A state judge sanctioned a Bellaire lawyer $150,000 after finding that the lawyer filed false and frivolous claims on behalf of his Chinese client, including one of residence near his failed Houston area chicken restaurant, while he was apparently living in Shanghai.
In a 10-page ruling issued Thursday, Fort Bend County District Judge R. O’Neill Williams said Bellaire lawyer Paul B. Rosen and his client, Gen Fu Zhang, acted in bad faith in a “willful, deliberate and calculated” effort to “perpetuate a fraud” on the court and the defendant landlord, Peterson New Territory Investors. Judge Williams found Rosen and Zhang jointly and separately liable.
The judge found they filed baseless documents, submitted false declarations, disobeyed discovery orders, withheld evidence and engaged in other serious misconduct.
“The egregiousness and repetitiveness of plaintiffs’ perjury and other misconduct exhibits plaintiffs’ total disregard for and respect of the integrity of this court and our judicial system,” Judge Williams wrote. “This is not an incident of failing to produce one document or telling one lie, but a mountain of evasiveness, lack of candor, concealment, numerous outright lies, and a total disregard for the truth, which is the foundation of our judicial system.”
Rosen did not reply to multiple requests for comment, but Houston lawyer Foster Johnson, who represents Peterson, said recent talks with his opposing counsel indicated that he and Zhang would appeal the ruling. However, given the “exhaustive detail” of the case that Judge Williams lays out in the ruling, Johnson says he’s confident that the ruling is “appeal proof.”
Beyond explaining why he awarded the sanctions, according to Johnson, Judge Williams said at the end of the sanctions hearing that he wanted the ruling to “serve as a warning to other lawyers who come into his court that the court is not going to tolerate lawyers who sign motions and file pleadings that literally have no factual basis.
“I think the lawyers in this case forgot that motions and pleadings aren’t like Twitter; you can’t just say anything you want,” said Johnson, an associate at Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing.
The $150,000 is believed by Johnson and his co-counsel, S. Scott West, to be one of the largest sanctions awarded against a lawyer in Texas — even rarer because judges are typically hesitant to award sanctions against attorneys to begin with, Johnson said.
“Judges are aware that attorneys aren’t omniscient and don’t always know what the truth is and that they’re in a position to advocate for their clients,” he said. “So courts are very reluctant to punish attorneys unless it’s really clear that the attorneys knew what they were doing. And it’s rare that you have this kind of smoking gun evidence that we uncovered in the case.”
Johnson said the litigation began in 2019 after Zhang walked away from a 10-year lease he had signed with Peterson to operate a Frenchy’s Chicken franchise restaurant in a Sugar Land strip mall. Johnson said the 10-year timeframe was unusual for a commercial lease, which is typically only several years, and that Zhang walked away from the lease two years in after the restaurant failed.
Rather than satisfy the guarantee, Johnson said, Zhang sued Peterson in order to obtain a declaratory judgment that stated the guarantee, promissory note and deed of trust associated with the leasing agreement were invalid and that the property could not be foreclosed on because the collateral was Zhang and his wife’s homestead. Zhang signed a sworn affidavit stating these facts, which led Zhang to obtain a temporary injunction against Peterson last April.
Part of Zhang’s argument was that he was duped into signing the leasing agreement through an “intentionally vague” power of attorney agreement that he unwittingly signed, according to court documents.
But those assertions later crumbled when they contradicted what Zhang said in his own testimony. Johnson said his side eventually discovered that Zhang and his wife didn’t live in the Houston area but in Shanghai. In fact, Johnson’s side learned that Zhang, a Chinese national, had not lived in the U.S. for so long that he has technically forfeited his green card.
A Zoom deposition conducted after the pandemic began from the couple’s Shanghai apartment is Exhibit A.
“We first deposed Mr. Zhang’s wife (Limin Wang), and the translator cautioned us multiple times that she was hearing some other Chinese voice in her headset giving instructions to Mrs. Wang,” Johnson said. “During Mr. Zhang’s deposition, we caught his son hiding in the living room coaching his father on what answers to give. I’ve never seen anything like this.”
Judge Williams wrote that Rosen failed to “reasonably investigate the law and the facts,” when he could have done so by simply reviewing the “emails, passports and travel documents in his clients’ possession.”
The judge sanctioned Rosen and his client for violating multiple parts of the Texas Rules of Civil Procedure.
According to Judge Williams’ ruling, the $150,000 sanctions award accounts for the difference between the $20,000-$30,000 that Peterson would have incurred in a typical foreclosure case and the $208,000 it actually incurred as a result of the plaintiff’s “false allegations and groundless claims.”
“Good cause exists to impose sanctions because this entire lawsuit was premised on a series of demonstrably false claims, and it was filed to harass Peterson and to unnecessarily delay the case and increase the costs of litigation,” the ruling says.
The case is 19-DCV-266793 in Ford Bend County.