Scott v. Twelfth Court of Appeals

• Decision Date: 13 March 1992
• Docket Number: No. D-1418,D-1418
• Citation: 843 S.W.2d 439
• Parties: . Supreme Court of Texas
• Court: Texas Supreme Court

Page 439

843 S.W.2d 439

Earnest SCOTT v. TWELFTH COURT OF APPEALS.

No. D-1418.

Supreme Court of Texas.

March 13, 1992.

Rehearing Overruled April 15, 1992.

Dissenting Opinions Filed Dec. 16, 1992.

Paul M. Boyd, James T. Foley, Foley & Boyd, P.C., Tyler, for relator.

David W. Prasifka, Lorance & Thompson, Houston, Tom Henson, Michael A. Hatchell, Gregory D. Smith, Ramey, Flock, Jeffus, Crawford, Harper & Collins, Tyler, for respondent.

OPINION

PHILLIPS, Chief Justice.

This is an original mandamus proceeding. The parties in the underlying action dispute whether defendant's investigations of the accident are privileged from discovery because made in anticipation of litigation. The trial court ordered discovery of the investigations, but the court of appeals granted mandamus relief reversing that order. Earnest Scott, the party seeking discovery, asks us to reinstate the trial court's ruling. We conditionally grant the writ of mandamus.

Scott was injured at work on April 3, 1989, when a load of wood fell on the forklift he was operating. The overhead protective cage on the forklift gave way when struck by the wood. Scott sued Hyster Company, the manufacturer of the forklift, and Stewart & Stevenson, Inc., the seller of the forklift. American International Recovery, Inc., the workers' compensation carrier for Scott's employer, intervened to assert a subrogation claim.

The disputed discovery issue is whether Hyster's investigations of the accident conducted between April 12, 1989, the date Hyster learned of the accident, and May 19, 1989, the date the compensation carrier demanded reimbursement from Hyster, are privileged because made in anticipation of litigation. See Tex.R.Civ.P. 166b(3)(d). At the trial court's hearing on this issue, Hyster relied on the affidavit of its risk manager, Marvin Welch, which stated that he was informed of the accident by a written report from Stewart & Stevenson on April 12. The report 1) described the accident, 2) disclosed that after the accident occurred a representative of Scott's employer opined that the guard on the forklift was defective, and 3) advised that the compensation carrier had requested that the forklift parts be impounded. Welch stated that based on this information he was "convinced ... that a claim and lawsuit would eventually be pursued by the workers' compensation carrier and by Mr. Scott against Hyster Company." After receiving the report Welch immediately notified Hyster's products-liability attorneys and initiated an investigation.

Scott did not refute the information in Welch's affidavit. Instead, Scott pointed out that no one demanded compensation from Hyster until May 19, when the compensation carrier demanded reimbursement for the benefits paid Scott. Scott did not make demand on Hyster until September 12, 1989, and suit was not filed until October 1989.

After considering the affidavit and arguments of counsel, the trial court concluded that Hyster did not have good cause to believe a lawsuit would be filed until May 19, when it received the demand letter from the compensation carrier. The trial court thus held that investigations conducted between April 12 and May 19 were discoverable.

Upon Hyster's petition, the court of appeals issued a writ of mandamus vacating the trial court's order and rendering Hyster's investigations conducted after April 12 non-discoverable. Scott now asks us to issue a writ of mandamus vacating the court of appeals' action and reinstating the trial court's order.

Mandamus should issue only to correct a clear abuse of discretion where there is no adequate remedy by appeal. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). When this Court is reviewing the grant of a writ of mandamus by the court of appeals, the focus of our inquiry should be whether the trial court abused its discretion. If the trial court did not abuse its discretion, then the issuance of mandamus by the court of appeals is improper and constitutes an abuse of discretion. See Flores v. Fourth Court of Appeals, 777 S.W.2d 38 (Tex.1989); Loftin v. Martin, 776 S.W.2d 145 (Tex.1989).

A party contending that an investigation is privileged because made in anticipation of litigation must satisfy a two-prong test: 1) the facts must objectively indicate that litigation is imminent; and 2) the party must subjectively believe that litigation is imminent. Flores v. Fourth Court of Appeals, 777 S.W.2d 38 at 40-41. Determining whether a party has met this test is committed to the discretion of the trial court. Id.

The focus in this case is on the first prong. Welch's affidavit stated that he had a good-faith belief that litigation would ensue, and Scott does not challenge this assertion. Instead, Scott argues that the facts did not objectively support Welch's conclusion.

The issue is not whether the court of appeals could have justifiably found that Hyster satisfied the first prong of the Flores test based on an independent analysis of the evidence, but whether the trial court's decision exceeded its discretion. The evidence before the court did not compel a ruling that the test was met on any particular date prior to May 19. Welch knew that a representative of Scott's employer had stated that the forklift guard was defective, but he did not know whether the potential plaintiffs, Scott and the compensation carrier, shared this view. The compensation carrier had requested that the forklift parts be impounded, but this indicated only that it planned to investigate the accident, not that it necessarily would sue Hyster. Neither Scott nor the compensation carrier made demand on Hyster before May 19, and Hyster had no indication that Scott had consulted an attorney before then. Based on the record, the trial court's decision did not constitute an abuse of discretion.

Pursuant to Tex.R.App.P. 170, the Court determines that this cause should be submitted without oral argument. The writ of mandamus is conditionally granted. The writ will issue only if the court of appeals refuses to act in accordance with this opinion.

GONZALEZ, HECHT and CORNYN, JJ., note their dissent. (Dissenting opinion to follow.)

HECHT, Justice, dissenting.

Mandamus relief is so frequently sought and granted that to be accurate, we should consider labeling the writ occasional rather than extraordinary. This is a relatively recent development, as illustrated by the fact that the word "mandamus" appears in more reported decisions of Texas courts in the 15 years since 1978 than in well over a century before. Until the last decade or so, mandamus relief was rarely granted, partly because of its disruptive effect on proceedings in the trial court, and partly in recognition of the sheer impossibility of regular appellate review of interlocutory trial court rulings. These considerations are no less compelling today, as we acknowledged earlier this year in Walker v. Packer, 827 S.W.2d 833, 842 (Tex.1992):

Mandamus disrupts the trial proceedings, forcing the parties to address in an appellate court issues that otherwise might have been resolved as discovery progressed and the evidence was developed at trial. Moreover, the delays and expense of mandamus proceedings may be substantial.... The impact on the appellate courts must also be considered. We stated in [Braden v. Downey, 811 S.W.2d 922, 928 (Tex.1991) ] that "[t]he judicial system cannot afford immediate review of every discovery sanction." It follows that the system cannot afford immediate review of every discovery order in general.

Id. (citation omitted). For these reasons, the strict legal standards for granting mandamus have not been relaxed. To the contrary, we reaffirmed in Walker: " 'Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law.' " Id. at 839 (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)). The recent increase in granting mandamus relief is not due to any change in the reasons for restricting it or the requirements for obtaining it, but rather to a laxity in judicial enforcement of these requirements. As we noted in Walker, while no case ever rejected the prerequisite of an inadequate remedy by appeal, several decisions granting relief failed to explain how, or even whether, that requirement was met. 827 S.W.2d at 840-842. Unless the standards for granting mandamus relief are strictly adhered to, relief is granted more frequently, and thus perceived to be more available, and thus more often requested, and thus more often granted, and so on. Though the standards remain, their inconsistent application leads to an acceleration in granting relief. The merry-go-round has brakes; they just are not always applied.

This is a case in point. In the litigation out of which this original mandamus proceeding arises, the trial court held, based upon evidence and argument, that an accident investigation was not made in anticipation of litigation and therefore was not privileged from discovery. See TEX.R.CIV.P. 166b(3)(d). On application for mandamus by the party resisting discovery, a divided court of appeals, after hearing oral argument, came to the opposite conclusion. Maj. op. at 440. Now, on application for mandamus by the party requesting discovery, this Court directs the appeals court to withdraw its ruling. Unlike both lower courts, this Court does not consider it necessary to hear oral argument. The Court's opinion does not mention its decision in Walker, and it grants relief without explaining how the requirements for issuance of mandamus have been satisfied, the very practice criticized in Walker. As I read the Court's opinion, it rests solely on the conclusion that the trial court reached the right result and the court of appeals did not. Although the Court correctly recites that "[m]andamus should issue only to correct a clear abuse of discretion where there is no adequate remedy by...