Court Opinion

ID: 9647022
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:21:23.001412+00
Date Added: 2024-06-11T18:11:44.893975
License: Public Domain

Dissenting opinion by
HINOJOSA, J.
*378HINOJOSA, Justice, dissenting.
This is an original proceeding arising out of a trial court’s post-judgment ruling. The majority holds that the trial court clearly abused its discretion in denying discovery of a confidential settlement agreement and information regarding LCC’s (La-Mantia, Collum, & Collier, the real party in interest) directors’ involvement with businesses unrelated to LCC. I write separately to express my view that the trial court acted within its discretion in making both decisions. For that reason, I respectfully dissent.
Relator (Collier Services Corporation) sued LCC for breach of contract. Subsequently, it filed a supplemental petition including claims that LCC was the alter ego of Steven LaMantia and Joseph LaMantia, two of the directors, and that assets were being transferred from LCC to other companies held by Steven and Joseph LaMan-tia. LCC filed a Rule 13 motion alleging that the supplemental pleading was filed in bad faith, and that there was no evidence to support the allegations it contained.1 Relator then non-suited its supplemental petition, dropping its alter ego theory and the LaMantias from the case.
An agreed judgment was entered requiring LCC to pay relator over $200,000.00. In post-judgment discovery, relator sought to discover whether assets had been fraudulently concealed. For some reason not reflected in the record, relator suspected that certain assets had been transferred to other companies owned by the real party in interest’s directors. In an effort to locate such property the following question was submitted:
INTERROGATORY NO. 9 For each person who is a director of the corporation or has been a director as any timé in the last five years, please state:
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e. The full name and complete address of each business in which the director is associated in any way, or by which the director is employed.
The real party in interest responded stating that the requested material was not relevant, and not likely to lead to relevant information. The real party in interest did, however, answer the following interrogatory without objection:
INTERROGATORY NO. 30:
Has the money, real property, or other personal property heretofore belonging wholly or partly to the corporation been transferred to — or is it in the possession of — any present or former shareholder, employee, agent, officer, or director of the corporation or any relative (by blood or marriage), friend, or acquaintance of any of them? If so, for each transaction state:
a. A complete description of the transaction.
b. A complete description of the property involved.
c. The full name and complete address of each person involved.
d. The payment or other consideration the corporation received in exchange.2
In addition, at a deposition, Steven La-Mantia was asked questions regarding the settlement of a federal suit in which LCC was involved. He responded that the settlement was confidential.
Relator filed a motion to compel and for sanctions. The motion sought discovery of the contents of the federal settlement, and an answer to interrogatory 9(e). Attached to the motion was the deposition of Steven LaMantia.
At the hearing the trial court ruled that “Plaintiff is entitled to the corporation’s financial records and dealings in their entirety.” The court denied the motion to *379compel and for sanctions. Relator now brings this original mandamus proceeding in an effort to compel production of the requested information.
I agree with the majority’s analysis of the jurisdictional issue and write separately only on the merits of this mandamus.
The standards of review an appellate court applies in determining whether to issue a writ of mandamus are well settled. Mandamus issues only to correct a clear abuse of discretion. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985); McAllen State Bank v. Salinas, 738 S.W.2d 381, 384 (Tex.App.-Corpus Christi 1987 orig. proceeding). An appellate court issuing a writ of mandamus errs when it reverses a trial court on a discretionary ruling unless, under the circumstances of the case, the facts and law permit the trial court to make but one decision. See Johnson, 700 S.W.2d at 917; Pat Walker & Co. v. Johnson, 623 S.W.2d 306, 308 (Tex.1981). For mandamus to lie, the trial court must be more than wrong, it must have clearly erred. We cannot substitute our judgment for that of the trial court. Johnson, 700 S.W.2d at 918.
Mandamus is only appropriate to remedy clearly incorrect discovery rulings. See Axelson, Inc. v. McIlhany, 798 S.W.2d 550, 553 (Tex.1990); General Motors Corp. v. Lawrence, 651 S.W.2d 732, 733 (Tex.1983). Generally, discovery is permitted into any matter not privileged, that is relevant to the subject matter and is “reasonably calculated to lead to the discovery of admissible evidence.” Axelson, 798 S.W.2d at 553; TEX.R.CIV.P. 166b(2)(a). Although this is a broad standard, discovery is not permitted into irrelevant matters. See General Motors Corp., 651 S.W.2d at 734; Gordon v. Blackmon, 675 S.W.2d 790, 793 (Tex.App.-Corpus Christi 1984, orig. proceeding). Generally, the trial court has broad discretion in discovery matters. See Gordon, 675 S.W.2d at 793 (discovery is discretionary).
In determining whether the trial court clearly abused its discretion, we must view the court’s ruling in the context of the evidence and the circumstances. Some of the circumstances surrounding the court’s ruling are overlooked by the majority, and, in my opinion, lead to faulty analysis.
As an initial matter, I believe that the majority errs in failing to consider the fact that the trial court necessarily made its ruling based on all of the events that occurred during this litigation, and not just the arguments presented at the hearing. The trial court has the power and discretion to take judicial notice of its entire file in determining what is relevant. See McCurry v. Aetna Cas. & Sur. Co., 742 S.W.2d 863, 867-68 (Tex.App.-Corpus Christi 1987, writ denied) (trial court may take judicial notice of its own records in same case); Pitts v. Dallas Nurseries Garden Center, Inc., 545 S.W.2d 34, 37 (Tex.Civ.App.-Texarkana 1976, no writ) (post-judgment proceeding); Tex.R.Civ.Evid. 201. This the court may do on its own motion. Tex.R.Civ.Evid. 201(c). For example, in Keller v. Walker, 652 S.W.2d 542, 544 (Tex.App.-Dallas 1983, orig. proceeding), the appellate court noted that the trial court properly took judicial notice of evidence and events at a preceeding trial in finding that the relator was able to pay certain costs.
The record and briefs of the parties in the instant case indicate that relator filed a supplemental petition alleging an alter ego theory and fraudulent concealment of assets. This pleading brought the directors in as parties; however, when the Rule 13 motion for sanctions was filed, this pleading was dropped and the directors were no longer parties. When post-judgment proceedings were initiated to discover assets, relator again maintained that assets were fraudulently concealed.
In an effort to discover these alleged assets, interrogatories 30 and 9(e) were propounded. Interrogatory 30, which is set forth above, provided complete discovery of all information regarding the transfer of assets from LCC to any other entity. The answer indicated that no assets had been transferred, and necessarily indicated that none of the director’s other businesses were involved in any prior dealings with LCC. Nevertheless, relator still *380sought information relating to businesses involving the directors by an answer to interrogatory 9(e). This information was sought even though the directors were no longer parties, and all relevant information regarding their businesses was already disclosed in the answer to interrogatory 30. Thus, any information disclosed would necessarily be irrelevent.
After the hearing, the court properly ruled that the corporation’s financial records and dealings were discoverable in their entirety. When the answer to interrogatory 30 is considered, it is clear that the court only denied discovery of the names of businesses with which the directors were involved and that did not involve LCC.
I would hold that it was within the trial court’s discretion to determine that all relevant information was all ready disclosed, and that all new information sought in interrogatory 9(e) was not relevant.
This court has previously noted that “the discretionary nature of discovery and the amorphous notion of relevancy most often counsels against appellate court intervention in the discovery process.” Gordon v. Blackmon, 675 S.W.2d 790, 793 (Tex.App.-Corpus Christi 1984, orig. proceeding) (citing Pat Walker & Co. Inc., 623 S.W.2d at 308). The Fourteenth Court of Appeals has also recognized that it is rarely appropriate for an appellate court to second guess a trial court on a question of relevancy: “we feel we should not substitute our judgment for that of a trial court in a ruling on relevancy.” C-Tran Dev. Corp. v. Chambers, 772 S.W.2d 294, 296 (Tex.App.-Houston [14th Dist.] 1989, orig. proceeding). In the instant case, we are substituting our judgment for that of the trial court on a question of relevancy. This we cannot do in a mandamus proceeding. Johnson, 700 S.W.2d at 918 (appellate court may not substitute its judgment for that of the trial court).
In addition, I note that the entire record has not been brought into this court. Relator’s burden in this respect is to bring a sufficient record showing that the trial court clearly abused its discretion. As stated above, a ruling on relevance cannot be made in a vacuum; rather, by definition, the trial court must determine relevancy within the context of the entire case — under the totality of the circumstances. Failure to bring the court documents and papers bearing on the subject of relevancy waives the argument that the answers to interrogatory 9(e) are relevant. Thus, as an additional basis for denying the relator’s requested relief, I would hold that relator failed to bring a sufficient record to this court to demonstrate that the trial court clearly abused its discretion in finding that the additional information sought by the answer to interrogatory 9(e), which did not concern LCC, was not relevant.
The majority also holds that the record is insufficient to establish that the settlement agreement in the federal case was confidential, and therefore not subject to discovery. The burden at the hearing was on the real party in interest to produce some evidence that the federal settlement agreement was confidential. See Western Cos. & Sur. Co. v. Spears, 730 S.W.2d 821, 822 (Tex.App.-San Antonio 1987). The deposition of Steven LaMantia, which, in my view, is part of the record,3 contains the following:
Q. As you understand it what were the terms of the settlement of that case?
Mr. Hole: Was it confidential?
Mr. LaMantia: Yes it was.
This evidence is clearly sufficient for the trial court to find that the settlement was confidential, and therefore to deny its discovery. Thus, this court errs in finding “no evidence” that the settlement agreement was confidential.
*381This court is apparently of the view that the only way to establish that the settlement agreement in the federal case was confidential would be to tender a copy of the agreement for an in camera inspection. I disagree. Although certain privileges may require documentary proof, see e.g. id. at 822 (the documents themselves may constitute the only evidence substantiating the claim of attorney-client privilege), in the instant case, testimony by a person with personal knowledge constitutes sufficient evidence of the settlement agreement’s confidentiality to bring its compelled discovery within the trial court's discretion. In my view, this evidence adequately supports the trial court’s ruling, particularly in view of the trial court’s expressed concern for the principle of comity between state and federal courts.4
If the relator seeks to establish that the trial court clearly abused its discretion in ruling that the agreement was not discoverable, it was incumbent upon them to establish a sufficient record in this court to prove that fact. Their failure to do so, in my view, has resulted in a waiver of their right to complain in this court.
To summarize, I would deny the writ of mandamus for three reasons. First, there is sufficient evidence supporting the trial court’s ruling that the answer to interrogatory 19(e) is irrelevant and unnecessary. Second, relator failed to bring a sufficient record into this court to establish that the trial court clearly abused its discretion in failing to compel an answer to question 9(e). Finally, there is sufficient evidence indicating that the settlement agreement was confidential, and relator failed to establish otherwise. For these reasons I believe this Court should not issue the writ of mandamus. I dissent.

. Rule 13 provides for sanctions if false or groundless pleadings are filed. See Tex.R.Civ.P. 13.

. The answer to interrogatory 30 was: “The corporation has not transferred any of the above-referenced items other than salaries." Relator has at no time argued that the real party in interest failed to fully disclose information in its answer to interrogatory 30. There is no record that a motion to compelí was filed requesting a more complete answer.

. The deposition of Steve LaMantia, a director, was attached to the relator’s motion to compel and for sanctions. The majority indicates that the deposition cannot be considered for any purpose because it was not tendered into evidence at the hearing. I disagree. The deposition was attached to the relator’s motion to compel and for sanctions. It was part of the court’s file, and the focal point of discussion at the hearing. For this reason, I feel that this evidence was properly considered by the trial court.

. In effect, this court is ordering disclosure of information ordered confidential by a federal court. This Court does not have the power to overturn a federal court’s decision in this regard. See U.S. Const, art. VI (Supremacy Clause). If relator seeks discovery of this settlement agreement, it should do so from the federal court.