CROSSOVER: The Sanctions Trap: Firm-Wide Liability for ‘Groundless’ Pleadings and the Danger of the Missing Reporter’s Record
Burns v. Standard Casualty Company, 14-24-00172-CV, February 26, 2026.
On appeal from the 10th District Court, Galveston County, Texas.
Synopsis
The Fourteenth Court of Appeals affirmed a summary judgment and a significant sanctions award against homeowners and their legal counsel for asserting groundless claims that a frozen pipe burst constituted an “explosion” under an insurance policy. This decision underscores the perilous consequences of failing to provide a reporter’s record of a sanctions hearing and confirms that firm-wide liability for “groundless” pleadings is a potent tool for punishing bad-faith litigation.
Relevance to Family Law
For the Texas family law practitioner, Burns is a cautionary tale regarding the “kitchen sink” approach to pleading. In high-conflict divorces or custody modifications, counsel often face pressure to assert marginal tort claims or bad-faith allegations to gain leverage. This opinion clarifies that if such claims are deemed groundless and brought in bad faith, the resulting sanctions may be assessed not just against the individual attorney, but against the firm as an entity. Furthermore, it highlights a critical procedural trap: if a trial court conducts an evidentiary hearing on sanctions, the failure to secure a reporter’s record creates an insurmountable presumption on appeal that the evidence supported the trial court’s findings of bad faith or harassment.
Case Summary
Fact Summary
The dispute arose from property damage sustained during the February 2021 winter storm. Steven and Jacqueline Burns suffered burst water pipes due to freezing temperatures. Their policy with Standard Casualty Company provided a $5,000 limit for “Sudden and Accidental Discharge” of water (Peril 9) but provided much higher limits for an “Explosion” (Peril 4). The insurer paid the $5,000 limit, asserting the event was a water discharge. The Burnses, represented by Eric B. Dick and the Dick Law Firm, PLLC, sued for breach of contract, DTPA violations, and insurance code violations, arguing that a pipe burst is an “explosion.”
The insurer moved for summary judgment and sought sanctions, arguing the suit was groundless and brought in bad faith. The trial court held an in-person oral hearing on these motions. Crucially, no reporter’s record was made of this hearing. The trial court granted summary judgment, struck the plaintiffs’ evidence, and awarded trial and appellate attorneys’ fees as sanctions against the clients, the individual attorney, and the law firm.
Issues Decided
- Whether the trial court abused its discretion by refusing to consider late-filed summary judgment evidence on a motion for reconsideration.
- Whether the evidence was sufficient to support the summary judgment in favor of the insurer.
- Whether the trial court properly awarded sanctions under Rule 13, Chapter 10 of the Civil Practice and Remedies Code, the DTPA, and the Insurance Code.
- Whether the award of unconditional appellate attorneys’ fees was permissible.
Rules Applied
- Texas Rule of Civil Procedure 13: Authorizes sanctions for pleadings that are groundless and brought in bad faith or for purposes of harassment.
- Texas Civil Practice and Remedies Code § 10.001: Requires that a person signing a pleading certify that each allegation has evidentiary support or is likely to have it.
- Texas Insurance Code § 541.153 & DTPA § 17.50(c): Provides for the award of attorneys’ fees against a party bringing an action that is groundless and brought in bad faith or for harassment.
- The “Missing Record” Presumption: In the absence of a reporter’s record from an evidentiary hearing, the appellate court must presume the evidence presented was sufficient to support the trial court’s findings.
Application
The court’s analysis centered on the definition of “explosion” versus “water discharge.” The court found that the plaintiffs failed to present any competent evidence that the frozen pipe burst met the legal or common definition of an explosion. Because the plaintiffs’ response to the summary judgment was largely unsupported by admissible evidence—and because the trial court had struck much of what they did submit—the court found no error in the rendition of summary judgment.
On the issue of sanctions, the court emphasized the procedural posture created by the missing reporter’s record. Because the trial court held a hearing where evidence could have been (and ostensibly was) presented regarding the “bad faith” and “harassment” prongs of the various sanction statutes, the lack of a record meant the appellants could not demonstrate that the trial court abused its discretion. The court affirmed the sanctions against the firm and the individual lawyer, noting that the trial court’s findings of fact in the judgment explicitly supported the conclusion that the claims were groundless and filed for an improper purpose.
Holding
The Court of Appeals affirmed the summary judgment in its entirety, finding that the insurer had met its burden and the plaintiffs had not raised a genuine issue of material fact. Regarding sanctions, the court affirmed the liability of the Burnses, Eric B. Dick, and the Dick Law Firm, PLLC, for the insurer’s attorneys’ fees.
The court did, however, modify the judgment regarding appellate attorneys’ fees. The trial court had awarded these fees unconditionally. Following established Texas precedent, the appellate court modified the judgment to make the award of appellate fees contingent upon the insurer’s success on appeal.
Practical Application
Family law litigators often operate in an environment where emotions run high and “scorched earth” pleading is common. This case serves as a reminder that:
- The Firm is on the Hook: Sanctions under the DTPA and Insurance Code—and often by extension Rule 13—can reach the assets of the law firm itself, not just the signing attorney.
- Reporter Records are Mandatory: If you are the subject of a sanctions motion, or if you are moving for them, ensure a court reporter is present. Without a record, the “presumption of validity” regarding the trial court’s findings is virtually impossible to overcome.
- Summary Judgment Reconsideration is a High Bar: You cannot use a motion for reconsideration to introduce evidence that was available at the time of the original summary judgment hearing.
Checklists
Preserving the Record for Sanctions Review
- Confirm the presence of a court reporter for any hearing involving Rule 13 or Chapter 10 motions.
- If the court indicates it will rule based on “evidence,” ensure that any exhibits are formally offered and admitted into the record.
- Request specific findings of fact and conclusions of law regarding “bad faith” and “groundlessness” if they are not included in the final order.
Avoiding Firm-Wide Liability
- Implement a secondary review process for pleadings that assert “extraordinary” claims (e.g., fraud, conspiracy, or statutory bad faith).
- Ensure that every factual allegation in a petition or counter-petition has at least a “colorable” basis in existing evidence before filing.
- Maintain a clear distinction between the client’s emotional narrative and the legal “groundedness” of the pleadings.
Citation
Burns v. Standard Casualty Company, No. 14-24-00172-CV (Tex. App.—Houston [14th Dist.] Feb. 26, 2026, no pet. h.).
Full Opinion
Family Law Crossover
In Texas family law, the Burns holding can be effectively weaponized in property disputes involving “waste” or “fraud on the community” claims that lack a paper trail. If an opposing party files a complex tort claim (like civil conspiracy with a third party) within a divorce action without a shred of evidence, counsel should immediately move for sanctions under Chapter 10 and Rule 13. By citing Burns, you can argue that the firm representing the spouse should be held jointly and severally liable for your fees. Furthermore, should the trial court grant your motion, the Burns precedent regarding the missing reporter’s record ensures that if the other side forgets to bring a reporter to the hearing, their chances of a successful appeal are virtually zero. This case reinforces the “gatekeeper” function of the trial court in preventing family law litigation from being used as a tool for financial harassment.
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