
somewhere in between “chilling effect” and “precludes access to the
court,” including a cumulation of statements under the good–faith pleading
standard to sufficiently contend immediate payment of sanctions precludes
access to the courts? Or is deferral of payment of sanctions the mandated
or recommended default position for a trial court to consider
notwithstanding magic language without a hearing and the requisite
findings?

2. Does a trial court necessarily abuse its discretion by issuing a sanctions
order that cannot be remedied by appeal, such as when the sanction
requires immediate performance (e.g., required legal education before final
judgment) or, as may be applicable here, immediate payment to a non-
party over whom neither the trial court nor the appellate courts have
jurisdiction to order repayment?

BACKGROUND

In this original proceeding, relator Carlos Balido, an attorney for relators State

Farm Mutual Automobile Insurance Company and Betty Genale Thomas, who are

the defendants in the underlying suit for damages, 3 challenges two trial court orders

2
This opinion is a departure from a recently issued opinion in another original proceeding with similar
facts in In re State Farm Mutual Automobile Insurance Co., Todd Joseph Dauper, and Armando De Diego,
05-24-00229-CV, 2024 WL 3912369 (Tex. App.—Dallas Aug. 23, 2024, orig. proceeding) (mem. op.).
The De Diego panel conditionally granted the writ without reaching the merits of sanctions orders and
directed the trial court to hold a Braden/Casey hearing. Id. at *1. The De Diego opinion, although based
upon a factually similar procedural posture, critically differed in the specific challenge raised to the trial
court relative to the Braden/Casey threshold requirement of asserting the preclusion of “access to the
courts.”
3
Relator Thomas is a State Farm adjuster. For simplicity, and as is consistent with relators’ own
petition, we refer to State Farm and Thomas together as State Farm.

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sanctioning him personally and requiring immediate payment of sanctions to

opposing counsel Carlos Cortez “for reimbursement of attorney’s fees” as opposed

to ordering payment after the rendition of an appealable judgment.

This is not the first rodeo for plaintiff’s counsel and legal counsel for State

Farm on this issue or others arising in UM/UIM cases.4 While the law relating to

UM/UIM may benefit from the current legal challenges, the record reflects conduct,

comments, and behavior not worthy of our profession or the Texas Lawyers Creed.

I need say no more; the record says enough.5

The trial court ordered Balido to pay Cortez the aggregate sum of $6160

within 14 days of the signing of the sanctions orders. Relying on In re Casey, 589

S.W.3d at 854–855, Balido argues that immediate sanctions are “an abuse of

discretion since it does not give Defendants and their counsel an opportunity to

appeal the sanctions order before the award is due.” Further, Balido argues to this

Court, “[b]ecause the sanctions orders have a preclusive effect on State Farm’s

access to the courts and ability to retain the counsel of its choice, State Farm and

4
The following four cases are currently pending before the Texas Supreme Court:
Case number 23-0755 In re State Farm Mutual Automobile Insurance Company and Lindsey Nicole
Dessart; case number 23-0973 In re State Farm Mutual Automobile Insurance Company and Jeri Charlotte
Ramos; case number 23-0945 In re State Farm Mutual Automobile Insurance Company and Nicholas
Borowec; and case number 23-0975 In re State Farm Mutual Automobile Insurance Company, Robert Nash,
and Yulonda Wilson.
5
Fair warning, this author may not be as circumspect in the future with regard to memorializing
counsel’s statements in perpetuity with appropriate attribution to the declarant.

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Balido have no adequate remedy by appeal.”6 The verbiage utilized by State Farm

to the trial court was that immediate sanctions may have a “chilling effect.” Chilling

effect does not necessarily, without more, equate to “preclude access to the courts.”

Relying on Braden and Casey, State Farm argued in its motion for

reconsideration that the “Texas Supreme Court has advised that deferral of payment

until rendition of an appealable judgment is mandated if the sanctioned party

contends immediate payment would impair access to the courts, and the trial court

does not make express findings, after a hearing, as to why the award does not have

this preclusive effect on access to the courts.” Braden, 811 S.W.2d at 829–30;

Casey, 589 S.W.3d at 855. State Farm averred that “it is the pattern of Roberts’

counsel in nearly every motion to seek sanctions in cases in which Cortez represents

insureds in suits against State Farm. Roberts’ counsel routinely seeks immediately

due sanctions against State Farm’s counsel to thwart legitimate arguments that

abatement of discovery related to extra-contractual Tex. Ins. Code violations is

required before there is a final judgment as to liability and damages.” State Farm

argues that deferral is the default for the imposition of sanctions unless the trial court

supports the requirement of immediate payment by holding a hearing and makes the

required express findings. I discern State Farm’s contention to be that no magic

6
Although a brief hearing was held on the motion for sanctions, State Farm did not provide a written
response to the motion for sanctions. State Farm filed a Motion for Reconsideration seeking deferral of the
immediate payment of sanctions. The record reflects the filing of the Motion for Reconsideration, with
communications regarding the setting of the Motion to be heard, and opposition to the setting of the hearing
by Cortez.
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words are required to establish impaired access to the courts, but merely raising the

specter of a “chilling effect” would put the onus on the trial court to either defer

payment of sanctions as the automatic default or hold a hearing before imposing

immediate sanctions.

I agree that there is a need to clarify whether: 1) the specific phrase “precludes

access to the courts” must be utilized; or 2) a cumulation of statements reflecting

preclusion is sufficient; or 3) simply challenging the immediate payment of

sanctions requires a hearing to establish preclusion. I agree that under current

judicial precedent merely averring “chilling effect” is not sufficient. But it would

seem the best practice for the trial court to hold the Braden/Casey hearing whenever

immediate payment of sanctions is challenged, as it would promote judicial

efficiency and stem the tide of embroiling the appellate courts unnecessarily in the

incidental pretrial rulings of the trial courts.

Additionally, it merits further discussion whether ordering the immediate

payment of sanctions, in particular directed to a non-litigant third party, constitutes

an abuse of discretion as such immediate payment is not subject to appellate review

and thus fails to provide an adequate remedy on appeal. See, e.g., In re Frenkel, No.

05-21-00194-CV, 2021 WL 2943939 (Tex. App.—Dallas July 13, 2021, orig.

proceeding) (mem. op.) (monetary sanction to be paid to the Texas Lawyers

Assistance Program (TLAP)). It is worth noting that, although Frenkel references

Braden and Casey, it does not reference the hearing or requisite findings to support

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immediate payment of sanctions before determining an abuse of discretion. Rather,

Frenkel relies on In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex.

2004) (orig. proceeding) and rule 215.3 in concluding that the trial court abuses its

discretion by ordering the immediate payment of sanctions to a non-litigant third

party, as such immediate payment is not subject to the requisite appellate review.

Thus, once more, this intermediate appellate court is embroiled in an incidental

pretrial ruling of a trial court that necessitates the harmonizing of In re Prudential,

Braden, and Casey by a higher court. To bring these issues to the forefront, I provide

an analysis under our Frenkel decision, as it too has precedential value for our

consideration.

APPLICABLE LAW

To be entitled to the extraordinary remedy of mandamus, relators must show

both that the trial court has clearly abused its discretion and that they have no

adequate appellate remedy. See In re Prudential, 148 S.W.3d at 135–36. A trial

court has no discretion in determining what the law is or applying the law to the

facts. Id. at 135. Thus, a clear failure by the trial court to analyze or apply the law

correctly will constitute an abuse of discretion and may result in appellate reversal

by extraordinary writ. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.

proceeding).

The Texas Rules of Civil Procedure authorize trial courts to impose sanctions

for discovery abuses. See TEX. R. CIV. P. 215.3 (permitting court to impose

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appropriate sanctions if court finds party is abusing discovery process in seeking,

making, or resisting discovery). A sanctions order is generally subject to review on

appeal from the final judgment, but, under certain circumstances, is subject to review

before final judgment by writ of mandamus. In re Garza, 544 S.W.3d 836, 840 (Tex.

2018) (orig. proceeding) (per curiam).

Both sides rely on the supreme court’s decision in Braden7 to support their

respective positions in this original proceeding. In Braden, the supreme court

declined to consider the propriety of the sanctions by mandamus but held the trial

court abused its discretion in imposing monetary sanctions to be paid and community

service to be performed “before those sanctions, and the basis for imposing them,

could be appealed.” Braden, 811 S.W.2d at 925, 930. The court granted relief and

directed the trial court to modify the sanctions order to defer payment of the

monetary and performative sanctions until rendition of final judgment, which

allowed the merits of the sanctions order to be determined on appeal. Id. at 930–31.

7
In Braden, the litigant was ordered to pay a monetary sanction within thirty days, and his attorney was
ordered to complete community service hours within six weeks, as sanctions for discovery abuse. Braden,
811 S.W.2d at 924, 926. The Braden court determined that, “[i]f the imposition of monetary sanctions
threatens a party’s continuation of the litigation, appeal affords an adequate remedy only if payment of the
sanctions is deferred until final judgment is rendered and the party has the opportunity to supersede the
judgment and perfect his appeal.” Id. at 929. To ensure that a monetary sanction does not have a preclusive
effect on litigation, the court concluded that, if a litigant contends that a monetary sanction precludes access
to the court, the district court must either (1) provide that the sanction is payable only at a date that coincides
with or follows entry of a final order terminating the litigation, or (2) make express written findings, after
a prompt hearing, as to why the award does not have a preclusive effect. Id. (adopting the procedure from
Thomas v. Cap. Sec. Servs., Inc., 836 F.2d 866, 882-83 n.23 (5th Cir.1988)). This, the court reasoned,
“allows the trial court to levy some monetary sanctions during pretrial proceedings but requires that
payment of more severe sanctions be deferred until an appealable judgment is rendered.” Id. In the case of
performative sanctions, however, the time spent is not recoverable; therefore, it was an abuse of discretion
to order the performance of sanctions before it could be appealed.
–7–
While a trial court has discretion to require immediate payment of a monetary

sanction, that discretion is not without limits. In re Casey, 589 S.W.3d at 856. Rule

215.3 mandates that sanctions imposed under the rule “shall be subject to review on

appeal from final judgment.” TEX. R. CIV. P. 215.3. “Subject to” means “having a

contingent relation to something and usually dependent on some relation for final

form, validity, or significance.” Subject to, WEBSTER’S THIRD NEW INTERNATIONAL

DICTIONARY (1993).

Although monetary sanctions of the amount at issue here are not generally

reviewable by mandamus because they can typically be rectified on appeal, this case

presents a different situation impacting adequate appellate review. Specifically, if

the sanction is determined on appeal to be improper, neither the trial court nor this

Court would have authority to compel Cortez to repay the sanction because Cortez

is not a party to this lawsuit.8 Additionally, hypothetically, if Cortez’ client was

unsuccessful at trial on the merits, and no attorney’s fees were awarded, there would

be no funds available for offset and credit for monetary sanctions purportedly “for

8
Further, no protection is provided from the potential dissipation of funds as the same were
not ordered to be kept in trust in an IOLTA account pending appeal or deposited into the registry
of the court, further impairing Balido’s ability to recoup funds if the sanction was determined on
appeal to be improper. I question without further discussion the propriety of sanctions paid directly
to Cortez “for reimbursement of attorney’s fees” as such reimbursement may be more properly
paid to the client and thereafter would not present the concerns of recovery against a non-litigant
third party. While without question Cortez is an officer of the court subject to court orders, I have
found no authority or jurisprudential guidance in this context, i.e. addressing reimbursement of
improper sanctions if so determined by way of final judgment.

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reimbursement of attorney’s fees” to the extent of any improper sanction. Thus,

while the monetary sanction may technically be reviewable on appeal, it is not

“subject to” such review as required by rule 215.3. And, without the ability to have

any real review, Balido is left without an adequate appellate remedy.9 The trial court

therefore abused its discretion as the immediate payment of sanctions would not be

“subject to review on appeal from final judgment.” See TEX. R. CIV. P. 215.3.

As in Frenkel, in reaching this conclusion, I reject any suggestion that Braden

mandates a different result. While Braden clearly applies to a sanction that precludes

access to the court, it does not follow that such a sanction is the only type of

monetary sanction that may deny a party an adequate remedy on appeal as required

by In re Prudential. See In re Prudential, 148 S.W.3d at 136. The requirement that

the relator have no adequate appellate remedy “has no comprehensive definition.”

Id. The word “adequate” is “simply a proxy for the careful balance of jurisprudential

considerations that determine when appellate courts will use original mandamus

proceedings to review the actions of lower courts,” and “an appellate remedy is

9
Cortez responds that Balido has not demonstrated a lack of an adequate remedy by appeal because
“[t]he mandamus record is clear (and as Relators concede in their petition) they never filed and set a motion
for reconsideration for hearing. Relators’ Petition at 12.” The petition alleges “State Farm filed a Motion
for Reconsideration on Orders Granting Plaintiff’s Request for Sanctions informing the trial court of the
prejudicial nature of the repeated sanctions orders that are immediately payable and requesting an
emergency hearing, which the court has not set at this time. Appendix O & P.” The sworn supplemental
record reflects Cortez’ office communications advising the court “we object to the motion even being set
for hearing as there is no valid basis for the Court to even hear this matter” and “requesting that a hearing
NOT be set.” Cortez’ response is unpersuasive to deter this author from addressing some of the issues
raised therein, acknowledging that the record is silent as to whether the trial court was aware of the filing
and clear that no hearing was held or action was taken on the motion. While not raised as a separate issue
for consideration, the non-litigant third party concern was raised by other documents in the record and for
this reason is addressed herein.
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‘adequate’ when any benefits to mandamus review are outweighed by the

detriments.” Id. Whether an appellate remedy is “adequate” so as to preclude

mandamus review depends on the circumstances presented and is guided by general

principles rather than simple rules. Id. at 137. The Texas Supreme Court has

expressed a willingness to expand Braden beyond the facts presented in that case.

See In re Casey, 589 S.W.3d at 856 (“Braden was not (and has never been) expressly

limited to its facts.”). This approach is consistent with In re Prudential. Balido

would be denied an adequate remedy on appeal because the trial court would not

have the means to compel Cortez to return the monetary sanction. Therefore, such

immediate payment of sanctions to non-party trial counsel is effectively not “subject

to review on appeal from final judgment” and therefore constitutes an abuse of

discretion irrespective of whether Balido utilizes the magic words asserting that

immediate payment of sanctions has a “preclusive effect on access to the courts.”

I write separately to highlight the ongoing concern presented by this petition

for writ of mandamus “that the appeals courts not embroil themselves unnecessarily

in the incidental pretrial rulings of the trial courts.” Braden, 811 S.W.2d at 928 (first

citing Street v. Second Ct. of Appeals, 715 S.W.2d 638, 639–40 (Tex. 1986) (per

curiam) (orig. proceeding) and then citing Stringer v. Eleventh Ct. of Appeals, 720

S.W.2d 801, 802 (Tex. 1986) (per curiam) (orig. proceeding)). Street and Stringer

deemed the uncertainty of recovering money on appeal insufficient reason to

interfere by mandamus with pretrial stages in trial court.

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CONCLUSION

For the foregoing reasons, if not constrained by precedent, I would conclude

that the trial court abused its discretion by not deferring sanctions until after rendition

of a final appealable judgment, leaving relators without an adequate remedy by

appeal. As the supreme court did in Braden, and as this Court did in Frenkel, I would

conditionally grant mandamus relief and direct the trial court to modify both April

2, 2024 sanctions orders to defer payment of the monetary sanctions until rendition

of final judgment, thus allowing the merits of the sanctions order to be considered

on appeal. See Braden, 811 S.W.2d at 930–33; Frenkel, 2021 WL 2943939 at *5.

/Bonnie Lee Goldstein//
240447cf.p05 BONNIE LEE GOLDSTEIN
JUSTICE

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