Court Opinion

ID: 8208975
Source: CourtListenerOpinion
Date Created: 2022-09-26 00:13:50.108784+00
Date Added: 2024-06-11T16:41:36.996884
License: Public Domain

NO. 12-22-00237-CV
                             IN THE COURT OF APPEALS
                TWELFTH COURT OF APPEALS DISTRICT
                                          TYLER, TEXAS

IN RE: CENTRAL MUTUAL                                    §

INSURANCE COMPANY,                                       §       ORIGINAL PROCEEDING

RELATOR                                                  §

                                       MEMORANDUM OPINION
        In this original proceeding, Central Mutual Insurance Company seeks mandamus relief
from Respondent’s August 2, 2022 order directing Central to produce its corporate representative
for deposition. 1 We deny the writ.

                                                BACKGROUND
        The underlying suit arises out of a car accident that occurred in February 2021. Real
Party in Interest James Hanna was injured when his vehicle was struck by a vehicle driven by
Arturo Aguirre. Hanna settled with Aguirre and his insurance provider for his policy limits. In
September 2021, Hanna filed suit against Central, his insurance provider, for underinsured
motorist (UIM) benefits. He seeks a declaratory judgment that Aguirre’s negligence caused his
damages, Aguirre is an underinsured motorist as defined by the insurance policy, and he is
entitled to recover UIM benefits from Central.
        In April 2022, Hanna notified Central of his intent to depose its corporate representative
on twenty-two enumerated topics. Central filed a motion to quash and a motion for a protective
order. Central also filed the following stipulations and requested they not be read to the jury:

        1. Plaintiff is insured under an automobile liability insurance policy, Policy No. 3659902, issued
        by Central that contains uninsured and underinsured motorist coverage with a maximum per

        1
         Respondent is the Honorable Austin Reeve Jackson, Judge of the 114th Judicial District Court in Smith
County, Texas.
       occurrence uninsured and underinsured policy limit of $100,000.00, (hereafter, “Central’s
       policy”).

       2. Central’s policy, including the uninsured and underinsured motorist coverage of Central’s
       policy was in effect on February 12, 2021, the date of the auto accident between Plaintiff and
       third-party driver Arturo Aguirre (hereafter, the “occurrence”) made the subject of this suit.

       3. The occurrence made the subject of this suit was a covered occurrence or accident under
       Central’s policy and Plaintiff is a covered person under Central’s policy.

       4. The negligence of third-party driver Arturo Aguirre was the sole proximate cause of the
       occurrence made the subject of this suit.

       5. Central granted permission to Plaintiff to settle with Arturo Aguirre’s auto liability insurer,
       Alinsco Insurance Company, for its policy limits of $30,000.00, which limits have been paid to
       Plaintiff.

       6. Arturo Aguirre is an underinsured motorist and was operating an underinsured vehicle at the
       time of the occurrence within the meaning of Central’s policy, as Plaintiff’s damages resulting
       from the occurrence exceed the limits of the auto liability policy covering Aguirre’s vehicle at the
       time of the occurrence.

       7. Plaintiff has satisfied all conditions precedent under the uninsured and underinsured motorist
       coverage provisions of Central’s policy, except proving the total extent and amount of his
       damages proximately caused by the occurrence.

       8. Central’s policy contained a limit for personal injury protection benefits per occurrence of
       $2,500.00, and Central has paid these benefits to or on behalf of Plaintiff as a result of the
       occurrence.

       9. The sole issues for trial by the jury are the amount of damages proximately caused by the
       occurrence for each element of damages contained within the Court’s charge that the Court
       submits to the jury in this case.

       10. No Central employee will offer testimony at trial concerning the nature, extent, or causation
       of Plaintiff’s injuries and/or the damages resulting therefrom that Plaintiff sustained because of
       the occurrence or any other matter.

       Respondent held a hearing in May and took the motion under advisement. In July,
Central amended its answer to include the affirmative defense of failure to mitigate damages.
Hanna then filed a supplemental brief opposing the motion to quash based on the addition of the
affirmative defense. At a pretrial hearing, the parties and Respondent again discussed the
deposition of a corporate representative. Respondent signed an order granting the motion to
quash in part. Respondent stated that since Central was now asserting an affirmative defense,
Hanna “is entitled to seek discovery on that issue including through the deposition of a corporate
representative.” Respondent further held:

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        Therefore, the trial court DENIES the motion as to the limited issue of Defendant’s “defensive
        theories to [his] claim regarding damages,” the basis on which those claims rest, and the extent to
        which they affect plaintiff’s claimed damages.

This original proceeding followed. 2

                                      PREREQUISITES TO MANDAMUS
        Ordinarily, to be entitled to a writ of mandamus, relators must show that the trial court
clearly abused its discretion, and that they lack an adequate remedy by appeal. In re Dawson,
550 S.W.3d 625, 628 (Tex. 2018) (original proceeding) (per curiam). A trial court clearly abuses
its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and
prejudicial error of law or if it clearly fails to analyze the law correctly or apply the law correctly
to the facts. In re H.E.B. Grocery Co., L.P., 492 S.W.3d 300, 302-03 (Tex. 2016) (orig.
proceeding) (per curiam); In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005)
(orig. proceeding) (per curiam).
        The adequacy of an appellate remedy must be determined by balancing the benefits of
mandamus review against the detriments. In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex.
2008) (orig. proceeding). Because this balance depends heavily on circumstances, it must be
guided by analysis of principles rather than simple rules that treat cases as categories. In re
McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex. 2008) (orig. proceeding). In evaluating
benefits and detriments, we consider whether mandamus will preserve important substantive and
procedural rights from impairment or loss. In re Prudential Ins. Co. of Am., 148 S.W.3d 124,
136 (Tex. 2004) (orig. proceeding). We also consider whether mandamus will “allow the
appellate courts to give needed and helpful direction to the law that would otherwise prove
elusive in appeals from final judgments.” Id. Finally, we consider whether mandamus will spare
the litigants and the public “the time and money utterly wasted enduring eventual reversal of
improperly conducted proceedings.” Id. Appeal is not an adequate remedy when the appellate
court would not be able to cure the trial court’s discovery error on appeal. In re Dana Corp.,

        2
          Central originally accompanied the filing of its petition and appendix with a motion to seal the records.
See TEX. R. CIV. P. 76a. Central also redacted allegedly sensitive information from its petition and appendix.
However, the information redacted did not meet the definition of sensitive information under the Rules of Civil
Procedure. See TEX. R. CIV. P. 21c. This Court overruled the motion to seal and notified Central it needed to file an
unredacted petition and appendix in compliance with Rule 21c or face potential dismissal. Central failed to do so.
However, in the interest of judicial economy, we will address the merits of Central’s petition.
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138 S.W.3d 298, 301 (Tex. 2004) (orig. proceeding) (per curiam); In re Ford Motor Co., 988
S.W.2d 714, 721 (Tex. 1998) (orig. proceeding).

                                      ABUSE OF DISCRETION
       Central asserts that Respondent abused its discretion because the relevant issues are not
within Central’s personal knowledge and constitute privileged information, requiring Central to
produce a corporate representative would be unduly burdensome, and the requested discovery is
available via more convenient and less expensive means.
Applicable Law
       A trial court generally has discretion to determine the scope of discovery. In re Nat’l
Lloyds Ins. Co., 532 S.W.3d 794, 802 (Tex. 2017) (orig. proceeding). “Our procedural rules
define the general scope of discovery as any unprivileged information that is relevant to the
subject of the action, even if it would be inadmissible at trial, as long as the information sought is
reasonably calculated to lead to the discovery of admissible evidence.” In re Nat’l Lloyds Ins.
Co., 507 S.W.3d 219, 223 (Tex. 2016) (orig. proceeding) (per curiam) (internal quotation marks
and citations omitted). Information is relevant if it tends to make the existence of a fact that is of
consequence to the determination of the action more or less probable than it would be without
the information. TEX. R. EVID. 401. The phrase “relevant to the subject matter” is to be broadly
construed. In re Nat’l Lloyds Ins. Co., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding) (per
curiam). Discovery requests must be reasonably tailored to include only matters relevant to the
case. In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex. 1998) (orig. proceeding) (per
curiam). A trial court abuses its discretion if it orders discovery that exceeds what the rules of
civil procedure permit. In re N. Cypress Med. Ctr. Operating Co., Ltd., 559 S.W.3d 128, 130-
31 (Tex. 2018) (orig. proceeding).
       UIM coverage provides payment to the insured of all amounts that the insured is legally
entitled to recover as damages from owners or operators of underinsured vehicles because of
bodily injury or property damage, not to exceed the limit specified in the insurance policy.
Farmers Tex. Cty. Mut. Ins. Co. v. Okelberry, 525 S.W.3d 786, 790 (Tex. App.—Houston [14th
Dist.] 2017, pet. denied) (citing TEX. INS. CODE ANN. § 1952.106 (West 2009)). A negligent
party is underinsured when the available proceeds of his liability insurance are insufficient to

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compensate for the injured party’s actual damages. Id. (citing Stracener v. United Servs. Auto.
Ass’n, 777 S.W.2d 378, 380 (Tex. 1989)).
       The scope of relevant discovery in UIM cases differs from other insurance disputes
because, unlike most first-party cases in which the terms of the policy alone dictate the outcome,
UIM coverage hinges on the liability of the alleged uninsured, at-fault third-party motorist under
applicable tort law. In re Liberty Cty. Mut. Ins. Co., 537 S.W.3d 214, 220 (Tex. App.—
Houston [1st Dist.] 2017, orig. proceeding). A UIM insurer has no contractual duty to pay
benefits until the liability of the other driver and the amount of damages sustained by the insured
are determined. Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006).
       To recover benefits under a UIM policy, a policy beneficiary must show (1) that the
insured has UIM coverage; (2) that the other driver negligently caused the accident that resulted
in the covered damages; (3) the amount of the insured’s damages; and (4) that the other driver’s
insurance coverage is deficient.     Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 220; In re
Progressive Cty. Mut. Ins. Co., 439 S.W.3d 422, 427 (Tex. App.—Houston [1st Dist.] 2014,
orig. proceeding).
       A stipulation by the insurer that (1) the plaintiff was insured for UIM benefits under its
policy; and (2) the underlying accident was a covered occurrence under the policy’s provisions
narrows the relevant issues in the breach-of-contract suit to those in a “typical car wreck” case—
namely, (a) the uninsured/underinsured driver’s liability for the underlying accident; (b) the
claimed uninsured/underinsured driver’s status; and (c) the existence and amount of the
plaintiff’s damages. Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 220; Progressive Cty. Mut. Ins.
Co., 439 S.W.3d at 427.

Analysis
       Central contends that while Hanna is entitled to discovery on Central’s damages theories,
a corporate representative deposition is not the correct avenue. Specifically, Central urges that
any knowledge it has regarding Hanna’s damages is privileged and that Hanna can obtain the
information from other, more convenient, less burdensome sources.
       Central argues this case is different from previous cases involving corporate
representative depositions because it has shown the information can be obtained from less
burdensome sources. However, that is not our sole consideration. Several cases have held that,

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as long as the scope is limited to the issues in dispute, a deposition of a corporate representative
is relevant and permissible discovery. See In re Hamilton, No. 13-20-00254-CV, 2020 WL
5494503, at *6 (Tex. App.—Corpus Christi Sept. 10, 2020, orig. proceeding) (mem. op.); In re
Liberty Cty. Mutual Ins. Co., No. 14-19-00932-CV, 2020 WL 3716093, at *5 (Tex. App.—
Houston [14th Dist.] July 7, 2020, orig. proceeding) (op.); In re Perry, No. 13-18-00676-CV,
2019 WL 1723509, at *8 (Tex. App.—Corpus Christi April 18, 2019, orig. proceeding) (mem.
op.); In re Luna, No. 13-16-00467-CV, 2016 WL 6576879, at *7-8 (Tex. App.—Corpus Christi
Nov. 7, 2016, orig. proceeding) (mem. op.); In re Garcia, No. 04-07-00173-CV, 2007 WL
1481897, at *2 (Tex. App.—San Antonio May 23, 2007, orig. proceeding) (mem. op.). This is
especially true in cases such as this one in which the claimant has settled with the alleged
underinsured motorist and is proceeding directly against the insurer in a case that does not
involve extracontractual matters. See Hamilton, 2020 WL 5494503, at *6.
       But Central maintains that this case is more akin to the Fourteenth Court of Appeals’
opinion in In re Liberty County Mutual Insurance Company (Liberty 2018). See 557 S.W.3d
851 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding). In Liberty 2018, the plaintiff
claimed he was injured in a five-vehicle collision. Id. at 853-54. As a result of the collision, he
sued his insurer to recover UIM benefits and alleged extracontractual claims. Id. at 854. The
trial court severed the extracontractual claims into a separate action. Id. at 854. The plaintiff
noticed the deposition of Liberty’s corporate representative, and Liberty filed a motion to quash
the deposition and a motion for protection. Id. The plaintiff filed a motion to compel, and the
trial court held a hearing.     Id.   The trial court ordered Liberty to present a designated
representative or employee with knowledge of relevant facts to testify on the following: (1) the
plaintiff’s damages caused by the accident; (2) the facts supporting the legal theories and
defenses listed in Liberty’s responses to the plaintiff’s request for disclosure, including (a)
Liberty’s limitation of liability, (b) the amount of any offset or credit to which Liberty claimed it
was entitled, (c) the plaintiff’s pre-existing, subsequent, and/or intervening injuries and
conditions, (d) the amounts of any limitation or reduction Liberty would allege, (e) the plaintiff’s
failure to mitigate his damages by failing to follow his doctor’s instructions or seeking
appropriate treatment for his injuries, and (f) how the crash occurred; (3) Liberty’s sworn
interrogatory answers; (4) Liberty’s responses to requests for production; (5) Liberty’s responses
to the request for disclosure; and (6) Liberty’s live pleadings on file. Id. at 854–55.

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       The Court of Appeals observed that the order was not limited to “the relevant topics of
the truck driver’s liability and the existence and amount of Plaintiff’s damages.” Id. at 856.
Instead, it improperly included topics related to Liberty’s interrogatory answers, responses to
requests for production, responses to the request for disclosure, and live pleadings, without
limitation and regardless of whether they pertained to “the truck driver’s liability or Plaintiff’s
damages, and therefore encompasse[d] irrelevant matters.” Id.
       Furthermore, the Court noted, as to the relevant topics of the truck driver’s liability and
the plaintiff’s damages, the plaintiff had already obtained the information. Id. In response to the
plaintiff’s requests for production relating to the car accident and the investigation of the
accident, Liberty produced (1) a valuation report for the plaintiff’s vehicle prepared by an
independent, third-party appraiser and accompanying photos; (2) the police report; (3) the
plaintiff’s medical records; and (4) the plaintiff’s recorded statement. Id. at 857. Moreover,
nothing in the record indicated that Liberty had any knowledge of how the accident occurred or
the plaintiff’s damages beyond what the plaintiff already knew or had obtained through
discovery. Id. Also, the police report identified at least four other drivers and/or passengers,
who were involved in the accident and whom the plaintiff could seek to depose. Id. Thus, the
Court held that the trial court abused its discretion by compelling the deposition of Liberty’s
corporate representative on topics pertaining “to the relevant subjects of the truck driver’s
liability or Plaintiff’s damages” because the information was already known to the plaintiff, had
already been obtained by the plaintiff through discovery, or was obtainable from a source that
was more convenient, less burdensome, or less expensive. Id.
       Central’s reliance on Liberty 2018 is misplaced. A key distinction between this case and
Liberty 2018 is that there is no evidence Liberty asserted an affirmative defense regarding
mitigation of damages. Furthermore, the deposition in this case is limited to those issues actually
in dispute, namely Central’s affirmative defense regarding damages.
       Central further contends that its corporate representative does not have personal
knowledge of the facts and should not be required to appear for a deposition. It contends that
any knowledge Central has is subject to work product or attorney-client privileges. Rule 192.3
provides that “[a] person has knowledge of relevant facts when that person has or may have
knowledge of any discoverable matter. The person need not have admissible information or
personal knowledge of the facts.” TEX. R. CIV. P. 192.3(c). Rule 199.1(a) permits the deposition

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of any person or entity without any limitation that the proposed deponent have personal
knowledge of the facts. In re Jinsun LLC, No. 14-15-00568-CV, 2015 WL 5092176, at *4
(Tex. App.—Houston [14th Dist.] Aug. 27, 2015, orig. proceeding) (mem. op). Hanna was not
required to show that a Central corporate representative has personal knowledge of any facts
relevant to the disputed issues on damages.
         Moreover, as addressed above, to recover UIM benefits, Hanna has the burden to prove
(1) that he has UIM coverage; (2) that the other driver negligently caused the accident that
resulted in the covered damages; (3) the amount of his damages; and (4) that the other driver’s
insurance coverage is deficient. See Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 220; Progressive
Cty. Mut. Ins. Co., 439 S.W.3d at 427. Central represented to Respondent that it had stipulated
that the policy provides UIM coverage to Hanna and that the other driver’s negligence caused
Hanna’s damages. However, Central did not agree to the amount of damages. That the amount
of damages is in dispute is further supported by Central’s amended answer alleging that Hanna
failed to mitigate his damages.
         Central is a party to this case and Hanna is entitled to discovery related to his claims and
Central’s defensive theories to his claim regarding damages.          See In re Luna, 2016 WL
6576879, at *8. The scope of the deposition is limited to the damages issue. Under the
circumstances of this case, we conclude that Respondent did not abuse his discretion by ordering
Central to produce its corporate representative for deposition.

                                                  DISPOSITION
         Having determined that no abuse of discretion occurred under the facts of this case, we
deny Central’s petition for writ of mandamus.
                                                                GREG NEELEY
                                                                  Justice

Opinion delivered September 22, 2022.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

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                                  COURT OF APPEALS
     TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
                                          JUDGMENT

                                        SEPTEMBER 22, 2022

                                        NO. 12-22-00237-CV

                     CENTRAL MUTUAL INSURANCE COMPANY,
                                   Relator
                                     V.

                              HON. AUSTIN REEVE JACKSON,
                                       Respondent

                                       ORIGINAL PROCEEDING

              ON THIS DAY came to be heard the petition for writ of mandamus filed by
Central Mutual Insurance Company, who is the relator in this cause and the defendant in trial
court Cause No. 21-2217-B, pending on the docket of the 114th Judicial District Court of Smith
County, Texas. Said petition for writ of mandamus having been filed herein on August 31, 2022,
and the same having been duly considered, because it is the opinion of this Court that a writ of
mandamus should not issue, it is therefore CONSIDERED, ADJUDGED and ORDERED that
the said petition for writ of mandamus be, and the same is, hereby denied.
                   Greg Neeley, Justice.
                   Panel consisted of Worthen, C.J., Hoyle, J. and Neeley, J.

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