Hot cooked penne or rigatoni pasta (optional)
In a heavy 12-inch skillet or Dutch oven, brown chicken on all sides in hot oil (4 to 5 minutes total). Remove chicken; set aside. Add the mushrooms (if using fresh), sweet peppers, onion and garlic to the skillet drippings. Cook until the vegetables are tender.
Add the mushrooms (if using canned), wine and serrano or crushed red pepper to vegetable mixture. Bring to boiling; reduce heat. Simmer, uncovered, until almost all of the liquid evaporates. Add the undrained tomatoes, tomato paste, lemon juice, basil, sugar, thyme, salt and pepper. Return the chicken to the pan.
Simmer, uncovered, for 15 minutes or until the chicken is tender and no longer pink. Or, after returning chicken to pan, bake, uncovered, in 350 F oven for 10 to 15 minutes or until the chicken is done. (Use an oven-proof skillet for this method. Serve over cooked pasta.