In re DCP Midstream, L.P.
| Decision Date | 07 October 2014 |
| Docket Number | NUMBER 13-14-00502-CV |
| Court | Court of Appeals of Texas |
| Parties | IN RE DCP MIDSTREAM, L.P. |
On Petition for Writ of Mandamus.
MEMORANDUM OPINIONBefore Justices Rodriguez, Benavides, and Perkes
1
Relator, DCP Midstream, L.P. ("DCP"), filed a petition for writ of mandamus on September 8, 2014, seeking to compel the trial court2 to allow the discovery of a settlement agreement between the plaintiffs and real parties in interest, Leonard May andCatherine May, and settling defendant Apache Corporation ("Apache"). We conditionally grant the petition for writ of mandamus.
According to the allegations in their fifth amended original petition, the Mays are the owners of a ranch located in Jim Wells, Kleberg, and Nueces Counties.3 The Mays alleged that Apache, through its oil and gas operations on the ranch, breached a surface use agreement with the Mays and that DCP breached a pipeline easement and surface use agreement with the Mays. The Mays alleged that both Apache and DCP committed tortious acts on the property resulting in surface, subsurface, and groundwater contamination. The Mays' causes of action against both Apache and DCP included breach of contract, negligence, trespass, nuisance, statutory causes of action under the Texas Natural Resources Code, and a request for declaratory relief. DCP filed cross-claims against Apache regarding these same issues.
On July 15, 2013, the Mays entered into a settlement agreement with Apache. Pursuant to that settlement agreement, on July 24, 2013, the trial court granted a joint motion for dismissal filed by the Mays and Apache and dismissed all of the Mays' claims against Apache with prejudice. DCP continued to litigate its cross claims against Apache, alleging that Apache was responsible for all or part of the damages that the Mays sought against DCP. On November 12, 2013, Apache filed a motion for summary judgment on both "no evidence" and traditional grounds against DCP on the basis that no defendant has a right of contribution against any settling person. See TEX. CIV. PRAC. & REM. CODEANN. § 33.015(d) (West, Westlaw through 2013 3d C.S.) ("No defendant has a right of contribution against any settling person."). On January 15, 2014, the trial court granted Apache's motion for summary judgment as to DCP's cross-claims. Accordingly, the trial court dismissed DCP's cross claims against Apache with prejudice and dismissed Apache from the case.
After the Mays settled with Apache, DCP requested that the Mays and Apache provide DCP with a copy of the settlement agreement pursuant to the requests for disclosure that DCP had propounded on the Mays and Apache. See TEX. R. CIV. P. 194.2(h); 192.3(h). Both refused. On November 22, 2013, DCP filed a motion to compel disclosure of the settlement agreement, and on December 5, 2013, DCP filed an amended motion to compel. Apache filed a response to the motion to compel, acknowledging that the amount of the settlement and the scope of the claims released were "likely" discoverable, but contending that the remainder of the settlement agreement was "irrelevant, not calculated to lead to the discovery of admissible evidence at trial, and should be protected as confidential information between [the Mays] and Apache." Apache provided the trial court with (1) an unredacted copy of the settlement agreement; and (2) a redacted version of the settlement agreement in which Apache had "penciled through the portions that it claims are irrelevant to any defense of DCP" for in camera inspection. Apache asserted that it was prohibited from "unilaterally" producing a copy of the settlement agreement because "confidentiality of the [settlement agreement] must [be] maintained by the parties" and because the agreement could not be produced "absent an [o]rder compelling production." According to Apache's response, "[the Mays] objected to production of the Settlement Agreement, and take the positon that its contents would notbe relevant to any remaining claim against any remaining defendant." Apache further stated that "it is important to note that [the Mays] were very careful in the crafting of the Agreement so as not to impact or impair in any respect Plaintiffs' claims against DCP." The Mays did not file a response to DCP's motion to compel or amended motion to compel.
The trial court held a hearing on DCP's amended motion to compel on December 12, 2013. On December 17, 2013, the trial court sent an email ruling to the parties that stated as follows:
Counselors,
Rather than delay this matter with a writ of mandamus, I am inclined to initially rule on the motion to compel disclosure of the settlement agreement in hopes that it may resolve the motions for summary judgment as alluded by [counsel for DCP].
In reading the rule, the cases, and secondary material, there is no absolute right to disclosure of a settlement agreement. Only those portions relevant to the controversy and overlapping issues are discoverable. I don't know who has the burden, but the Movant has presented a strong case, and Apache by its own words concedes entitlement to portions.
I hereby Order the disclosure of those portions of the settlement agreement which outline the claims released and preserved. I do not allow discovery of the amounts of the settlement. I expect the Mays and Apache to jointly redact those portions not relevant to the legal concerns of DCP.
On January 2, 2014, counsel for the Mays sent a redacted version of the settlement agreement to DCP. On February 18, 2014 counsel for DCP sent a letter to the trial court requesting that it issue a signed order on the disclosure of the settlement agreement.
By order signed on February 27, 2014, the trial court granted in part and denied in part DCP's motion to compel. The order reads in relevant part:
(1) Only those portions of the settlement agreement which outline the claims released and preserved are ordered to be disclosed. The parties to that agreement shall jointly redact those portions not relevant to the legal concerns of Defendant DCP.
(2) Amounts of the settlement shall likewise be redacted jointly by the parties to that agreement.
DCP alleges that it did not receive notice that the trial court had signed this order until August 29, 2014. DCP contends that it called the court the following week to see if the proposed order had been signed, but the court manager indicated it had not. The settlement agreement, as redacted by the Mays and Apache and provided to DCP, appears to comprise twenty-two pages of content, excluding signature blocks, of which approximately twelve pages have been redacted.4
This original proceeding ensued. By one issue, DCP contends the trial court erred in refusing to order the disclosure of (a) the settlement amount, and (b) the full contents of the settlement agreement. In connection with this issue, DCP asserts that existing law requires the disclosure of the settlement agreement; the settlement agreement is relevant and necessary for DCP to receive credit for the injuries for which the Mays have already been compensated; the settlement agreement is relevant and necessary for DCP to be able to effectively examine the witnesses at trial; and discovery of the settlement agreement is necessary in view of the numerous overlapping claims and alleged injuries.DCP further contends that the Mays failed to carry their burden to demonstrate that the settlement agreement is not relevant to the issues remaining in this case.
The Court requested a response from the real parties in interest or any others whose interest would be directly affected by the relief sought. The Mays filed a response to the petition for writ of mandamus. They contend that DCP failed to timely seek relief from the trial court's order so its request for relief is barred by laches and waiver; that the trial court did not abuse its discretion by ordering the "limited disclosure of only relevant portions of a settlement agreement"; that DCP has an adequate remedy by appeal; and that the trial court's order granting summary judgment on DCP's cross-claims against Apache is a "dispositive ruling that there is no evidence that Apache caused or contributed to cause any harm for which DCP is now sued," which, according to the Mays, "clearly shows that the settlement is not relevant to the issues between the Mays and DCP." DCP filed a reply to the response filed by the Mays. Apache did not file a response to the petition for writ of mandamus.
To be entitled to the extraordinary relief of a writ of mandamus, the relator must show that the trial court abused its discretion and that there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding). The relator has the burden of establishing both prerequisites to mandamus relief, and this burden is a heavy one. In re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (orig. proceeding) (per curiam).
A trial court clearly abuses its discretion if it reaches a decision that is so arbitrary and unreasonable that it amounts to a clear and prejudicial error of law or if it clearly failsto analyze the law correctly or apply the law correctly to the facts. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam). The adequacy of an appellate remedy must be determined by balancing the benefits of mandamus review against the detriments. In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex. 2008) (orig. proceeding). Because this balance depends heavily on circumstances, it must be guided by the analysis of principles rather than the application of simple rules that treat cases as categories. In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex. 2008) (orig. proceeding). We evaluate the benefits and detriments of mandamus review and consider whether mandamus will preserve important substantive and...
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