Boring & Tunneling Co. of America, Inc. v. Salazar

• Decision Date: 30 November 1989
• Docket Number: No. 01-89-00686-CV,01-89-00686-CV
• Citation: 782 S.W.2d 284
• Parties: BORING & TUNNELING COMPANY OF AMERICA, INC. and Lee Arthur Evans, Relators, v. The Honorable Felix SALAZAR, District Judge of the 157th District Court, Harris County, Texas, Respondent. (1st Dist.)
• Court: Texas Court of Appeals

Page 284

782 S.W.2d 284

84 A.L.R.4th 1

BORING & TUNNELING COMPANY OF AMERICA, INC. and Lee Arthur Evans, Relators, v. The Honorable Felix SALAZAR, District Judge of the 157th District Court, Harris County, Texas, Respondent.

No. 01-89-00686-CV.

Court of Appeals of Texas Houston (1st Dist.).

Nov. 30, 1989.

Tom M. Davis, Jr., JoAnn Storey, Davis & McFall, P.C., Houston, for relators.

Before MIRABAL, WARREN and DUGGAN, JJ.

ORIGINAL PROCEEDING ON PETITION FOR WRIT OF MANDAMUS

MIRABAL, Justice.

The relators seek to have this Court order the trial court to rescind an order issued in a personal injury case that grants discovery of certain documents. Relators claim that the documents are exempt from discovery because of investigative and attorney-client privileges.

The underlying dispute involves the death of three vehicle occupants, who died after their car collided with a company truck driven by Lee Arthur Evans. Evans and his company, Boring & Tunneling Company of America, Inc., are defendants in the lawsuit. After the accident, Evans was arrested on suspicion of driving while intoxicated. The accident occurred May 5, 1985; suit was filed December 9, 1985.

During discovery, the plaintiffs requested that the defendants produce certain documents. Initially, the trial judge, the Honorable Felix Salazar, granted a motion for protection requested by the defendants. The plaintiffs sought to have this Court order the trial court to rescind that protective order. This Court granted leave to file in that proceeding, but the day before the hearing on the mandamus, Judge Salazar rescinded the protective order and ordered the defendants to produce the disputed documents. His action made the mandamus proceeding moot, and accordingly, this Court dismissed that proceeding. Aleman v. Salazar, No. 01-89-00269-CV (Tex.App.--Houston [1st Dist.], June 22, 1989, orig. proceeding) (ordered not published). Relators, the defendants in the suit, then filed this proceeding, challenging the trial court's production order.

The documents that are the subject of this mandamus action, and the privileges alleged by the relators in their motion for protection, are as follows:

1. Defendants' attorney Tom Davis' letter regarding the accident investigation to adjuster Johnnie Bass (May 9, 1985): attorney-client and investigative exemption;

2. File memo of Tom Davis regarding the investigation (May 9, 1985): investigative exemption and work product privilege;

3. Statement of Lee Arthur Evans (May 11, 1985): investigative exemption, attorney-client privilege, and witness statement privilege;

4. Statement of Keith Evans, Lee Arthur Evans' son and passenger in his truck at the time of the accident (May 11, 1985): investigative exemption and witness statement exemption.

The evidence offered in support of the request for a protective order consists of affidavits from: W.D. Murphy, president of Boring & Tunneling; Johnnie Bass, claims adjuster for Boring & Tunneling's insurance company; and Tom M. Davis, Jr., partner of the law firm hired by the insurance company to represent Boring & Tunneling. In sum, their affidavits relate the circumstances surrounding their accident investigation, and explain that the company, adjuster, and lawyer did not follow their ordinary custom in handling a claim, but rather sought to prepare a defense in anticipation of litigation.

In addition, relators also submitted the disputed documents to the trial court and this Court for an in camera review.

Mandamus Review

We must determine whether the trial court abused its discretion by ordering production of the disputed documents. We may not disturb the trial court's ruling unless we find a clear abuse of discretion and that there is no adequate remedy by appeal. Strake v. First Court of Appeals, 704 S.W.2d 746, 747 (Tex.1986); Jampole v. Touchy, 673 S.W.2d 569, 572 (Tex.1984). A trial court abuses its discretion when its ruling is so arbitrary and unreasonable that it amounts to a clear and prejudicial error of law. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). The relator who attacks the trial court's ruling must establish that the facts of the case and the applicable law permit the trial court to make but one decision. Mandamus will not issue to control the action of the lower court in a matter involving discretion. Id.

The party who seeks to limit discovery by asserting a privilege has the burden of proving the applicability of the particular privilege. Jordan v. Fourth Court of Appeals, 701 S.W.2d 644, 648 (Tex.1985); Peeples v. Fourth Court of Appeals, 701 S.W.2d 635, 637 (Tex.1985); Giffin v. Smith, 688 S.W.2d 112, 114 (Tex.1985). We must determine whether relators proved themselves entitled to the privileges. See Weisel Enterprises, Inc. v. Curry, 718 S.W.2d 56 (Tex.1986).

Post-Accident Investigation Privileges

The defendants claim post-accident investigation privileges for all four documents. As interpreted by the supreme court in Loftin v. Martin, 776 S.W.2d 145 (Tex.1989), Stringer v. Eleventh Court of Appeals, 720 S.W.2d 801, 802 (Tex.1986), and Turbodyne Corp. v. Heard, 720 S.W.2d 802 (Tex.1986), the privileges afforded post-accident investigations under Tex.R.Civ.P. 166b(3) are applicable if a suit has already been initiated, or if there is good cause to believe suit will be filed. The investigative privileges generally involve attorney work product, trial consultants, witness statements, and party communications. In applying the anticipation of litigation standard, there is no reason to differentiate between the investigative privileges. See, e.g., Texas Dept. of Mental Health & Mental Retardation v. Davis, 775 S.W.2d 467 (Tex.App.--Austin 1989, orig. proceeding) (no differentiation between work product and party communication privileges); Toyota Motor Sales, U.S.A. v. Heard, 774 S.W.2d 316 (Tex.App.--Houston [14th Dist.] 1989, orig. proceeding) (applying anticipation of litigation standard to work product and party communications privileges).

In asserting investigative privileges, the party seeking to avoid discovery has the burden to prove that statements or documents were obtained in anticipation of litigation by showing that there was good cause to believe suit would be filed. Turbodyne Corp. v. Heard, 720 S.W.2d at 803; see generally Cassidy & Rice, Privileges and Discovery: Part One, The Expanding Scope of Discovery, 52 Tex.B.J. 462 (1989).

The Texas Supreme Court has established a two-prong test for determining whether an investigative report, claimed to be privileged as a party communication under rule 166b(3)(d), was prepared in anticipation of litigation. Flores v. Fourth Court of Appeals, 777 S.W.2d 38 (Tex.1989). The court stated The first prong requires an objective examination of the facts surrounding the investigation. Consideration should be given to outward manifestations which indicate litigation is imminent. The second prong utilizes a subjective approach. Did the party opposing discovery have a good faith belief that litigation would ensue? There cannot be good cause to believe a suit will be filed unless elements of both prongs are present. Looking at the totality of the circumstances surrounding the investigation, the trial court must then determine if the investigation was done in anticipation of litigation. Unless there is an abuse of discretion, the trial court's ruling should not be disturbed.

Id. Good cause thus requires proof of both (1) objective evidence and (2) a subjective good faith belief that suit will be filed. Texas Dept. of Mental Health & Mental Retardation v. Davis, 775 S.W.2d at 467. The mere fact that an accident occurred is not sufficient to establish good cause for anticipation of suit. Stringer v. Eleventh Court of Appeals, 720 S.W.2d at 802. Good cause to believe a suit will be filed requires some outward manifestations of future litigation by the party having a cause of action, not the party trying to avoid discovery. Phelps Dodge Refining Corp. v. Marsh, 733 S.W.2d 359, 360-61 (Tex.App.--El Paso 1987, orig. proceeding). Examples of outward manifestation may consist of the plaintiff's hiring an attorney or private investigator, or the plaintiff's beginning an investigation of the accident. Id. Past experience will not suffice to establish good cause. Id. The focus of the determination of whether a defendant has good cause to believe a suit will be filed is on the actions of the party having a cause of action, not on the privilege-invoking party's subjective determination that it is anticipating litigation.

In Flores v. Fourth Court of Appeals, 777 S.W.2d at 38, the supreme court held that the filing of a notice of claim for workers' compensation does not constitute litigation. In the opinion, the court emphasized the wide discretion of the trial court and the limited scope of mandamus review. Id. at 41.

In applying Flores, the Austin Court of Appeals found that the trial court did not abuse its discretion in ordering production of an investigation report requested by a state agency's director of legal services. Texas Dept. of Mental Health & Mental Retardation v. Davis, 775 S.W.2d at 471-72. The in-house lawyer made his request for an investigation within hours of the death that ultimately resulted in the lawsuit. The only evidence before the trial court supporting the relator's claim of anticipation of litigation was the in-house lawyer's affidavit, in which he stated that, upon explanation of the circumstances of the decedent's death, he "formed the opinion that there was significant potential for litigation against the State and its employees," and that he makes "requests of this sort only when I am convinced that litigation will ultimately be filed."

Apparently concerned with lack of evidence of the plaintiffs' actions that might indicate their intention to litigate, the Austin court noted that the record did not reflect whether the decedent's parents had even...