Court Opinion

ID: 2896726
Source: CourtListenerOpinion
Date Created: 2015-09-08 00:47:40.84255+00
Date Added: 2024-06-11T13:31:09.788748
License: Public Domain

NO. 07-08-0318-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL A

                                 SEPTEMBER 11, 2008

                         ______________________________

   IN RE: TOMMY MANION AND TOMMY MANION OF TEXAS, INC., RELATORS

                       _________________________________

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                      ON PETITION FOR WRIT OF MANDAMUS

      Relators, Tommy Manion and Tommy Manion of Texas, Inc., (collectively referred

to as Manion) have filed a petition for writ of mandamus alleging an abuse of discretion by

the trial court in the signing of a discovery order granting the motion of real parties-in-

interest, Bill Freeman, Bill Freeman, Inc., and Jill Freeman (collectively referred to as

Freeman) to compel Manion to produce certain financial documents. On Manion’s motion,

we temporarily stayed the trial court’s order requiring production. Subsequently, Freeman

filed an Emergency Motion for Stay of Underlying Proceedings. Having considered the

record, we deny mandamus relief, vacate our stay order, and declare Freeman’s

Emergency Motion for Stay of Underlying Proceedings moot.
                                      Background

      The underlying suit involves multiple claims and counterclaims stemming from the

alleged breach of a syndication agreement related to the care and breeding of an American

Quarter Horse stallion. Manion and Freeman have sued each other alleging breach of

contract and a variety of torts including breach of fiduciary duty. Manion also seeks a

declaration that the syndicate is not a partnership or other joint business arrangement.

       On May 20, 2008, Freeman served a request for production of documents seeking

Manion’s personal financial information from January 1, 2000 to date. The request sought

documents related to Manion’s sale and purchase of breeding contracts, transfers of funds

between bank accounts, and payment of bills and expenses for certain horses. The types

of documents sought were contracts, agreements, checks, deposit slips, financial

materials, bank statements, bills, requests for payments of costs and expenses, payment

checks, drafts, deposit slips, and loan documents. On June 10, Freeman served a

subpoena duces tecum and notice of deposition requesting Manion’s financial records from

Security Bank of Whitesboro. The subpoena duces tecum sought account records, bank

statements, signature cards, canceled checks, loan files, and financial statements.

      On June 27, Manion moved to quash the subpoena and sought a protective order.

Freeman subsequently filed a motion to compel production. In support of his motion to

compel, Freeman asserted the documents were relevant to a claim that Manion breached

his fiduciary duties as Stallion Manager and Co-Manager by purchasing syndicate-owned

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breeding contracts at below market prices and then marking up the contracts for resale,

selling his personal breeding contracts when he was obligated to sell syndicate-owned

contracts, breeding stallions without contracts, and improperly appropriating Freeman’s

customers.1 Manion responded that the documents were irrelevant and Freeman’s request

was overly broad as to scope and time, unduly burdensome, and would require the

production of private and confidential information. On July 17, the trial court held a hearing

on Freeman’s motion to compel production and granted Freeman’s motion ordering the

production of Manion’s financial records.

       On July 31, Manion requested that we issue a writ of mandamus ordering the trial

court to vacate its order compelling production. On August 1, this Court granted Manion’s

motion for an emergency stay of the trial court’s discovery order. On September 5,

Freeman filed an emergency motion to stay the underlying action in the trial court.

                                        Discussion

       Mandamus relief is appropriate only if the trial court abused its discretion or violated

a legal duty, and there is no adequate remedy at law. In re Dana Corp., 138 S.W.3d 298,

       1
         On August 13, 2008, Freeman filed his Fourth Amended Consolidated Counterclaim
asserting actions for Breach of Fiduciary Duty against Manion for, among other things,
selling his breeding rights at higher prices than those breeding rights allocated for the
syndicate’s use and using his position as Stallion Manager to solicit Freeman’s customers
and sell breeding rights to such customers thereby depriving Freeman of the opportunity to
sell his breeding rights to the customers. Freeman also amended his petition to allege
exemplary damages.

                                              3
301 (Tex. 2004) (orig. proceeding); In re Covenant Health System, 223 S.W.3d 423, 425

(Tex.App.–Amarillo 2006, orig. proceeding). A court abuses its discretion when it acts

unreasonably, arbitrarily, or without reference to guiding rules and principles. In re Brown,

190 S.W.3d 4, 6 (Tex.App.–Amarillo 2005, orig. proceeding). While factual matters are

committed to the trial court’s discretion, In re Shipman, 68 S.W.3d 815, 818-19

(Tex.App.–Amarillo 2001, orig. proceeding), our review of the trial court’s determination of

controlling legal principles is entitled to much less deference. Walker v. Packer, 827
S.W.2d 833, 840 (Tex. 1992). In our analysis, we “must focus on the record that was

before the court and whether the decision was not only arbitrary but also amounted ‘to a

clear and prejudicial error of law.’” Shipman, 68 S.W.3d at 819 (quoting In re Bristol-Myers

Squibb Co., 975 S.W.2d 601, 605 (Tex. 1998)).

       The scope of discovery is largely within the trial court’s discretion, In re Colonial

Pipeline Co., 968 S.W.2d 938, 941 (Tex. 1998) (orig. proceeding), however, mandamus

is appropriate if we conclude that privileged documents have been improperly ordered

disclosed by the trial court. In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434, 436

(Tex. 2007). That said, the relator must establish that the facts and law permit the trial

court to make but one decision. In re Trinity Universal Ins. Co., 64 S.W.3d 463, 466

(Tex.App.–Amarillo 2001, orig. proceeding) (citing Johnson v. Fourth Court of Appeals, 700
S.W.2d 916, 917 (Tex. 1985)). “This determination is essential because mandamus will

not issue to control the action of a lower court in a matter involving discretion.” Johnson,
700 S.W.2d at 917.

                                             4
        Manion offers no evidence as to why the production of his financial documents are

privileged or exempted from discovery. Instead, he points to the pleadings to support his

claims that production of his financial records violate his right to privacy and are

confidential, unrelated in time to the underlying litigation, and irrelevant to the claims in the

suit.

        The general rule in financial records production cases is that the party attempting

to prevent or restrict discovery has the burden of pleading and proving the basis for the

desired limitation. In re Patel, 218 S.W.3d 911, 915 (Tex.App.–Corpus Christi 2007, orig.

proceeding) (citing Peeples v. Honorable Fourth Supreme Judicial Dist., 701 S.W.2d 635,

637 (Tex. 1985) (orig. proceeding)); Kern v. Gleason, 840 S.W.2d 730, 735-37

(Tex.App.–Amarillo 1992, orig. proceeding). Absent a privilege or specific exception, a

party is entitled to discover any relevant material. Id. at 736. There are no presumptions

of privilege. El Centro Del Barrio, Inc. v. Barlow, 894 S.W.2d 775, 778-79 (Tex.App.–San

Antonio 1994, no writ). Manion cites no authority in support of an asserted constitutional

right to privacy, and it has previously been determined there is no constitutionally protected

privacy right in one’s personal financial records. Martin v. Darnell, 960 S.W.2d 838, 844-45

(Tex.App.–Amarillo 1997, no writ); Miller v. O’Neill, 775 S.W.2d 56, 59 (Tex.App.–Houston

[1st Dist.] 1989, no writ) (“[T]he supreme court has allowed such discovery, despite the

inevitable intrusion.”). Moreover, counsel’s conclusory assertions alone fail to establish

that Manion’s financial documents may not be produced because they are confidential or

privileged.   Kern, 840 S.W.2d at 734 (statements of counsel are not evidence).

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Accordingly, the record contains no evidence on which to exclude the documents from

discovery because they are confidential or privileged.

       Manion also bears the burden of proving that Freeman’s requests were overbroad,

i.e. unrelated in time to the litigation. Miller, 775 S.W.2d at 59. Freeman’s amended

petition alleges, among other things, that Manion breached fiduciary duties by using his

position as Stallion Manager to undercut sales of the syndicate’s breeding contracts and

Freeman’s commercial relationship with his customers in order to increase Manion’s profit

from his breeding operations. Freeman also alleges Manion served as Stallion Manager

from 1983 until the present. Therefore, the record does not support a conclusion that the

trial court abused its discretion by ordering the discovery of Manion’s financial documents

from 2000 to the present.

       Manion’s financial documents are also relevant to Freeman’s underlying action.

Freeman’s third amended petition alleges Manion misused his position as a Stallion

Manager for financial gain in violation of his fiduciary duties. Consequently, Manion’s

financial information for the period he served as Stallion Manager is relevant and

discoverable. See generally El Centro, 894 S.W.2d at 781-82. Once again, the record

fails to establish any basis on which to exclude these documents from discovery.2

       2
         Although Manion also contends that responding to Freeman’s discovery requests
will involve the expenditure of “significant financial and physical resources,” he offers no
evidence in support of this contention. On the other hand, Freeman offered evidence
indicating the Bank could timely produce Manion’s responsive bank records at a cost of
$650.00 and Freeman was willing to pay the costs.

                                             6
                                  CONCLUSION

      Having determined that the trial court did not abuse its discretion in ordering

discovery, we deny mandamus relief, vacate our stay order, and declare Freeman’s

Emergency Motion for Stay of Underlying Proceedings filed September 5, 2008, moot.

                                             Patrick A. Pirtle
                                                 Justice

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