Opinion ID: 1704812
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: Discovery requests are governed by Rule 26, Ala. R. Civ. P. However, [d]iscovery matters are within the trial court's sound discretion, and its ruling on those matters will not be reversed absent a showing of abuse of discretion and substantial harm to the appellant. Wolff v. Colonial Bank, 612 So.2d 1146, 1146 (Ala. 1992) (citations omitted); see also Ex parte Hicks, 727 So.2d 23, 33 (Maddox, J., dissenting). The trial court's discretion is not unlimited: [T]he standard this Court will apply in reviewing [the trial judge's] actions on a petition for a writ of mandamus is whether there has been a clear showing that the trial court abused its discretion. Thus, a writ of mandamus directing the trial judge to set aside his ruling on a discovery matter will issue only where it is clear that the trial judge has abused his discretion. Ex parte Clarke, 582 So.2d 1064, 1067 (Ala.1991). A petition for the writ of mandamus is the proper method for presenting the question whether a trial judge has abused his discretion in ordering discovery. Ex parte Allstate Ins. Co., 401 So.2d 749, 751 (Ala.1981). The writ of mandamus is a drastic and extraordinary writ that will be issued only when there is: (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Horton, 711 So.2d 979, 983 (Ala.1998) (citing Ex parte United Serv. Stations, Inc., 628 So.2d 501 (Ala.1993)); Ex parte Alfab, Inc., 586 So.2d 889 (Ala.1991) (citing Martin v. Loeb & Co., 349 So.2d 9 (Ala. 1977)). Thus, the writ of mandamus will not issue to direct the trial court to change its discovery order unless this Court determines, based on all the facts that were before the trial court, that the trial court clearly abused its discretion. Ex parte Horton, 711 So.2d at 983. An insurance company's lists of policyholders are confidential, proprietary information to which a litigant has no right except through court-ordered discovery. Ex parte Stephens, 676 So.2d 1307, 1316 (Ala.1996) (Houston, J., dissenting); Ex parte Mobile Fixture & Equip. Co., 630 So.2d 358 (Ala.1993); Ex parte McTier, 414 So.2d 460 (Ala.1982). The first step in determining whether the court has abused its discretion is to determine the particularized need for discovery, in light of the nature of the claim. Ex parte Rowland, 669 So.2d 125, 127 (Ala.1995). Because Boutwell alleged fraud, he is accorded a considerably wider latitude in the discovery process so that he will be able to meet the heavy burden of proof placed [on one alleging fraud]. Ex parte Clarke, 582 So.2d at 1068. `[E]vidence of prior similar acts is admissible to show fraud, scheme, motive, or intent.' 582 So.2d at 1068 (quoting Pugh v. Southern Life & Health Ins. Co., 544 So.2d 143, 145 (Ala.1988)). Thus, [w]hen the discovery request of a plaintiff alleging fraud is closely tailored to the nature of the fraud alleged, the discovery should be allowed in full, as long as the party opposing discovery does not show that the requested discovery is oppressive or overly burdensome. Ex parte Horton, 711 So.2d at 983.
The trial court did not abuse its discretion in ordering National Security to produce a list of policyholders and addresses of `preferred policies' i.e., those that do not pay benefits upon death within 2 years of issue; and of those policies issued pursuant to a lapsed policy issued by National Security: within the State of Alabama during the past five years. We addressed a similar issue in Ex parte First National Bank of Pulaski, 730 So.2d 1160 (Ala.1999). In that case, involving claims of fraud in regard to the sale of credit-life insurance, we held that the trial court did not clearly abuse its discretion in requiring the defendant Bank to produce the names and addresses of all Alabama residents who had borrowed money from the Bank through a specific loan officer in 1994 and 1995. In Ex parte Union Security Life Insurance Co., 723 So.2d 34 (Ala.1998), the plaintiff sued Union Security when it denied a claim on a credit-life insurance policy purchased in connection with the purchase of a truck; the plaintiff alleged fraud, breach of contract, negligence, wantonness, and bad-faith refusal to pay insurance benefits. We held that the trial court did not clearly abuse its discretion in ordering the defendant insurance company to produce all applications for credit-life insurance received from Alabama residents during a five-year period. Moreover, because the complaint asked for punitive damages, we held that the plaintiff had shown a need for the discovery she requested, and we stated that the trial court's order reflected the need: `[W]e believe that the United States Supreme Court's opinion in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), increased the necessity for a plaintiff alleging fraud and seeking punitive damages to seek pretrial discovery of similar alleged acts of misconduct by the defendant. The United States Supreme Court stated: Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct. 517 U.S. at 575, 116 S.Ct. at 1599[, 134 L.Ed.2d at 826].' Ex parte Union Security, 723 So.2d at 39 (quoting Ex parte Horton, 711 So.2d at 983-84). Boutwell alleges fraud and requests punitive damages. Thus, he is allowed broader discovery than would be allowed generally in other cases. However, his discovery is not unlimited. Our decisions in Ex parte First National Bank of Pulaski and Ex parte Union Security suggest that the time and geographical limitations imposed by the trial court are important in closely tailoring the discovery to Boutwell's claims. Although the trial court's order could have been clearer, we conclude that the court intended for the phrase within the State of Alabama during the past five years to be a limitation applying to both the request for a list of holders of preferred policies and the request for a list of holders of policies issued pursuant to a lapsed policy. Interpreted thus, the discovery order is closely tailored to Boutwell's fraud allegations and is not oppressive or overly burdensome for National Security. Accordingly, we do not find that the trial court clearly abused its discretion.
The trial court's second order directed National Security to provide [p]laintiff a list of all lawsuits filed in the State of Alabama within five years for fraud, deceit, misrepresentation, suppression and/or violations of insurance regulations or statutes naming the county where filed. The discovery of past fraud actions, subject to the five-year limitation, may lead to the discovery of admissible evidence tending to suggest a pattern or practice of intentional wrongful conduct on the part of National Security's agents. As we have stated, some earlier fraud actions need not relate to the specific focus of the fraud [the plaintiff] alleges ... for the discovery regarding earlier actions to be relevant to [the plaintiff's] action. Ex parte Rowland, 669 So.2d at 127. Compare Ex parte Finkbohner, 682 So.2d 409, 413 (Ala.1996) (implying that a plaintiff's request for a list of fraud claims that have not resulted in the filing of actions would be unduly burdensome on the defendant); and Ex parte Union Security, 723 So.2d at 38-39 (consumer complaints filed with the company, even if the complaints do not result in legal actions, can lead to evidence of representations similar to those made to the [plaintiffs] and are thus discoverable). The trial court's order requiring National Security to produce a list of lawsuits is more restrictive than the order to produce consumer complaints and lawsuits upheld in Ex parte Union Security; it was not an abuse of discretion.