IN RE UNIVAR USA, INC.

• Decision Date: 21 April 2010
• Docket Number: No. 09-10-00148-CV.,09-10-00148-CV.
• Citation: 311 S.W.3d 175
• Parties: In re UNIVAR USA, INC.
• Court: Texas Court of Appeals

311 S.W.3d 175

In re UNIVAR USA, INC.

No. 09-10-00148-CV.

Court of Appeals of Texas, Beaumont.

Submitted April 5, 2010.

Decided April 21, 2010.

COPYRIGHT MATERIAL OMITTED

Robert Scott, Barry Abrams, Marquel S. Jordan, Lance Leisure, Abrams Scott & Bickley, L.L.P., Houston, for relator.

Darren L. Brown, J. Keith Hyde, Paul F. "Chip" Ferguson, D'Juana Parks, John A. Cowan, Provost Umphrey Law Firm, L.L.P., Beaumont, for real parties in interest.

Before McKEITHEN, C.J., GAULTNEY and HORTON, JJ.

OPINION

PER CURIAM.

In this original proceeding, we must determine whether the remaining nonsettling defendant is entitled to discover the contents of settlement agreements between the real parties in interest and the defendants with whom they settled. Relator is Univar USA, Inc. ("Univar"), who allegedly supplied benzene to John Thompson's employer. The real parties in interest are the Estate of John Thompson and his survivors ("Thompsons").

Background

In February 2008, John and Carol Thompson filed suit against various suppliers of benzene-containing products and various oil and chemical companies on whose premises John had worked. Their original petition alleges that John contracted acute myelogenous leukemia (AML) from his occupational exposure to benzene. Univar, although not originally named as a defendant, was subsequently named as an additional defendant in the first amended petition filed by the Thompsons. In November 2009, John died, and in February 2010, the Thompsons amended their pleadings to substitute John's estate for John and to add John's surviving child as a plaintiff.

In April 2008, prior to John's death, John and Carol answered a set of "Master Requests for Disclosures."¹ With respect to settlement agreements, the "Master Requests for Disclosures" contain a request that the Thompsons disclose "Any settlement agreements described in Rule 192.3(g)."² The Thompsons answered this request: "None."

In December 2009, Univar requested the Thompsons supplement their answers to the "Master Requests for Disclosures." Univar also requested that the Thompsons supplement their discovery to reveal "the total amounts of the settlements reached with any defendants listed individually by party." In January 2010, Univar filed a motion to compel, and in its motion, asked the trial court to compel the Thompsons to supplement their disclosures, specifically requesting that the trial court compel the Thompsons to disclose the settlement agreements and the amounts of the settlements.

In February 2010, the trial court conducted a non-evidentiary hearing on Univar's motion to compel.³ When the trial court conducted the hearing, the Thompsons had neither filed a motion for protection, nor pled that the settlement agreements to which they were parties were privileged, either in whole or in part. At the hearing on Univar's motion to compel, the Thompsons argued that until a jury had awarded damages, the amounts involved in their settlements were irrelevant. Nevertheless, the Thompsons' attorney advised the trial court that he had offered to "let the Univar defendant know which of the other defendants in the case have settled so that they would know the identity of the settling parties." With respect to the settlement amounts, the Thompsons' attorney asserted at the hearing that "those amounts are confidential," as there are "confidentiality agreements that have been entered with the other parties." Based on that argument, the Thompsons asserted that the amounts paid by each individual settling party should not be disclosed. At the conclusion of the hearing, the trial court did not rule on Univar's motion to compel the disclosure of the settlement agreements.

In March 2010, the Thompsons filed supplemental responses to the "Master Requests for Disclosures." With respect to disclosing whether the Thompsons had settled any of their claims, the Thompsons added the following to their prior response: "Plaintiff objects to this Request for Disclosure pursuant to the holdings of Palo Duro Pipeline Co., Inc., et al. v. Hon. Ann Cochran, Judge, 785 S.W.2d 455 (Tex.App.-Houston 14th Dist., 1990). See Plaintiff's response to Defendant's Motion to Compel on this issue." Once again, the Thompsons attached no evidence to their supplemental response to support their objection to producing the settlement agreements. In March 2010, the Thompsons also filed a written response to Univar's Motion to Compel.⁴ This response also contains no evidence to support the Thompsons' objection to producing the contents of the settlement agreements.

In late March 2010, approximately two weeks after the Thompsons filed their written response to Univar's motions to compel, the trial court entered an order that denied Univar's motion, "except to the extent that the Court ORDERS Plaintiffs, within 2 days of the signing of this order, to provide to counsel for Defendant Univar USA, Inc., the aggregate amount of any and all settlements agreed upon with regard to the claims made in this case and the identity of all parties who have agreed to contribute to such settlements." Univar filed its petition seeking a writ of mandamus on March 30, 2010.

Mandamus and Discovery Standards

For discovery matters, mandamus relief is generally appropriate only if a trial court abuses its discretion and the party resisting the discovery has no adequate appellate remedy. CSR Ltd. v. Link, 925 S.W.2d 591, 596 (Tex.1996) (orig.proceeding); Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992) (orig.proceeding). A trial court clearly abuses its discretion when its action is "`so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.'" Walker, 827 S.W.2d at 839 (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)).

Generally, the Texas Rules of Civil Procedure allow a party to discover "any matter that is not privileged and is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party." TEX.R. CIV. P. 192.3(a). With respect to documents, a party may obtain discovery of documents "that constitute or contain matters relevant to the subject matter of the action." TEX.R. CIV. P. 192.3(b).

The discovery of settlement agreements is specifically addressed by the Texas Rules of Civil Procedure. See TEX.R. CIV. P. 192.3(g). Rule 192.3(g) provides: "A party may obtain discovery of the existence and contents of any relevant portions of a settlement agreement. Information concerning a settlement agreement is not by reason of disclosure admissible in evidence at trial." Id. With respect to settlement agreements, the Texas Rules of Civil Procedure further require that a party, within thirty days after being served with a request, file a response to the request of another party for "any settlement agreements described in Rule 192.3(g)." TEX.R. CIV. P. 194.2(h), see also TEX.R. CIV. P. 194.3.

On March 25, 2010, the trial court denied Univar's motion to compel disclosure of the contents of the settlement agreements. The trial court did not require the settlement agreements to be produced for an in camera inspection; consequently, the settlement agreements are not in the record before us. We review the trial court's order to determine whether the trial court abused its discretion, and to determine whether Univar has an otherwise adequate appellate remedy.

Analysis

Generally, the Texas Civil Practice and Remedies Code requires the trial court, after first reducing the claimant's recovery by any percentage fault assigned to the claimant, to then further reduce the damages recovered by "the sum of the dollar amounts of all settlements." TEX. CIV. PRAC. & REM.CODE § 33.012 (Vernon 2008). Thus, the settlement agreements containing the dollar amounts of a claimant's settlements are relevant to a remaining nonsettling defendant in at least two ways; first, to determine the amount of its settlement credit after a trial is completed, and second, before trial, to determine whether any settlement demand being made is reasonable when compared to the likely outcome of a trial.

Had settlement with others been relevant only under the condition that the nonsettling defendant was entitled to a credit, the Texas Rules of Civil Procedure could have made them conditionally discoverable after the jury reached a verdict, and only if the jury determined the plaintiffs' damages. However, the settlement agreements were not made conditionally discoverable under the relevant rules of procedure. Instead, the Texas Rules of Civil Procedure require that settlement agreements be produced within thirty days of the service of the request. TEX.R. CIV. P. 194.3 (requiring, with respect to settlement agreements, the response to a request for disclosure filed "within 30 days after service of the request"). Because the Texas Rules of Civil Procedure expressly require settlement agreements to be produced before trial, the rules implicitly recognize that settlement agreements are relevant beyond their relevance to the trial court's mechanical calculation of the judgment.

In this case, it is undisputed that Univar served the Thompsons with a proper request for disclosure. Generally, settlement agreements are discoverable by nonsettling parties where they are shown to be relevant. TEX.R. CIV. P. 192.3(g); Ford Motor Co. v. Leggat, 904 S.W.2d 643, 649 (Tex.1995). Further, the general rule is that a party resisting discovery has the burden to plead and prove the basis for its objections. State v. Lowry, 802 S.W.2d 669, 671 (Tex.1991) (orig.proceeding).

In this case, the Thompsons objected to the request to supplement their disclosures. Objections to requests for disclosure are specifically not permitted by the Texas Rules of Procedure. TEX.R. CIV. P. 194.5. Nevertheless, a party is allowed to file a motion for a protective order pursuant to Rule 192.6, although the...