Court Opinion

ID: 6332055
Source: CourtListenerOpinion
Date Created: 2022-04-15 07:12:53.246481+00
Date Added: 2024-06-11T09:23:16.269539
License: Public Domain

In The

                                 Court of Appeals

                     Ninth District of Texas at Beaumont

                               __________________

                               NO. 09-22-00023-CV
                               __________________

IN RE ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY

__________________________________________________________________

                           Original Proceeding
             58th District Court of Jefferson County, Texas
                       Trial Cause No. A-203,954
__________________________________________________________________

                           MEMORANDUM OPINION

      Relator Allstate Vehicle and Property Insurance Company (“Allstate”) seeks

mandamus relief from an order compelling document production. On January 13,

2022, the trial court ordered Allstate to respond to the plaintiff’s request to produce

documents, referred to by the parties as “the McKinsey Slides” and “Homeowner

CCPR”, that previously were produced to plaintiff’s counsel under a protective order

in a federal action styled Tarver v. Allstate Texas Lloyds. We temporarily stayed

production of the documents and obtained a response from the Real Party in Interest,

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Hattie Dumas, before submitting the case to the Court.1 After reviewing the petition,

response, reply, the mandamus record, and applicable law, we conclude the trial

court clearly abused its discretion by compelling document production in response

to facially overbroad discovery requests and Allstate lacks an adequate remedy by

appeal. We conditionally grant mandamus relief without considering the remaining

issues presented by Allstate in its mandamus petition.

      The trial court compelled Allstate to respond to Dumas’s requests for

production, as follows:

      Request 1:
      Produce a true and complete copy, in both digital and hard copy, of the
      following pages of the PowerPoint presentation slides [commonly
      referred to as “the McKinsey slides”] that were prepared in connection
      with the feasibility and implementation project performed by
      McKinsey & Company between 1992 and 2000 regarding Allstate’s
      Claims Core Process Redesign (“CCPR”) claim handling system.
      These slides were produced by opposing counsel on behalf of Allstate
      in October 2020 in Civil Action No. 1:19-CV-00586; Steve Tarver and
      Janna Tarver v. Allstate Texas Lloyds; In the United States District
      Court for the Eastern District of Texas; U.S. District Judge Michael
      Truncale, presiding. I have attached the complaint (Exhibit A),
      production requests (Exhibit B), motion to compel hearing transcript
      (Exhibit C), and the order signed by the district judge (Exhibit D)

      1
         A suggestion of death is on file with the trial court. A motion to retain filed
by plaintiff’s counsel on August 18, 2021, stated that counsel had located Dumas’s
sister, Gwendolyn Scott-Lee, and that Scott-Lee had filed an application for
appointment as administrator of the Dumas’s estate. The mandamus record supplies
no information about the current status of the probate proceedings. The live pleading,
a motion to retain, and the motion to compel were filed by “Plaintiff” without further
identification. For ease of reference, we refer to the Real Party in Interest as
“Dumas”.

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      ordering production in the Tarver case. There are approximately 13,455
      pages in the requested McKinsey slide file.

      Request 2:
      Produce slides and documents that specifically refer to Homeowner
      CCPR to the extent that the previous production request does not
      encompass production of those slides. Specifically, produce slides and
      documents that specifically refer to homeowner water damage claims.
      These documents were also produced by opposing counsel on behalf of
      Allstate in October 2020 in Civil Action No. 1:19-CV-00586; Steve
      Tarver and Janna Tarver v. Allstate Texas Lloyds; In the United States
      District Court for the Eastern District of Texas; U.S. District Judge
      Michael Truncale, presiding.

      Allstate complains that the trial court abused its discretion by ordering

irrelevant, overbroad and disproportionately burdensome document production of

thousands of pages of documents that are twenty to thirty years old and have no

bearing on whether Allstate complied with its contractual and extra-contractual

duties when handling Dumas’s 2018 water damage claim.2 Allstate argues there is

no adequate remedy by appeal for the trial court’s abuse of discretion in ordering

irrelevant discovery that is not proportional to the needs of the case.

      In response to Allstate’s mandamus petition, Dumas argues the substance of

her deceptive insurance practices and fraud allegations concern the requested

documents. In her trial court pleadings, Dumas concedes the McKinsey Slides and

Homeowner CCPR were created long ago, and that Allstate no longer uses CCPR

      2
       In a separate issue, Allstate also contends that the trial court erred by striking
the Declaration of Don Odom when considering Allstate’s Motion for
Reconsideration of the trial court’s order.
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terminology in its claims handling process. Dumas’s pleadings include extensive

recitations that Allstate likely has in its possession information about the mid-1990’s

CCPR program and allege:

               The goals, processes, and procedures of the McKinsey claim
      handling program have been absorbed into Allstate’s overall way of
      doing business. While Allstate might no longer use the CCPR
      terminology, the concepts, and teachings of CCPR in using the claims
      handling department as a profit center remain in effect. Allstate never
      stopped using CCPR in its handling of insurance claims. Allstate never
      hired McKinsey or another consulting firm to take on the monumental
      task of teaching a different claims handling system to its employees,
      instilling a new claim handling culture, or ensuring the elimination of
      CCPR from Allstate’s claim handling culture, goals, and procedures.
      The goals, processes, and procedures left over from the McKinsey
      claim handling program have been used to deny the plaintiff’s claim in
      a deceptive, fraudulent, oppressive, and malicious manner. In the case
      at hand, Allstate employed its CCPR-based claim system in its handling
      of plaintiff’s claim. In doing so, Allstate denied or underpaid plaintiff’s
      claim as part of a strategy and scheme to guarantee or increase its
      surplus and shareholder returns. To date, Allstate continues to delay in
      the payment for the damages to the property. As such, the plaintiff’s
      claim remains unpaid, and the plaintiff was never able to properly repair
      the property.

      Dumas’s lawsuit asserts a claim of bad faith, asserting that Allstate breached

a duty of good faith and fair dealing by denying and delaying payment of a covered

claim when Allstate knew or should have known its liability under the policy was

reasonably clear following its January 31, 2018 inspection. She asserts a claim for

breach of contract because Allstate refused to pay the full amount of the cost to repair

or replace the property damage. Dumas asserts a claim for deceptive insurance

practices alleging Allstate failed to adequately settle the claim, failed to affirm or
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deny coverage within a reasonable time, refused to fully compensate Dumas under

the terms of the policy, failed to timely acknowledge the claims within the statutorily

mandated time of receiving notice, and failed to accept or deny the claim within the

statutorily mandated time of receiving all information reasonably necessary to

investigate the claim. In her pleadings, Dumas alleges Allstate violated the Insurance

Code by refusing to pay a claim without conducting a reasonable investigation, and

she alleges “[t]he McKinsey claims handling program instructed Allstate’s claim

representatives to handle plaintiff’s claim in this manner.”

      Mandamus will issue to correct a discovery order if there is a clear abuse of

discretion and there is no adequate remedy at law. In re Colonial Pipeline Co., 968

S.W.2d 938, 941 (Tex. 1998) (orig. proceeding). A trial court abuses its discretion

when its ruling is so arbitrary and unreasonable that it constitutes a clear and

prejudicial error of law. In re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (orig.

proceeding).

      The Texas Rules of Civil Procedure allow a discovery request that has a

reasonable expectation of obtaining information that will aid in resolution of the

dispute. See id. at 152. That said, discovery requests must not be overbroad. In re

Nat’l Lloyds Ins. Co., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding). “A

central consideration in determining overbreadth is whether the request could have

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been more narrowly tailored to avoid including tenuous information and still obtain

the necessary, pertinent information.” In re CSX Corp., 124 S.W.3d at 153.

      “[A] party may obtain discovery regarding any matter that is not privileged

and is relevant to the subject matter of the pending action, whether it relates to the

claim or defense of the party seeking discovery or the claim or defense of any other

party.” Tex. R. Civ. P. 192.3(a). But “[o]verbroad requests for irrelevant information

are improper whether they are burdensome or not[.]” In re Allstate Cty. Mut. Ins.

Co., 227 S.W.3d 667, 670 (Tex. 2007) (orig. proceeding). An overbroad discovery

request is one that seeks irrelevant information not properly tailored to the dispute

at hand as to time, place, and subject matter. In re K & L Auto Crushers, LLC, 627

S.W.3d 239, 252 (Tex. 2021) (orig. proceeding). “It is the discovery proponent’s

burden to demonstrate that the requested documents fall within the scope-of-

discovery of Rule 192.3.” In re TIG Ins. Co., 172 S.W.3d 160, 167 (Tex. App.—

Beaumont 2005, orig. proceeding). When a party propounds overly broad requests,

the trial court must either sustain the objection or narrowly tailor the requests. In re

Mallinckrodt, Inc., 262 S.W.3d 469, 474 (Tex. App.—Beaumont 2008, orig.

proceeding).

      “Discovery orders requiring document production from an unreasonably long

time period or from distant and unrelated locales are impermissibly overbroad.” In

re CSX Corp., 124 S.W.3d at 152. Dumas is not entitled to discover documents

                                           6
unrelated to the insurance event at issue. See In re Nat’l Lloyds Ins. Co., 507 S.W.3d

219, 225 (Tex. 2016) (orig. proceeding). A narrowly tailored document request

about a tort committed in handling a claim should be reasonably limited in time and

scope to near the time when the loss occurred and when the claim was processed.

See id. Dumas alleges Allstate still uses the same claims handling “concepts”

described in the McKinsey Documents, but she did not tailor her request to

documents that were in effect when Dumas’s claims arose.

      Discovery, even of potentially relevant or admissible evidence, may not be

used as a costly fishing expedition. See K Mart Corp. v. Sanderson, 937 S.W.2d 429,

431 (Tex. 1996) (orig. proceeding). Rather, requests must be “reasonably tailored”

to include only matters relevant to the case and must be limited to the relevant time.

See Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815 (Tex. 1995) (orig. proceeding).

A discovery order is overbroad if it could have been more narrowly tailored to avoid

including tenuous information. See In re CSX Corp., 124 S.W.3d at 153. If the

requests are overbroad as to time, location, or scope, and could have easily been

more narrowly tailored to the dispute at hand, mandamus may lie. In re Allstate Cty.

Mut. Ins. Co., 227 S.W.3d 667 at 669. We conclude that the trial court abused its

discretion by compelling document production in response to facially overbroad

requests for production. Mandamus is the proper remedy when a discovery order

                                          7
compels production beyond the bounds of permissible discovery under the

applicable rules of civil procedure. In re Nat’l Lloyds Ins. Co., 507 S.W.3d at 223.

      We lift our stay order and conditionally grant mandamus relief. We are

confident that the trial court will vacate the January 13, 2022 order compelling

Allstate to respond to Dumas’s request for production. A writ of mandamus will

issue only if the trial court fails to comply.

      PETITION CONDITIONALLY GRANTED.

                                                           PER CURIAM

Submitted on February 8, 2022
Opinion Delivered April 14, 2022

Before Kreger, Horton and Johnson, JJ.

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