National Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. Valdez
| Citation | 863 S.W.2d 458 |
| Decision Date | 29 September 1993 |
| Docket Number | No. D-3310,D-3310 |
| Parties | NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Relator, v. The Honorable Rogelio VALDEZ, Judge, Respondent. |
| Court | Supreme Court of Texas |
This original mandamus action arises from a bad faith insurance case. Relator seeks relief from the trial court's order compelling production of its attorney's files from the related, previously resolved workers' compensation case. Although we conclude that a document is not automatically privileged because it reposes in an attorney's file, we hold that a request for an "attorney's files," as opposed to a request for specific documents relevant to the pending lawsuit, is objectionable under the attorney work-product exemption from discovery. Because relator timely asserted this objection, we conditionally grant the writ of mandamus.
Jimmy Ray Haynes was injured on July 3, 1987, in the course and scope of his employment at Wal-Mart Stores, Inc. Relator National Union Fire Insurance Co., Wal-Mart's workers' compensation carrier, disputed the extent of Haynes' on-the-job injury, and the parties submitted the claim to the Texas Industrial Accident Board. The record does not disclose the terms of the Board award, but Haynes was apparently dissatisfied, as he appealed to district court in Cameron County. While his compensation case was pending, Haynes filed a separate action against National Union and its adjustor, Corporate Services, Inc., for bad faith failure to pay benefits. In addition to a common-law bad faith claim, Haynes alleged negligence and gross negligence, negligent and intentional infliction of emotional distress, and claims under the Texas Workers' Compensation Act, the Texas Industrial Accident Board rules, Texas Insurance Code art. 21.21, and the Texas Deceptive Trade Practices Act.
Haynes ultimately prevailed in the compensation case, obtaining a judgment against National Union for $46,762. 1 On March 20, 1991, with the bad faith case still pending, National Union paid the compensation judgment in full and obtained a judgment release signed by Haynes.
National Union moved for summary judgment in the bad faith case on July 1, 1992, arguing that the judgment release executed by Haynes in the compensation case also released National Union from liability in the bad faith case. National Union alternatively argued that the summary judgment evidence conclusively established a reasonable basis for disputing Haynes' compensation claim. 2 As to the latter ground, National Union relied in part on the deposition testimony of Scott Schwartzberg, its lawyer in the compensation case. Schwartzberg had been associated with the law firm of Hirsch, Glover, Robinson & Sheiness (hereinafter "the law firm") while representing National Union, but he had left that firm when he was deposed in April 1992. Schwartzberg, who never represented National Union in the bad faith case, testified at his deposition that Haynes' compensation claim had been questionable due to conflicting evidence as to the extent of his compensable injury. Therefore, from the insurer's standpoint, it "deserved to be tried." He also testified, however, that he did not specifically intend for the judgment release, which he drafted, to accomplish anything beyond releasing the compensation judgment.
Shortly before National Union moved for summary judgment, Haynes caused a subpoena duces tecum to be served on the custodian of records for the law firm, requesting all records from the compensation case, "including but not limited to the investigation file, the correspondence file and the pleadings file." It is this discovery request that gives rise to the present mandamus action. National Union objected, asserting the attorney-client, work product, and party communication privileges. On July 2, 1992, after hearing argument of counsel but no evidence, 3 the trial court directed National Union to submit the law firm files for in camera review.
National Union submitted the files to the court on September 25, 1992, along with written objections reasserting its earlier claims of privilege. In addition to general objections as to each particular file, and specific objections as to certain documents, National Union claimed that the files in their entirety were privileged as attorney work product because "the organization and labelling of the files, in addition to selection of documents to include in the files, reflect the attorneys' mental impressions, conclusions, opinions, and legal theories formed in preparation for trial."
The trial court held a second hearing on November 24, 1992, after attempting an in camera review. Complaining of their lack of organization, the court ordered all the documents produced. Apparently the court not only rejected National Union's argument that a request for an attorneys' entire file from a particular case violates the work-product exemption, but further concluded that National Union waived its objections by failing to sufficiently index the files. 4
National Union sought mandamus relief from the court of appeals, but it denied relief on January 7, 1993, without opinion. National Union requested leave to file this action on January 19, 1993, and we stayed production of the law firm files that same day.
We must first determine whether it is proper for a party in an insurance bad faith action to specifically request an opponent's attorney's entire litigation file from a related, previously concluded contract case.
We start with the proposition, which National Union does not dispute, that a document is not privileged simply because it is contained in an attorney's files. There is no specific privilege under our rules or caselaw for "documents in an attorney's files." Thus, a party may not cloak a document with the attorney-client privilege simply by forwarding it to his or her attorney. See Methodist Home v. Marshall, 830 S.W.2d 220, 224 (Tex.App.--Dallas 1992, orig. proceeding). Similarly, a file memorandum is not necessarily attorney work product, even though prepared by a lawyer. See Leede Oil & Gas, Inc. v. McCorkle, 789 S.W.2d 686, 687 (Tex.App.--Houston [1st Dist.] 1990, orig. proceeding) ( that attorney memoranda containing only neutral recitals of fact were not protected by the work-product privilege). In seeking to withhold specific documents from production, a party has the burden of demonstrating the applicability of a particular privilege, notwithstanding the location of these documents in its attorney's files.
National Union contends, however, that even if some of the documents in the law firm files would not otherwise be privileged, production of an attorney's entire file necessarily reveals the attorney's mental processes, thus invoking work-product protection. We agree.
Texas Rule of Civil Procedure 166b(3)(a) protects from disclosure the "work product of an attorney." This exemption shelters the "mental processes, conclusions, and legal theories of the attorney, providing a privileged area within which the lawyer can analyze and prepare his or her case." Owens-Corning Fiberglas Corp. v. Caldwell, 818 S.W.2d 749, 750 (Tex.1991) (citations omitted). The exemption continues even after the litigation for which the work product was prepared concludes. Id. at 751-52.
An attorney's litigation file goes to the heart of the privileged work area guaranteed by the work product exemption. The organization of the file, as well as the decision as to what to include in it, necessarily reveals the attorney's thought processes concerning the prosecution or defense of the case. For example, one of the law firm files which National Union produced for in camera inspection was Schwartzberg's "trial notebook," which directly reflects his trial strategy. While a party should not be allowed to shield discoverable documents simply by placing them in an attorney's file, neither should its attorney be restricted in the organization and maintenance of his or her files by the prospect that they might have to be revealed in...
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