Court Opinion

ID: 2990059
Source: CourtListenerOpinion
Date Created: 2015-09-23 02:54:35.019319+00
Date Added: 2024-06-11T08:11:30.866794
License: Public Domain

Petition for Writ of Mandamus Conditionally Granted in Part and Memorandum
Opinion filed April 12, 2012.

                                           In The

                      Fourteenth Court of Appeals
                                      ____________

                                  NO. 14-12-00239-CV
                                    ____________

   IN RE JOHN GILBERT BADGEROW and CECELIA LYNN BADGEROW,
                                           Relators

                              ORIGINAL PROCEEDING
                                WRIT OF MANDAMUS
                                   133rd District Court
                                  Harris County, Texas
                            Trial Court Cause No. 2010-40502

                      MEMORANDUM                      OPINION

       In this original proceeding, relators, John Gilbert Badgerow and Cecelia Lynn
Badgerow, complain that the respondent, the Honorable Jaclanel M. McFarland, presiding
judge of the 133rd District Court of Harris County, Texas, improperly granted a motion to
quash a deposition on written questions and subpoena duces tecum served on a non-party.
We conditionally grant the writ in part.

       Relators sued Atco-Valley Plaza, LLC (Atco), the real party in interest in this
proceeding, and others, alleging, among other claims, that the defendants defrauded them
into making a $600,000 loan to Atco by misrepresenting the value of the land used to
secure the loan, a four-acre tract that is part of a larger tract of land owned by Atco.
Relators assert that Atco failed to disclose (1) that the land is subject to a multi-million
dollar environmental contamination suit, (2) whether utilities are available, and (3) that
Atco claims an easement across the middle of the property. Before making the loan, Atco
provided relators with an opinion letter on the value of the mortgaged property authored by
Eric Hughes, the owner of CenterMark Real Estate, LLC, who had listed the property for
sale. The opinion letter does not mention these three matters about which relators have
now sued. According to relators, Hughes had given a deposition in the environmental suit
before he wrote the opinion letter on the mortgaged property’s value. Atco defaulted on
the loan and relators foreclosed on the deed of trust in 2010. After the foreclosure, relators
learned of the alleged misrepresentations and claim that the land is unmarketable, resulting
in the underlying suit.

        Relators served a notice of deposition on written questions and subpoena duces
tecum on CenterMark Real Estate, LLC.1 Questions 1-11 are traditional business records
foundation questions. Questions 12-17 are as follows:

      12. Was Eric Hughes compensated by Atco for the opinion letter attached
      hereto as Exhibit 1 (the “Opinion Letter”)? If so, give the dollar amount of
      compensation, and state who paid the compensation.

      13. At the time the Opinion Letter was sent to Mr. Cooke, did Eric Hughes
      know that the letter would be presented to a potential lender of Atco or potential
      buyer of Atco’s real property?

      14. What did Eric Hughes understand to be the reason the Opinion Letter was
      requested by Atco?

      15. Describe the diligence used to obtain the value set forth in the Opinion
1
  The notice and subpoena were also served on Texas Capital Bank, but no claim for relief on its behalf has
been filed.
                                                    2
Letter.

16. On the date of the Opinion Letter, was Eric Hughes aware that Atco was
suing a prior owner for environmental contamination to the real property valued
n the opinion letter? If so, how did the lawsuit factor into the valuation given in
the Opinion Letter?

17. Describe by date, content, and participants, any conversation you had with
Jay Cooke regarding his purchase or construction of a residence in the
Carribean.

The document categories requested are listed as follows:

1. All documents sent by Eric Hughes to Atco-Valley Plaza, LLC, or its
representatives or affiliates, or vice versa, relating or referring to any of the
following subjects:

(A) John and Lynn Badgerow.

(B) The four-acre tract pledged by Atco-Valley Plaza, LLC, to the Badgerows.

(C) Environmental contamination on real property owned by Atco-Valley
Plaza, LLC.

(D) Efforts by Atco-Valley Plaza, LLC, to sell real property.

(E) Real property owned by Atco-Valley Plaza, LLC.

(F) Listing agreements.

2. All documents sent by you to any third party, or vice versa, relating or
referring to any of the following subjects:

(A) John and Lynn Badgerow.

(B) The four-acre tract pledged by Atco-Valley Plaza, LLC, to the Badgerows.

(C) Environmental contamination on real property owned by Atco-Valley
Plaza, LLC.

(D) The sale or potential sale of real property by Atco-Valley Plaza, LLC.

                                        3
      (E) Real property owned by Atco-Valley Plaza, LLC.

      3. All documents relating or referring to viewed or relied upon in the making of
      the opinion letter attached hereto as Exhibit 1, including but not limited to
      calculations.

      4. All documents concerning or referring to environmental contamination on
      real property owned by Atco-Valley Plaza, LLC.

      5. All documents concerning or referring to development or potential
      development of real property owned by Atco-Valley Plaza, LLC, including but
      not limited to diagrams, plans estimates, and proposals.

      6. All documents concerning or referring to utilities serving, or planned for, real
      property owned by Atco-Valley Plaza, LLC.

      7. All documents concerning or referring to easement rights appurtenant to real
      property owned by Atco-Valley Plaza, LLC.

      8. All surveys, appraisals, opinion letters, descriptions, offers to sell,
      communications, and listings concerning real property owned by Atco-Valley
      Plaza, LLC.

        Atco objected to the questions and request for documents on relevance and
overbreadth grounds.2 Relators filed a response and requested an oral hearing. The trial
court granted the motion to quash without an oral hearing on January 3, 2012. Relators
then filed this proceeding on March 7, 2012, and the real party, at the court’s request, filed
a response to relator’s petition.

        In addition to asserting that Atco’s motion to quash lacked merit, relators argue that
the trial court’s order conflicts with Texas Rule of Civil Procedure 193.4(a) in denying a
hearing on the motion.3 Relators ask that we find that the trial court’s January 3, 2012

2
   No objection was made to Questions 1-11, the predicate questions.
3
   Rule 193.4(a) provides:
(a) Hearing. Any party may at any reasonable time request a hearing on an objection or claim of privilege
asserted under this rule. The party making the objection or asserting the privilege must present any evidence
necessary to support the objection or privilege. The evidence may be testimony presented at the hearing or
affidavits served at least seven days before the hearing or at such other reasonable time as the court permits.
                                                      4
order quashing the deposition on written questions and subpoena duces tecum constitutes
an abuse of discretion and permit them to proceed with their discovery from CenterMark
Real Estate, LLC.

       Mandamus is an extraordinary remedy that will issue only if (1) the trial court
clearly abused its discretion and (2) the party requesting mandamus relief has no adequate
remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004).
A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to
amount to a clear and prejudicial error of law. In re Cerberus Capital Mgmt., L.P., 164
S.W.3d 379, 382 (Tex. 2005). There is no adequate remedy by appeal when an appellate
court cannot remedy a trial court’s discovery error. In re Dana Corp., 138 S.W.3d 298,
301 (Tex. 2004). The remedy by appeal may be inadequate where the trial court disallows
discovery and the missing discovery is not part of the record, thereby denying the
reviewing court the ability to evaluate the effect of the trial court’s error. Walker v.
Packer, 827 S.W.2d 833, 843-44 (Tex. 1992).

       Rule 193.4(a) provides that, “[t]he party making the objection or asserting the
privilege must present any evidence necessary to support the objection or privilege.” Tex.
R. App. P. 193.4 (emphasis supplied). As shown by the plain language of the rule,
evidence may not always be necessary to support an objection. In re Union Pacific
Resources Co., 22 S.W.3d 338, 339 (Tex. 1999) (per curiam) (holding trial court was
within its discretion to sustain objections to discovery based on relevance even though
relator did not adduce evidence in support of its objections). Evidence is not necessary to
support an objection if the discovery requests themselves demonstrate overbreadth as a
matter of law. In re Memorial Hermann Healthcare Sys., 274 S.W.3d 195, 202 (Tex.
App.—Houston [14th Dist.] 2008, orig. proceeding). The objections in this case, on
grounds of relevance and overbreadth, can be determined from the face of the pleadings
without evidence. We conclude that the trial court did not abuse its discretion in ruling on

                                               5
the motion to quash without conducting a hearing.

       The scope of discovery includes information that is relevant to the subject matter of
the case, even if it would not be admissible at trial, as long as the information sought is
“reasonably calculated to lead to the discovery of admissible evidence.” See Tex. R. Civ.
P. 192.3(a). A central consideration in determining overbreadth is whether the discovery
request could have been more narrowly tailored to avoid inclusion of tenuous information
and still obtain the necessary pertinent information. In re CSX Corp., 124 S.W.3d 149,
153 (Tex. 2003). A trial court abuses its discretion when it compels overly broad
discovery. In re Graco Children’s Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (per
curiam).

       After reviewing the discovery requests in light of the allegations in the pleadings,
we conclude that the trial court abused its discretion in quashing the deposition on written
questions and subpoena duces tecum in their entirety, and an appellate remedy would be
inadequate. We conclude that Questions 12-16 and Document Requests 1 (A), 1(B), 2(A),
2(B), and 3 are reasonably calculated to lead to the discovery of admissible evidence and
narrowly tailored to relators’ fraud claims and the specific property at issue in this case.
Question 17 is not reasonably calculated to lead to the discovery of admissible evidence.
Document Requests 1(C)-(F), 2(C)-2(E), and-4-8 seek information about any property
owned by Atco, and are overbroad. These requests could have been more narrowly
tailored to address the property at issue in the underlying suit.

       We therefore conditionally grant the petition for a writ of mandamus in part and
direct the trial court to vacate its January 3, 2012 order quashing the deposition on written
questions and subpoena duces tecum, as to CenterMark Real Estate, LLC, and to issue an
order permitting discovery of Questions 12-16 and Document Requests 1(A), 1(B), 2(A),

                                              6
2(B), and 3. The writ will issue only if the trial court fails to act in accordance with this
opinion.

                                          PER CURIAM

Panel consists of Chief Justice Hedges and Justices Jamison and McCally.

                                             7