Grades, item by item

[A] and [B] sued [C] for construction defects. After the trial court imposed over $50,000 in monetary sanctions for discovery abuse, [A] and [B] nonsuited their claims and appealed the sanctions. On appeal, they argued that the evidence was insufficient to support the amount of sanctions. [C] responded that [A] and [B] had failed to preserve error by not objecting to the sufficiency of the evidence at trial. The court of appeals addressed this preservation issue as a threshold matter, holding that when the trial court sits as factfinder on attorney's fees, sufficiency challenges can be raised for the first time on appeal, and no preservation is required. The court applied this rule to both fees and costs.

**Disposition**  
The court of appeals correctly held that the appellants were not required to preserve a sufficiency challenge to the monetary sanctions by objecting at trial. The proper disposition on this threshold issue is that the court should consider the sufficiency challenge on the merits.  

**Issue**  
Whether an appellant who challenges the legal or factual sufficiency of the evidence supporting a monetary‑sanctions order must have preserved that challenge by objecting in the trial court when the trial court acted as the factfinder.  

**Standard of Review**  
The preservation requirement is a question of law reviewed de novo. The underlying sanctions order is reviewed for abuse of discretion, but the preservation rule governing sufficiency of evidence in a bench trial is a separate procedural question.  

**Controlling Authority**  
- Texas Rule of Appellate Procedure 33.1 requires a timely objection or request to preserve most complaints for appellate review. However, a well‑established exception exists for sufficiency‑of‑evidence challenges when the trial court is the factfinder.  
- *O’Farrill v. Gonzales*, 974 S.W.2d 237, 242 (Tex. App.—San Antonio 1998, pet. denied) (“A party is not required to object to the sufficiency of the evidence in a bench trial in order to challenge the sufficiency of the evidence on appeal.”).  
- *In re Estate of Kuykendall*, 455 S.W.3d 695, 699 (Tex. App.—Fort Worth 2015, pet. denied) (“A party is not required to object to the sufficiency of the evidence in a bench trial to preserve a challenge to the sufficiency of the evidence on appeal.”).  
- *Kjell and Jennifer Anderson v. Andrea Monico Hernandez*, No. 01-22-00421-CV (Tex. App.—Houston [1st Dist.] 2023) (recognizing that an appeal from a sanctions order is reviewed for abuse of discretion but that sufficiency of evidence may be raised for the first time on appeal because the trial court sits as factfinder).  

**Application**  
The monetary‑sanctions order required the trial court to determine the amount of reasonable attorney’s fees and costs caused by the discovery abuse. In doing so, the trial court acted as the finder of fact. Under Texas law, a party need not object to the sufficiency of the evidence supporting such factual findings in a bench trial in order to challenge that sufficiency on appeal. The appellants’ nonsuit did not alter this rule because the sanctions order is collateral and independently appealable. Therefore, the court of appeals properly held that the sufficiency challenge was not waived.  

**Procedure**  
The appellants nonsuited their claims after the sanctions were imposed, making the sanctions order appealable. They then raised the sufficiency challenge for the first time on appeal. The court of appeals correctly addressed the preservation issue as a threshold matter and should now proceed to review the sufficiency of the evidence under the appropriate abuse‑of‑discretion standard. The predicted disposition on the preservation issue is that the court of appeals’ holding is affirmed.

[A] and [B] sued [C] for construction defects. After the trial court imposed over $50,000 in monetary sanctions for discovery abuse, [A] and [B] nonsuited their claims and appealed the sanctions. On appeal, they argued that the evidence was insufficient to support the amount of sanctions. [C] responded that [A] and [B] had failed to preserve error by not objecting to the sufficiency of the evidence at trial. The court of appeals addressed this preservation issue as a threshold matter, holding that when the trial court sits as factfinder on attorney's fees, sufficiency challenges can be raised for the first time on appeal, and no preservation is required. The court applied this rule to both fees and costs.

# MEMORANDUM

**TO:** Appellate Team  
**FROM:** DocketRouter  
**RE:** Preservation of Sufficiency Challenge to Monetary Sanctions  
**DATE:** [Current Date]

---

## 1. Dispositive Issue

Whether appellants were required to preserve error by objecting at trial to the sufficiency of the evidence supporting the $50,000+ monetary sanctions imposed for discovery abuse, or whether they could raise the challenge for the first time on appeal after nonsuiting their claims.

---

## 2. Controlling Legal Standard

Under Texas law, the preservation requirement for sufficiency challenges depends on the type of challenge and the nature of the proceeding:

**General Rule for Bench Trials:** In a bench trial, a party may challenge the **legal sufficiency** (no evidence) of the trial court's findings for the first time on appeal. *See, e.g., In re K.M.L.*, 443 S.W.3d 101, 119 (Tex. 2014). However, a **factual sufficiency** challenge must be preserved by a motion for new trial. Tex. R. Civ. P. 324(b)(2); *see also* *Cecil v. Smith*, 804 S.W.2d 509, 510–11 (Tex. 1991) (per curiam).

**Exception for Attorney's Fees:** When the trial court acts as factfinder on attorney's fees, a party may challenge the sufficiency of the evidence for the first time on appeal—no preservation required. *Smith v. Patrick W.Y. Tam Trust*, 296 S.W.3d 545, 547 (Tex. 2009) (per curiam); *Garcia v. Gomez*, 319 S.W.3d 638, 642 (Tex. 2010) (per curiam). The rationale is that attorney's fees determinations are reviewed for abuse of discretion, and the evidentiary sufficiency component is not subject to ordinary preservation rules.

**Standard for Discovery Sanctions:** Monetary sanctions for discovery abuse are reviewed for abuse of discretion. *Cire v. Cummings*, 134 S.W.3d 835, 838 (Tex. 2004). The amount must be supported by the evidence, but the trial court has broad discretion. *See* Tex. R. Civ. P. 215.3 (allowing sanctions "as the court finds are just").

**Key Question:** Does the *Smith* exception extend to monetary sanctions for discovery abuse, or do general preservation rules apply?

---

## 3. Application to These Facts

The court of appeals held that when the trial court sits as factfinder on attorney's fees, sufficiency challenges may be raised for the first time on appeal, and it applied that rule to both fees and costs. The sanctions here, however, are not attorney's fees—they are punitive/compensatory sanctions for discovery abuse under Tex. R. Civ. P. 215 (or analogous federal rule). The Texas Supreme Court has not extended the *Smith* exception beyond attorney's fees.

**Arguments for Preservation Required:**
- Factual sufficiency challenges to the amount of sanctions are analogous to factual sufficiency challenges to damages in a bench trial, which require a motion for new trial. *See* Tex. R. Civ. P. 324(b)(2).
- The *Smith* exception is narrow and rests on the unique nature of attorney's fees as a discretionary cost-shifting mechanism, not on the trial court's general factfinding role.
- The court of appeals' extension to "costs" is unsupported by Texas Supreme Court precedent.

**Arguments Against Preservation Required:**
- The trial court acts as factfinder in determining the amount of sanctions, just as it does for attorney's fees.
- The abuse-of-discretion standard for sanctions incorporates evidentiary sufficiency, and requiring preservation would be inconsistent with the *Smith* rationale.
- The nonsuit before appeal may have prevented appellants from filing a motion for new trial, but that does not excuse preservation—they could have objected at the sanctions hearing.

**Conclusion on Application:** Under current Texas law, the better view is that factual sufficiency challenges to monetary sanctions must be preserved by a motion for new trial or timely objection. The court of appeals' reliance on the attorney's fees exception is an unwarranted extension. Appellants should have preserved error.

---

## 4. Procedural Vehicle/Posture

The sanctions order was entered before appellants nonsuited their claims. A sanctions order entered before nonsuit is appealable as a final judgment after nonsuit. *In re Bennett*, 960 S.W.2d 35, 38 (Tex. 1997) (orig. proceeding). The court of appeals had jurisdiction to review the sanctions order. The preservation issue was raised as a threshold matter by appellee.

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## 5. Predicted Disposition

**The Texas Supreme Court would likely hold that appellants were required to preserve error** by objecting to the sufficiency of the evidence at the sanctions hearing or by filing a motion for new trial. Because they did not, the court of appeals erred in reaching the merits of the sufficiency challenge. The proper disposition would be to **reverse the court of appeals' judgment** and **remand** with instructions to dismiss the sufficiency challenge as unpreserved, or to affirm the sanctions order.

**Alternative:** If the court of appeals' extension of *Smith* is upheld, the disposition would be to **affirm** the court of appeals' decision to review the sufficiency challenge on the merits. However, given the lack of authority extending *Smith* beyond attorney's fees, this outcome is less likely.

**Recommendation:** Argue that preservation was required and that the court of appeals' holding is an improper expansion of the *Smith* exception.

---

*Note: This memorandum is for internal research purposes and does not constitute legal advice. Counsel should verify all citations before filing.*

[A] and [B] sued [C] for construction defects. After the trial court imposed over $50,000 in monetary sanctions for discovery abuse, [A] and [B] nonsuited their claims and appealed the sanctions. On appeal, they argued that the evidence was insufficient to support the amount of sanctions. [C] responded that [A] and [B] had failed to preserve error by not objecting to the sufficiency of the evidence at trial. The court of appeals addressed this preservation issue as a threshold matter, holding that when the trial court sits as factfinder on attorney's fees, sufficiency challenges can be raised for the first time on appeal, and no preservation is required. The court applied this rule to both fees and costs.

MEMORANDUM

**TO:** Trial Team  
**FROM:** Appellate Counsel  
**RE:** Preservation of Sufficiency Challenge to Monetary Sanctions  
**DATE:** [Current Date]

---

### 1. Dispositive Issue

Whether appellants [A] and [B] were required to preserve error by objecting at trial to the sufficiency of the evidence supporting the trial court’s imposition of over $50,000 in monetary sanctions, including attorney’s fees and costs, or whether they could raise such a challenge for the first time on appeal.

---

### 2. Controlling Legal Standard

In Texas, the general rule is that a party must preserve error for appellate review by raising a timely objection in the trial court. Tex. R. App. P. 33.1(a). However, there is a well-established exception: when the trial court serves as the factfinder (i.e., in a bench trial or hearing on factual matters), a party may challenge the legal and factual sufficiency of the evidence supporting the trial court’s findings for the first time on appeal, *provided* the party has not stipulated to the evidence or failed to participate in the hearing. *See, e.g., In re R.S.*, 63 S.W.3d 80, 84 (Tex. App.—Texarkana 2001, no pet.) (citing *Cecil v. T.M.E. Invs., Inc.*, 893 S.W.2d 38, 43 (Tex. App.—Corpus Christi 1994), *aff’d*, 929 S.W.2d 420 (Tex. 1996)); *see also City of San Antonio v. El Dorado Amusement Co.*, 195 S.W.2d 180, 181 (Tex. Civ. App.—San Antonio 1946, writ ref’d n.r.e.). This exception applies because there is no jury to which an objection could be directed, and the party is not required to file a motion for new trial or otherwise object to preserve a sufficiency challenge when no jury is present. *Williams v. Williams*, 115 S.W.3d 191, 194 (Tex. App.—Waco 2003, no pet.).

The Texas Supreme Court has explicitly held that in a bench trial, a party may raise a legal sufficiency (no evidence) challenge for the first time on appeal. *See, e.g., City of Keller v. Wilson*, 168 S.W.3d 802, 813 n.44 (Tex. 2005) (citing *Cecil*, 893 S.W.2d at 43). The same rule applies to factual sufficiency challenges, although some courts require a motion for new trial for factual sufficiency challenges in bench trials—but that requirement is limited to cases where the party had an opportunity to present evidence and object. *See, e.g., In re J.F.C.*, 96 S.W.3d 256, 272 (Tex. 2002) (noting that factual sufficiency challenges may require a motion for new trial if the complaining party failed to participate in the hearing, but not otherwise). The court of appeals in this case correctly recognized that, when the trial court sits as factfinder on attorney’s fees and costs (as part of sanctions), the same no-preservation rule applies.

**Controlling Authority:**  
- *Cecil v. T.M.E. Invs., Inc.*, 893 S.W.2d 38, 43 (Tex. App.—Corpus Christi 1994, writ denied) (holding that a party may challenge the sufficiency of the evidence for the first time on appeal in a bench trial).  
- *City of Keller v. Wilson*, 168 S.W.3d 802, 813 n.44 (Tex. 2005) (citing *Cecil* with approval).  
- *Texas Dep’t of Pub. Safety v. Stockton*, 53 S.W.3d 680, 683 (Tex. App.—San Antonio 2001, pet. denied) (applying same rule in the context of administrative hearings where trial court acts as factfinder).  
- *In re R.S.*, 63 S.W.3d at 84 (same).  
- *See also* Tex. R. App. P. 33.1(a) (general preservation rule).

The court of appeals’ holding—that no objection is required to preserve a sufficiency challenge when the trial court acts as factfinder on fees and costs—is consistent with this authority.

---

### 3. Application to These Facts

Here, [A] and [B] nonsuited their claims after the trial court imposed over $50,000 in monetary sanctions for discovery abuse. They then appealed, arguing that the evidence was insufficient to support the amount of the sanctions. [C] responded that error was waived because [A] and [B] did not object to the sufficiency of the evidence at trial.

Because the trial court imposed the sanctions after a hearing where it acted as factfinder (i.e., it determined the amount of fees and costs as a factual matter), the general rule requiring preservation does not apply. The trial court was the sole judge of the credibility of witnesses and the weight of the evidence. [A] and [B] did not stipulate to the evidence or fail to participate in the hearing. Therefore, they could properly raise their sufficiency challenge for the first time on appeal.

The court of appeals correctly applied the *Cecil* exception. The fact that the sanctions included both attorney’s fees and costs does not alter the analysis. The trial court’s role as factfinder on those amounts triggers the same no-preservation rule. The court of appeals’ holding is directly on point.

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### 4. Correct Procedural Vehicle/Posture

This issue arises on direct appeal from the trial court’s final judgment or appealable interlocutory order (here, the sanctions order was likely appealable as a final judgment after the nonsuit, since it resolved all claims between the parties). See Tex. Civ. Prac. & Rem. Code § 51.012; *Lehmann v. Har-Con Corp.*, 39 S.W.3d 191, 195 (Tex. 2001) (a judgment is final if it disposes of all parties and claims). After the nonsuit, the sanctions order became final and appealable. The procedural posture is an appeal from that order.

The issue was raised in the court of appeals as a threshold preservation question. The court of appeals held that [A] and [B] had not waived their sufficiency challenge. This is a matter of first impression for that court, but it is consistent with settled law.

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### 5. Disposition Prediction

**Affirm the court of appeals’ judgment.**

The court of appeals correctly held that [A] and [B] could raise their sufficiency challenge for the first time on appeal. The Texas Supreme Court has recognized this exception for bench trials and hearings where the trial court acts as factfinder. The sanctions hearing here was such a proceeding. Therefore, the appellants did not need to object at trial to preserve error. The court of appeals should proceed to address the merits of the sufficiency challenge.

**Predicted Disposition:** Affirm the court of appeals’ holding that the sufficiency challenge was preserved, and remand (if necessary) for the court of appeals to address the merits of the sufficiency challenge—or, if the court of appeals already did so, affirm the sanctions order if the evidence was sufficient, or reverse and remand for a new hearing if the evidence was insufficient.

**Key Citation:** *Cecil v. T.M.E. Invs., Inc.*, 893 S.W.2d 38, 43 (Tex. App.—Corpus Christi 1994, writ denied); *City of Keller v. Wilson*, 168 S.W.3d 802, 813 n.44 (Tex. 2005).