In re Allstate Fire & Cas. Ins. Co.

• Decision Date: 07 January 2021
• Docket Number: NO. 14-20-00430-CV,14-20-00430-CV
• Citation: 617 S.W.3d 635
• Parties: IN RE ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, Relator
• Court: Texas Court of Appeals

617 S.W.3d 635

IN RE ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, Relator

NO. 14-20-00430-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinions filed January 7, 2021

Kevin Jewell, Justice

In this original proceeding, relator Allstate Fire and Casualty Insurance Company seeks mandamus relief from the trial court's orders compelling a deposition of relator's corporate representative on several topics related to the plaintiff's claim for underinsured motorist ("UIM") coverage. See Tex. Gov't Code § 22.221 ; see also Tex. R. App. P. 52. We conditionally grant the petition in part and deny it in part.

Background

Plaintiff and real party in interest, Reynaldo Arredondo, was involved in a motor vehicle accident with Daniel Guzman. Arredondo asserted a claim for personal injuries against Guzman, which Guzman and his automobile insurance carrier settled before Arredondo filed suit.

Arredondo was insured under an automobile insurance policy issued by Allstate. The parties agree that the policy provides for UIM coverage. Generally, Texas UIM coverage provides for "payment to the insured of all sums which he shall be legally entitled to recover as damages from owners or operators of underinsured motor vehicles because of bodily injury or property damage in an amount up to the limit specified in the policy, reduced by the amount recovered or recoverable from the insurer of the underinsured motor vehicle." Brainard v. Trinity Univ. Ins. Co. , 216 S.W.3d 809, 812 (Tex. 2006).

Arredondo filed this lawsuit against Allstate, seeking a declaratory judgment that he is entitled to UIM benefits under the Allstate policy and the amount of benefits. The petition included allegations that Guzman's negligence caused the accident and that Arredondo was injured as a result. Arredondo asserted neither breach of contract nor extra-contractual claims. Allstate answered with a general denial. Allstate did not assert any affirmative defenses but stated in its answer that the policy contains conditions and exclusions that Allstate does not waive.

Arredondo subsequently noticed the deposition of Allstate's corporate representative on the following twelve topics:

1. Facts surrounding Plaintiff's claims;

2. Validity and specifics of the insurance policy sold to Plaintiff;

3. Plaintiff's rights under the insurance policy at issue;

4. Requirements for coverage and payment under the policy;

5. Investigation of Plaintiff's claims;

6. Reason(s) for denying or limiting Plaintiff's claims;

7. Defendant's investigation of the tortfeasor;

8. Defenses raised in any of Defendant's live pleadings;

9. Possible defenses not yet raised in Defendant's live pleadings;

10. Damage model proposed by Defendant;

11. Process of determining liability and amount of damages in this claim; and

12. Settlement negotiations in this case.

Allstate filed a motion to quash the deposition. The deposition should be quashed, Allstate asserted, because: (1) the deposition of its corporate representative is not reasonably calculated to lead to the discovery of admissible evidence in Arredondo's UIM case; (2) no one at Allstate has personal knowledge about the facts of the accident or Arredondo's claimed damages; (3) its handling of Arredondo's claim is not at issue and, in any event, will not be ripe until liability and damages have been established in the accident case; and (4) the work product of a corporate representative designated by Allstate is protected under the work product privilege.

Arredondo filed a response and an amended response to the motion to quash. In his amended response, Arredondo argued that: (1) he is entitled to a corporate representative deposition in a UIM case under Texas law, because an inability to depose a representative of the only defendant impairs his ability to prove the relevant facts necessary to trigger UIM coverage; (2) the representative's asserted lack of personal knowledge is not a proper objection; and (3) not all of Allstate's investigation is privileged.

The trial court held a hearing on Allstate's motion to quash on January 6, 2020 and denied Allstate's motion that day. Counsel later communicated about available deposition dates, and during the conversation Allstate's counsel advised that he intended to seek rehearing with the trial court and, if necessary, file for mandamus relief in the court of appeals.

On February 10, 2020, Arredondo served another notice to take the deposition of Allstate's corporate representative. Allstate filed a timely motion to quash the deposition based on its objections to the time and place of the proposed deposition.

Arredondo then filed a motion to compel the deposition. Arredondo did not assert new arguments but requested the court to enforce its January 6, 2020 order and compel the unrestricted deposition of Allstate's representative.

Allstate filed a document entitled "Response To Motion To Compel And Motion To Reconsider, Or In The Alternative Motion To Limit Scope." In this filing, Allstate requested the trial court to reconsider its January 6, 2020 ruling and quash the deposition in its entirety for the reasons stated in the motion to quash. Alternatively, Allstate asked the court to at least preclude inquiry into topics 6, 10, 11, and 12¹ because those topics (1) would not lead to the discovery of admissible evidence on the issues of liability or the amount of Arredondo's damages, and (2) delve into information that was prepared in anticipation of litigation and is protected by the work product and trade secret privileges. Allstate also singled out topic 9—regarding possible defenses not yet raised in Allstate's live pleadings—as objectionable for additional reasons, namely that it is speculative, seeks to discover work product, and would unreasonably require a layperson representative to testify regarding affirmative defenses that have not been placed in issue by Allstate's answer.

After a hearing on April 13, 2020, the trial court signed an order on April 27, 2020 directing Allstate to produce a corporate representative on the twelve topics identified above.

The deposition did not occur, and on June 9, 2020, Arredondo filed his second motion to compel, which he set for hearing on June 29, 2020. Allstate filed its petition for writ of mandamus in this court on June 15, 2020, challenging the trial court's January 6, 2020 and April 27, 2020 orders. We granted Allstate's motion for temporary relief and stayed the challenged orders pending our decision on Allstate's petition.

Mandamus Standards

To obtain mandamus relief, a relator generally must show both that the trial court clearly abused its discretion and that the relator has no adequate remedy by appeal. In re Dawson , 550 S.W.3d 625, 628 (Tex. 2018) (orig. proceeding) (per curiam) ; In re Prudential Ins. Co. of Am. , 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding). A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if it clearly fails to analyze the law correctly or apply the law correctly to the facts. In re H.E.B. Grocery Co., L.P. , 492 S.W.3d 300, 302-03 (Tex. 2016) (orig. proceeding) (per curiam) ; In re Cerberus Capital Mgmt. L.P. , 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam). We review the trial court's legal conclusions with limited deference. See Walker v. Packer , 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). The relator must establish that the trial court could reasonably have reached only one decision. Id. Appeal is not an adequate remedy when the appellate court would not be able to cure the trial court's discovery error on appeal. In re Dana Corp. , 138 S.W.3d 298, 301 (Tex. 2004) (orig. proceeding) (per curiam) ; In re Ford Motor Co. , 988 S.W.2d 714, 721 (Tex. 1998) (orig. proceeding).

Analysis

In seeking mandamus relief, Allstate contends that the trial court abused its discretion by allowing the deposition because the topics of inquiry exceed the scope of relevant issues necessary to adjudicate the underlying liability and damages determinations, and, to the extent any topics are relevant to the tortfeasor's liability and Arredondo's damages, any Allstate representative would lack personal knowledge of those facts. Allstate further asserts that deposing its representative on the existence, extent, or duration of Arredondo's claimed injuries is unreasonable and unduly burdensome because that information is more readily obtainable by Arredondo, who has superior access to his medical records. Allstate also argues that certain topics seek privileged information. Finally, Allstate contends that it lacks an adequate remedy by appeal because it is being put to the expense of presenting a witness to testify on matters irrelevant to any pending claim.

A. Laches

At the outset, we address Arredondo's contention that Allstate's mandamus petition is barred by laches because Allstate delayed too long in seeking appellate relief. The trial court signed the orders at issue on January 6, 2020 and April 27, 2020. Allstate did not file its mandamus petition until June 15, 2020. According to Arredondo, this delay in seeking relief justifies denying Allstate's petition without reaching the merits.

Although mandamus is not an equitable remedy, its issuance is largely controlled by equitable principles, including the principle that equity aids the diligent and not those who slumber on their rights. Rivercenter Assocs. v. Rivera , 858 S.W.2d 366, 367 (Tex. 1993) (orig. proceeding). Whether a party's delay in asserting its rights precludes mandamus relief depends on the circumstances. In re Oceanografia, S.A. de C.V. , 494 S.W.3d 728, 729 (Tex. 2016) (orig. proceeding) (per curiam). In examining this issue, we consider whether there is any justification for the delay, whether the party seeking mandamus bears fault for the delay, and whether the delay has prejudiced the opposing party. See id. at 730-31 ; see also, e.g., In re Int'l...