Opinion ID: 2834607
Heading Depth: 2
Heading Rank: 4

Heading: Did Ford Seek Discoverable Information?

Text: Castillo asserts that the trial court did not abuse its discretion in denying Ford’s discovery request because the evidence Ford sought to develop was immaterial as it did not bear on any proper defense to the breach of contract action. [2] Ford offers mutual mistake as one such potential defense. The parties disagree as to whether mutual mistake is applicable in this case, but a party is not required to demonstrate the viability of defenses before it is entitled to conduct discovery. Rather, a party may obtain discovery “regarding any matter that is not privileged and is relevant to the subject matter of the pending action.” Tex. R. Civ. P. 192.3. The phrase “relevant to the subject matter” is to be “liberally construed to allow the litigants to obtain the fullest knowledge of the facts and issues prior to trial.” Axelson , Inc. v. McIlhany , 798 S.W.2d 550, 553 (Tex. 1990). The trial court’s preemptive denial of discovery could have been proper only if there existed no possible relevant, discoverable testimony, facts, or material to support or lead to evidence that would support a defense to Castillo’s claim for breach of contract. This record does not demonstrate such a situation. Castillo further asserts that Ford’s suspicion that discovery might uncover relevant evidence is insufficient to render the trial court’s denial of discovery an abuse of discretion. We agree that in some cases the denial of more time to conduct discovery is not an abuse of discretion when the discovery “might have” raised a fact question. Tenneco , 925 S.W.2d at 647; Nat’l Union Fire Ins. Co. v. CBI Indus., Inc. , 907 S.W.2d 517, 520 (Tex. 1995). But in such cases, the parties had not been completely precluded by the trial court from conducting discovery to begin with. See Tenneco , 925 S.W.2d at 647 . Rather, the facts in those cases were “sufficiently developed” and “all the relevant information [was] at hand.” Id. In this case, facts and matters relevant to the question of outside influence were not developed and the question of whether follow-up discovery on the issue should be undertaken was foreclosed. Castillo also cites Texas Co. v. State , 281 S.W.2d 83, 91 (Tex. 1955), as support for the argument that discovery under these circumstances was immaterial, asserting that Ford was not entitled to rescind the contract as rescission is only allowed when the party seeking cancellation can restore the original status. Id. (“[O] ne seeking a cancellation of an instrument, with certain exceptions not pertinent here, must restore the original status . . . .”). Castillo argues that restoring the original status in this case—the original jury deliberating toward a verdict—is impossible. But the cases requiring a party to restore the original status refer to returning money or property received pursuant to the contract. See, e.g. , id. at 91 (“[I]t was not beyond the power of the trial court to require Duval to do equity by returning the money it had received . . . .”); Tex. Employers Ins. Ass’n v. Kennedy , 143 S.W.2d 583, 585 (Tex. 1940) (“The general equitable rule is that a plaintiff in a suit for the rescission or cancellation of a contract to which he is a party must return, or offer to return, any consideration which he has received under the contract.”); Gibson v. Lancaster , 39 S.W. 1078, 1079 (Tex. 1897) (“[I]f any part of the purchase price has been paid, in order to [obtain] a rescission the money so paid must be tendered by the seller to the purchaser.”). The rule is one of justice, designed to ensure that parties do not repudiate an agreement while retaining benefits received by reason of the agreement. See Tex. Co. , 281 S.W.2d at 91 . We decline to extend the rule to a case such as this. First, Ford has not unfairly benefitted by receipt of tangible benefits that in equity should be returned in order for it to assert an equitable remedy. Any benefits Ford received could just as well be said to have been received by Castillo. Neither party knows whether the jury would have eventually found for Ford or Castillo and, if for Castillo, what amount of damages would have been awarded. Both parties were at risk by allowing the jury to continue deliberating—that is why they settled. Further, the rule is an equitable one. Kennedy , 143 S.W.2d at 585 . Equitable rules by necessity are flexible and adaptable. See Johnson v. Cherry , 726 S.W.2d 4, 8 (Tex. 1987). In this instance, facts have been disclosed that raise a legitimate question about the integrity of the trial process. It would be an anomalous application of the Court’s equitable powers for those powers to be exercised to preclude inquiry into possible outside influence on jurors deliberating a verdict. We refuse to so apply an equitable doctrine.