Paradigm Oil, Inc. v. Retamco Operating, Inc.
372 S.W.3d 177
| Tex. | 2012Background
- Discovery sanction under Texas Rule 215.2(b)(5) struck Paradigm’s answer and entered a default judgment for Retamco on liability.
- Damages were unliquidated, requiring an uncontested damages hearing unless Paradigm could participate.
- Court of Appeals upheld the sanction initially but reversed the damages award for lack of support and remanded.
- Paradigm sought to participate in the damages hearing; Retamco argued waiver and law-of-the-case foreclosed review.
- Court held the defaulted defendants should have been allowed to participate in the damages hearing, remanding for a new damages proceeding.
- Finding the damages hearing barring Paradigm was excessive, the Court reversed and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether barring Paradigm from damages hearing was an abuse of sanction. | Retamco argues necessity of precluding damages participation. | Paradigm argues right to damages hearing for unliquidated damages. | Yes; exclusion was excessive and not justified by the sanction. |
| Whether death-penalty sanction can adjudicate damages and liability together. | Retamco contends sanction can adjudicate liability and damages. | Paradigm contends sanction should not preclude damages hearing. | Sanction must be tailored; damages hearing participation required. |
| Whether law-of-the-case precluded Paradigm from appeal on damages issue. | Retamco asserts law-of-the-case binding. | Paradigm contends issue not finally decided in prior appeal. | Law-of-the-case did not foreclose review in this Court. |
| Whether the sanction was excessive under TransAmerican due process standards. | Damages should be adjudicated with evidence at hearing. | Sanction proportionate to discovery abuse. | Disallowing damages participation was excessive; remand warranted. |
Key Cases Cited
- Rainwater v. Haddox, 544 S.W.2d 729 (Tex.Civ.App.-Amarillo 1976) (default hearing requires opportunity to contest damages evidentiary presentation)
- TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (limits on death-penalty sanctions; due process constraints)
- Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992) (unliquidated damages require proof after default)
- In re Dynamic Health, Inc., 32 S.W.3d 876 (Tex.App.-Texarkana 2000) (sanctions addressed evidentiary spoliation concerns)
- TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (limits on death-penalty sanctions; remedial purpose of discovery sanctions)