In re Liberty Cnty. Mut. Ins. Co.

• Decision Date: 07 July 2020
• Docket Number: NO. 14-19-00932-CV,14-19-00932-CV
• Parties: IN RE LIBERTY COUNTY MUTUAL INSURANCE COMPANY, Relator
• Court: Texas Court of Appeals

606 S.W.3d 866

IN RE LIBERTY COUNTY MUTUAL INSURANCE COMPANY, Relator

NO. 14-19-00932-CV

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

Opinions filed July 7, 2020

Rehearing En Banc Denied September 15, 2020

Jerry Zimmerer, Justice

On November 20, 2019, relator Liberty County Mutual Insurance Company filed a petition for writ of mandamus in this court. See Tex. Gov't Code Ann. § 22.221 ; see also Tex. R. App. P. 52. In the petition, relator asks this court to compel the Honorable Tanya Garrison, presiding judge of the 157th District Court of Harris County, to set aside her October 7, 2019 order directing Liberty to produce its corporate representative for deposition. We deny the petition.

BACKGROUND

Marcia Forrest was involved a motor vehicle accident with an unidentified driver who fled the scene. Prior to the accident, Liberty issued a policy to Forrest providing uninsured/underinsured motorist coverage ("UIM"). Forrest submitted a claim to Liberty for payment of UIM benefits. After Liberty failed to pay Forrest UIM benefits, Forrest sued Liberty for breach of contract and breach of the duty of good faith and fair dealing. Forrest also sued for a declaratory judgment that her claims for UIM benefits are covered under the policy and the negligence of the other driver caused her damages and the amount of UIM benefits she is entitled to recover from Liberty.

Liberty filed a motion to (1) sever Forrest's contractual and extra-contractual claims from the underlying car wreck case, arguing that no legally cognizable claim for UIM benefits exists until liability and damages have been judicially determined in a judgment, and (2) abate all discovery related to Forrest's claims for UIM benefits. On November 29, 2018, the trial court granted Liberty's motion, severed all contractual and extra-contractual claims into a separate action, and abated all activity concerning those claims. Only the negligence claim was left in the original suit.

In February 2019, Forrest first requested a date to take the deposition of a corporate representative for Liberty on 29 topics. Liberty did not agree to produce a representative for deposition. In April 2019, Liberty filed a stipulation that (1) it had issued a policy to Forrest and Forrest is covered under the policy; (2) the policy was in full force and effect on the date of the accident; (3) the policy provided $500,000 per person in underinsured motorist coverage to Forrest; and (4) Liberty previously paid $5,000 in PIP benefits to Forrest. On September 16, 2019, Forrest filed a motion to compel the deposition of Liberty's corporate representative. On October 7, 2019, the trial court granted the motion to compel, in part, and ordered the deposition of a corporate representative for Liberty, narrowing the scope of the deposition to the following 13 topics regarding fault for the accident and Forrest's damages:

• Whether Forrest was involved in a motor vehicle collision.

• Who Liberty contends was at fault for the collision and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest was not injured in the collision and the evidence Liberty has to support its contention.

• What injuries Liberty contends that Forrest suffered or sustained in the collision and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest suffered from one or more pre-existing conditions before the collision and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest suffered from one or more pre-existing conditions before the collision that were aggravated by that collision, and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest was involved in other collisions or other incidents before the subject collision that caused physical injuries similar to the ones claimed by Forrest in this lawsuit, and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest was involved in other collisions or other incidents after the subject collision that caused physical injuries similar to the ones claimed by Forrest in this lawsuit, and the evidence Liberty has to support its contention.

• Whether Liberty contends that the negligence of the other driver involved in the collision proximately caused the collision and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest's negligence proximately caused the collision and the evidence Liberty has to support its contention.

• Whether Liberty contends that the collision was not severe enough to cause any physical injuries to Forrest and the evidence Liberty has to support its contention.

• Whether Liberty contends that the collision was not severe enough to cause the physical injuries Forrest complains of in this lawsuit, and the evidence Liberty has to support its contention.

• Whether Liberty contends that Forrest has failed in any way to mitigate her damages sustained in the collision and the evidence Liberty has to support its contention.

In this mandamus proceeding, Liberty contends that the trial court abused its discretion by ordering Liberty to produce its corporate representative for deposition and it does not have an adequate remedy by appeal.

STANDARD OF REVIEW

Ordinarily, to be entitled to a writ of mandamus, relators must show that the trial court clearly abused its discretion, and that they lack an adequate remedy by appeal.

In re Dawson , 550 S.W.3d 625, 628 (Tex. 2018) (original proceeding) (per curiam). 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).

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 analysis of principles rather than simple rules that treat cases as categories. In re McAllen Med. Ctr., Inc. , 275 S.W.3d 458, 464 (Tex. 2008) (orig. proceeding). In evaluating benefits and detriments, we consider whether mandamus will preserve important substantive and procedural rights from impairment or loss. In re Prudential Ins. Co. of Am. , 148 S.W.3d 124, 136 (Tex. 2004) (orig. proceeding). We also consider whether mandamus will "allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments." Id. Finally, we consider whether mandamus will spare the litigants and the public "the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings." 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

Liberty asserts that the trial court abused its discretion because UIM coverage depends on the liability of the alleged at-fault motorist and Forrest needs to first obtain a judicial determination that the other driver caused the accident.

A trial court generally has discretion to determine the scope of discovery. In re Nat'l Lloyds Ins. Co. , 532 S.W.3d 794, 802 (Tex. 2017) (orig. proceeding). "Our procedural rules define the general scope of discovery as any unprivileged information that is relevant to the subject of the action, even if it would be inadmissible at trial, as long as the information sought is reasonably calculated to lead to the discovery of admissible evidence." In re Nat'l Lloyds Ins. Co. , 507 S.W.3d 219, 223 (Tex. 2016) (orig. proceeding) (per curiam) (internal quotation marks and citations omitted). Information is relevant if it tends to make the existence of a fact that is of consequence to the determination of the action more or less probable than it would be without the information. Tex. R. Evid. 401. The phrase "relevant to the subject matter" is to be broadly construed. In re Nat'l Lloyds Ins. Co. , 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding) (per curiam). Discovery requests must be reasonably tailored to include only matters relevant to the case. In re Am. Optical Corp. , 988 S.W.2d 711, 713 (Tex. 1998) (orig. proceeding) (per curiam). A trial court abuses its discretion if it orders discovery that exceeds what the rules of civil procedure permit. In re N. Cypress Med. Ctr. Operating Co. , 559 S.W.3d 128, 130–31 (Tex. 2018) (orig. proceeding).

UIM coverage provides payment to the insured of all amounts that the insured is legally entitled to recover as damages from owners or operators of underinsured vehicles because of bodily injury or property damage, not to exceed the limit specified in the insurance policy. Farmers Tex. Cty. Mut. Ins. Co. v. Okelberry , 525 S.W.3d 786, 790 (Tex. App.—Houston [14th Dist.] 2017, pet. denied) (citing Tex. Ins. Code Ann. § 1952.106 ). A negligent party is underinsured when the available proceeds of his liability insurance are insufficient to compensate for the injured party's actual damages. Id. (citing Stracener v. United Servs. Auto. Ass'n , 777 S.W.2d 378, 380 (Tex. 1989) ).

The scope of relevant discovery in UIM cases differs from other insurance disputes because, unlike most first-party cases in which the terms of the policy alone dictate the outcome, UIM coverage hinges on the liability of the alleged uninsured, at-fault third-party motorist under applicable tort law. In re Liberty Cty. Mut. Ins. Co. , 537 S.W.3d 214, 220 (...