Kidd Pipeline and Specialties Inc. v. Campagna, A14-85-865-CV

• Decision Date: 05 June 1986
• Docket Number: No. A14-85-865-CV,A14-85-865-CV
• Citation: 712 S.W.2d 238
• Parties: KIDD PIPELINE AND SPECIALTIES INC., Appellant, v. James Craig CAMPAGNA, Dominick Campagna, Jr., Individually and d/b/a Cam Industries, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 238

712 S.W.2d 238

KIDD PIPELINE AND SPECIALTIES INC., Appellant, v. James Craig CAMPAGNA, Dominick Campagna, Jr., Individually and d/b/a Cam Industries, Appellees.

No. A14-85-865-CV.

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

June 5, 1986.

Rehearing Denied July 3, 1986.

Raymond C. Kerr, Houston, for appellant.

Leonard M. Roth, Houston, for appellees.

Before J. CURTISS BROWN, C.J., and CANNON and ROBERTSON, JJ.

OPINION

J. CURTISS BROWN, Chief Justice.

This is an appeal from an order of dismissal. The trial court dismissed appellant's cause of action against appellees due to the failure of appellant to comply with discovery orders. In two points of error appellant argues that the trial court abused its discretion in dismissing the lawsuit. We affirm the judgment of the trial court.

Kidd Pipeline and Specialties, Inc., (Kidd or appellant) is in the business of manufacturing and fabricating urethane products. James Craig Campagna (Campagna) was a production superintendant for Kidd who terminated his employment in December of 1981. Campagna and Dominick Campagna, Jr., (Jr.) formed Cam Industries (Cam), which became a competitor of Kidd. At the time Campagna worked for Kidd and for a time after he left, Doris Davis (Doris) was the President of Kidd.

On June 22, 1982, Kidd filed suit seeking to enjoin Campagna, Jr., and Cam from using information learned by Campagna while in the employment of Kidd. Kidd alleged that the manufacturing and fabricating process developed by its officers and agents are unique in the industry. Due to these developments Kidd claimed to gain an advantage in a highly competitive market. Kidd alleged that Campagna took this information and was using it to his advantage in his new company. Kidd additionally alleged that Campagna should be enjoined from using customer lists and information concerning needs of such customers obtained while in the employment of Kidd. On July 13, 1982, the trial court granted a temporary injunction against Campagna, Jr., and Cam.

After the temporary injunction was granted appellees tried to start discovery. On November 9, 1982, the trial court signed an order compelling Kidd to produce documents requested by appellees. By agreement of counsel these documents were to be produced on November 12, 1982, when the depositions of Billy (Billy) and Doris Davis (Doris) were to be taken. On this date Billy presented himself and was deposed. Doris refused to be deposed. The documents were not produced. The testimony of Doris was crucial because according to Billy, Doris was the sole possessor of all the knowledge concerning Kidd's secrets in the manufacturing of polyurethane products.

On or about January 6, 1983, appellees filed a Motion for Sanctions due to the failure of Kidd to produce the requested documents and Doris' failure to appear for deposition. On or about January 21, 1983, the trial court ordered Doris to appear for deposition within 30 days but no later than February 18, 1983, and ordered production of the requested documents. Appellees filed a second Motion for Sanctions on or about September 9, 1983, due to the failure of Doris to comply with the court order of January 21, 1983, and the failure of Kidd to produce the requested documents. A notation on the court's docket sheet indicates that on October 3, 1983, the court ordered Doris to appear for deposition on October 13, 1983. No deposition was taken on October 13. Appellees again set Doris' deposition for September 13, 1984, and once again she failed to appear. Appellees were finally able to begin to depose Doris when she complied with a bench order, made on May 3, 1985, to appear in the courtroom on May 17, 1985, to present herself for deposition.

At her deposition on May 17, Doris frustrated appellees attempt to depose her. Doris, by this time claimed that she no longer worked for Kidd although she had an office at Kidd, claimed she had access to documents only for her own use and brought her own attorney to the deposition. She was evasive in answering most questions and a short time into the deposition she had an alleged nervous breakdown. She claimed to be unable to continue. Doris subsequently tendered an affidavit by a doctor stating that she was mentally incapable of giving testimony in the deposition format. May 17, 1985, was also the date when Kidd was supposed to produce the requested documents. The attorney for Kidd stated during the attempted deposition of Doris that he had eleven boxes of records available for inspection. But Kidd's attorney refused examination of the eleven boxes by appellees and their counsel. Kidd never produced or filed the documents with the court.

At a hearing on July 12, 1985, the court stated that if Doris did not make herself available to be deposed he would not make the defendants go to trial without her deposition and would dismiss the case. Additionally, a further agreement was reached as to the requested documents. Kidd's CPA was supposed to review the corporate records to delete any proprietary information and then present himself for deposition. Shortly thereafter, the CPA requested a transcript of the July 12th hearing so that he could better understand the scope of the court's order. On July 22, 1985, the CPA received a transcript of the July 12th hearing and on the next day he advised Kidd's attorney that he believed he might be giving away proprietary information and insisted on further clarification from the court. On July 23, 1985, Kidd's temporary injunction was dissolved on appellees' motion. The court then ruled that the entire case would be dismissed if the documents were not produced before the docket call of the case. On the day of the docket call, the case was dismissed due to the failure to secure the deposition of Doris and the failure of Kidd to produce the documents as ordered by the court.

In two points of error appellant argues that the trial court abused its discretion by granting sanctions and dismissing appellant's case. In its first point of error, appellant contends that Doris was no longer a party to the lawsuit but merely a witness, thus the court could not grant sanctions against appellant due to the failure of a non-party witness to comply with a discovery request. This argument is predicated on the fact that as of May 17, 1985, when Doris appeared for deposition, she claimed to no longer hold any formal position in the management of Kidd. Appellant also argues that Doris was not given proper notice of the deposition, that she was mentally incapable of giving her deposition, and that other forms of discovery were available. In its second point of error appellant argues that the trial court abused its discretion because appellant had attempted to comply with the court's discovery order but was frustrated in attempting full compliance. This argument was based on appellant's attempt to delete what it considered to be confidential and proprietary information before handing over corporate documents to appellees.

The purpose of discovery proceedings is to allow the parties to obtain full knowledge of facts and issues before trial. West v. Solito, 563 S.W.2d 240, 243 (Tex.1978). The trial court has great latitude in ordering discovery and such orders will not be set aside unless there is a clear abuse of discretion. Meyer v. Tunks 360 S.W.2d 518 (Tex.1962); Terr v. Duddleston, 641 S.W.2d 569, 579 (Tex.App.--Houston [14th Dist.] 1982, rev'd on other grounds, 664 S.W.2d 702 (1984). Our standard of review is whether the court's ruling was "arbitrary or unreasonable." Terr v. Duddleston, 641 S.W.2d at 579, citing, ...