Thuesen v. Amerisure Insurance Co., 487 S.W.3d 291

Background

Swamplot Parties sued Thuesen; Amerisure (his insurer) defended him. Thuesen later filed bankruptcy, triggering the automatic stay; bankruptcy court granted limited relief allowing prosecution while Amerisure defended.
Thuesen filed a second suit against the Swamplot Parties and their lawyers (the Doyle Parties); the Swamplot and Doyle Parties moved to consolidate the second suit into the first.
The Swamplot Parties moved to dismiss Thuesen’s claims under Texas Rule 91a; Thuesen amended, then nonsuited all claims against the Swamplot Parties more than three days before the scheduled Rule 91a hearing.
The trial court nonetheless found the Swamplot Parties to be “prevailing parties” as to the consolidated 2014 claims, dismissed those claims with prejudice, and awarded Rule 91a attorney’s fees and costs to the Swamplot Parties.
The trial court also sanctioned Thuesen for filing documents with Star-of-David watermarks, and denied his motion to recuse the presiding judge.
On appeal, issues included consolidation, bankruptcy-stay compliance, Rule 91a fee entitlement after a timely nonsuit, sanctions, and recusal.

Issues

Issue	Plaintiff's Argument (Swamplot)	Defendant's Argument (Thuesen)	Held
1. Consolidation abuse of discretion	Consolidation was proper; no prejudice	Consolidation was prejudicial because Doyle/Raizner would be witnesses/attorneys	Any consolidation error, if any, was harmless; no reversal
2. Consolidation violated bankruptcy stay or bankruptcy orders	Actions were permitted; post-petition claims and later bankruptcy orders authorized steps	Consolidation and related actions violated the automatic stay and the bankruptcy court’s February order	Consolidation did not violate the automatic stay; actions were permitted under later bankruptcy order
3. Rule 91a fees recoverable after claimant nonsuits before hearing	Movants are prevailing parties because nonsuit was taken to avoid adverse ruling; thus fees under Rule 91a apply	Nonsuit filed at least 3 days before hearing prevents court from ruling on Rule 91a; movant cannot be prevailing party on the motion and thus cannot recover under Rule 91a.	Held for Thuesen: where respondent nonsuits challenged claims at least 3 days before hearing, court may not rule on Rule 91a motion and movant is not a “prevailing party on the motion”; Rule 91a fees vacated
4. Sanctions for Star-of-David documents and recusal	Sanctions appropriate; judge properly afforded notice and hearing; recusal unwarranted	Sanctions were sua sponte without adequate notice; judge should have recused for bias	Sanctions were within court’s inherent authority and notice was adequate; recusal denied (no extrajudicial bias shown)

Key Cases Cited

Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652 (Tex. 1990) (standard: trial court’s broad discretion to consolidate)
Epps v. Fowler, 351 S.W.3d 862 (Tex. 2011) (nonsuit for avoiding adverse judgment — analysis of prevailing party in a legal proceeding)
Darr v. Altman, 20 S.W.3d 802 (Tex. App.—Houston [14th Dist.] 2000) (nonsuit during bankruptcy stay does not violate stay)
Campbell v. Countrywide Home Loans, 545 F.3d 348 (5th Cir. 2008) (bankruptcy stay does not apply to post-petition claims)
Bellini Imports, Ltd. v. Mason and Dixon Lines, Inc., 944 F.2d 199 (4th Cir. 1991) (post-petition actions unaffected by automatic stay)
In re Bennett, 960 S.W.2d 35 (Tex. 1997) (trial court’s inherent power to impose sanctions)
Liteky v. United States, 510 U.S. 540 (U.S. 1994) (standard for disqualifying judges for bias; extrajudicial-source requirement)
York v. State, 373 S.W.3d 32 (Tex. 2012) (actions violating bankruptcy stay are void)
Villafani v. Trejo, 251 S.W.3d 466 (Tex. 2008) (effect of nonsuit on plenary power)