in Re National Lloyds Insurance Company ( 2015 )

NUMBERS 13-15-00390-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE NATIONAL LLOYDS INSURANCE COMPANY
On Petition for Writ of Mandamus.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza, and Longoria
Memorandum Opinion by Justice Longoria1
Relator National Lloyds Insurance Company filed a petition for writ of mandamus
seeking to vacate the trial court’s August 25, 2015 order compelling it to respond to
discovery propounded by the real parties in interest, Arguello, Hope, and Associates,
1 See TEX. R. APP. P. 52.8(d) (“When granting relief, the court must hand down an opinion as in
any other case,” but when “denying relief, the court may hand down an opinion but is not required to do
so.”); TEX. R. APP. P. 47.4 (distinguishing opinions and memorandum opinions).
individually and on behalf of all others similarly situated. We deny the petition for writ of
mandamus.
I. BACKGROUND
On July 8, 2015, the real parties filed a class action petition against relator on
grounds that relator engaged in intentional, tortious interference with existing attorney-
client representation agreements. The real parties, who are attorneys representing
relator’s policyholders, allege that relator has been “enlisting its agents to approach its
policyholders who are represented by counsel and convince those policyholders to fire
their attorneys, all in hopes that [relator] could drive down the settlement value of the
policyholders’ claims.”
On August 6, 2015, real parties filed an application for temporary restraining order,
request for temporary injunction, and a request for permanent injunction against relator.
This pleading also requested that the trial court order relator to respond to two discovery
requests, attached as “Exhibit A” to the application, within ten days of entry of the initial
temporary restraining order and prior to a hearing for a temporary injunction. The “Exhibit
A” requests for production comprised the following:
1. All documents and communications sent by National Lloyds
containing language identical or similar to the documents attached
hereto as Exhibit 1 since March 2012, including all drafts.
2. All documents and communications that National Lloyds sent to or
received from an insured following the insured’s termination of its
attorney representation agreement since March 2012.
“Exhibit 1” to the discovery requests consisted of an April 6, 2015 letter from relator
to one of its claims managers on a specific policy number stating, inter alia, that a
settlement offer on the claim had been rejected and relator “would have been able to
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make this settlement offer directly to your customer if not for attorney representation,” and
enclosing a “form” or “tool” for the customer to use if the customer wished to dismiss its
attorney. That same day, the trial court granted real parties’ request for a temporary
restraining order which, inter alia, required relator to respond to these two discovery
requests within ten days.
On August 10, 2015, relator filed a motion to transfer venue, plea to the jurisdiction,
and original answer. Relator contended that it failed to receive the “Exhibit A” discovery
requests as an attachment to the application when it was served with the real parties’
application. Real parties provided relator with the discovery requests that day. On August
13, 2015, the trial court extended the temporary restraining order. On August 20, 2015,
relator filed a motion to dissolve the temporary restraining order and a motion for
protective order. On August 21, 2015, real parties filed an emergency motion to compel
relator to respond to the requests for production. On August 24, 2015, the trial court set
real parties’ emergency motion to compel for hearing on August 25, 2015 and set relator’s
motion for protective order and motion to dissolve for hearing on August 28, 2015. Relator
filed a response and a supplemental response to the real parties’ motion to compel. On
August 25, 2015, the trial court granted the real parties’ emergency motion to compel and
required relator to respond to the discovery requests within two days.
This original proceeding ensued. By one issue, with several sub-issues, relator
contends that the trial court abused its discretion in holding a hearing on one day’s notice,
and then compelling relator to respond to discovery and produce documents within two
days to comply with an ex parte temporary restraining order issued without notice. The
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Court requested and received a response to the petition from the real parties in interest
and further received a reply thereto from relator.
II. STANDARD OF REVIEW
Ordinarily, mandamus relief lies when the trial court has abused its discretion and
a party has no adequate appellate remedy. In re Prudential Ins. Co., 148 S.W.3d 124,
135–36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex.
1992) (orig. proceeding). 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 or if it
clearly fails to correctly analyze or apply the law. See In re Cerberus Capital Mgmt., L.P.,
164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding). In determining whether appeal is
an adequate remedy, we consider whether the benefits outweigh the detriments of
mandamus review. In re BP Prods. N. Am., Inc., 244 S.W.3d 840, 845 (Tex. 2008) (orig.
proceeding).
A party has no remedy by appeal when a temporary restraining order is granted
that is not in compliance with the rules, and a writ of mandamus is appropriate in such
situations. In re Office of Attorney Gen., 257 S.W.3d 695, 697–98 (Tex. 2008) (orig.
proceeding). Similarly, mandamus relief is available when the trial court compels
production beyond the permissible bounds of discovery. In re Weekley Homes, L.P., 295
S.W.3d 309, 322 (Tex. 2009) (orig. proceeding); In re Am. Optical Corp., 988 S.W.2d 711,
713 (Tex. 1998) (orig. proceeding).
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III. NOTICE OF HEARING
Relator contends that it failed to receive proper notice of the August 25, 2015
hearing on the real parties’ emergency motion to compel. First, real parties electronically
filed and served the notice of hearing on August 22, 2015. See TEX. R. CIV. P. 4. Thus,
relator had three days’ notice of the hearing as required by the rules of civil procedure.
See id. R. 21(b). Second, the trial court has discretion to shorten the three-day notice
period provided by Texas Rule of Civil Procedure 21(b), and in doing so, may consider
any exigent circumstances presented in the case. See id.; Retzlaff v. GoAmerica
Commc’ns Corp., 356 S.W.3d 689, 697–98 (Tex. App.—El Paso 2011, no pet.); Buruato
v. Mercy Hosp. of Laredo, 2 S.W.3d 385, 387 (Tex. App.—San Antonio 1999, pet. denied).
Based on the record presented, relator has not established that the trial court abused its
discretion in setting the hearing with three days’ notice, particularly when relator’s motion
for protective order, based on the same discovery requests at issue in the real parties’
emergency motion to compel, had been filed five days before the hearing. Finally, the
record before this Court fails to indicate that relator objected to the alleged insufficient
notice of the hearing. The failure to object to insufficient notice of a hearing waives the
issue. See In re R.A., 417 S.W.3d 569, 581 (Tex. App.—El Paso 2013, no pet.); Twist v.
McAllen Nat’l Bank, 248 S.W.3d 351, 362 (Tex. App.—Corpus Christi 2007, no pet.).
IV. VOID ORDER
We next address relator’s arguments that the trial court’s order compels
compliance with a void temporary restraining order. Relator attacks the order on the
merits on grounds that the temporary restraining order fails to recite the “specific facts
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shown by affidavit or by verified complaint” that are required by Rule 680 to obtain an ex
parte order. See TEX. R. CIV. P. 680.
A temporary restraining order must state why it was granted without notice if
entered ex parte, state the date the order expires and set a hearing on a temporary
injunction, set a bond, and define the injury to be suffered by the applicant and explain
why that injury is irreparable. See id. R. 680, 684; see, e.g., Washington D.C. Party
Shuttle, LLC v. IGuide Tours, 406 S.W.3d 723, 741 (Tex. App.—Houston [14th Dist.]
2013, pet. denied) (en banc) (“Irreparable injuries are those for which the injured party
cannot be adequately compensated by damages or for which damages cannot be
measured by any certain pecuniary standard.”). Pursuant to Texas Rule of Civil
Procedure 680, “[no] temporary restraining order shall be granted without notice to the
adverse party unless it clearly appears from specific facts shown by affidavit or by the
verified complaint that immediate and irreparable injury, loss, or damage will result to the
applicant before notice can be served and a hearing had thereon.” TEX. R. CIV. P. 680.
Furthermore, “[e]very temporary restraining order granted without notice . . . shall define
the injury and state why it is irreparable and why the order was granted without notice.”
Id. “Orders that fail to fulfill these requirements are void.” In re Office of the Attorney
Gen., 257 S.W.3d at 697.
Each case in which a temporary injunction is sought presents a unique set of facts;
accordingly, “the nature and extent of a trial court's description of the reasons why an
applicant will suffer irreparable injury will vary from case to case.” El Tacaso, Inc. v. Jireh
Star, Inc., 356 S.W.3d 740, 747–48 (Tex. App.—Dallas 2011, no pet.). We assess the
adequacy of a trial court's temporary injunction order taking into account the extent to
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which the description of irreparable injury will: (1) enable a party against whom the
temporary injunction has been issued to understand the basis for the ruling and evaluate
the propriety of a challenge to the injunction, and (2) provide an adequate basis for
appellate review of the injunction. See id.
Relator contends that real parties exhibited only a “feeble attempt to feign
compliance with Rule 680” and quotes the following portion of the temporary restraining
order in support of its argument:
An ex parte order, without notice to Defendant, is necessary because there
was not enough time to give notice to Defendant, hold a hearing, and issue
a restraining order before the irreparable injury, loss, or damage would
occur. Specifically, without a temporary restraining order in place
immediately, Defendant will continue sending these unlawful
communications to persons it knows are represented by counsel, causing
imminent, irreparable damage to Plaintiff and Class Members as discussed
above.
However, relator’s quotation from the temporary restraining order lacks the following
relevant portion of the order:
After considering Plaintiff Arguello, Hope, and Associates, PLLC's,
individually and on behalf of all others similarly situated ("Plaintiff'' and
collectively, "Class Members"), application for temporary restraining order,
the pleadings, the affidavits, and arguments of counsel, the Court finds
there is evidence that harm is imminent to Plaintiff and Class Members, and
if the Court does not issue the temporary restraining order, Plaintiff and
Class Members will be irreparably injured because National Lloyds
Insurance Company ("Defendant'' or ''National Lloyds") will continue to
unlawfully interfere with existing attorney representation agreements of
Plaintiff and Class Members causing the loss of innumerable clients, the
inability to recover expenses spent on Plaintiffs and Class Members' cases,
an indeterminable amount of Plaintiff's and Class Members' law firms'
goodwill, and the overall future business of Plaintiff and Class Members.
Relator’s discussion of the contents of the temporary restraining order thus omits
part of the order pertaining to the necessity for an ex parte order. The omitted portion
clearly addresses “the specific facts” alleged that “immediate and irreparable injury, loss
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or damage” would occur to the real parties. TEX. R. APP. P. 52.11(c). Alleged injuries to
business relationships, the loss of clients, and the loss of goodwill can be classified as
irreparable injuries. See, e.g., Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d
215, 220 (Tex. App.—Fort Worth 2009, pet. denied).2
We conclude, based on the unique set of facts underlying this case, that the
temporary restraining order adequately enables relator to understand the basis for the
ruling and evaluate the propriety of a challenge to an injunction, and provides an adequate
basis for appellate review of the injunction. See In re Office of the Attorney Gen., 257
S.W.3d at 697; El Tacaso, Inc. v. Jireh Star, Inc., 356 S.W.3d at 747–48. Accordingly,
we conclude that the temporary restraining order meets the requirements of Rule 680
insofar as it defines the alleged irreparable injuries, losses, and damages, and states why
they would be irreparable. See TEX. R. CIV. P. 680.
Relator further assails the order on grounds that the real parties failed to show that
“immediate and irreparable injury, loss or damage” would result before notice could be
served and a hearing held. See id. Relator contends that the real parties’ petition had
been on file for almost a month and there was no need to obtain the order on an ex parte
basis. In their application for a temporary restraining order, real parties alleged that “there
is not enough time to serve notice on [the relator] because without a temporary restraining
order in place immediately, [relator] will continue sending these communications, causing
further irreparable damage . . . .”
2 Real parties provided this Court with the “Plaintiff’s Application for Temporary Restraining Order,
Request for Temporary Injunction, and Request for Permanent Injunction,” supported by affidavit, in the
form of a supplemental record. It was not included in relator’s appendix or record.
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In the instant case, the record and the mandamus response includes
documentation showing that relator continued issuing the letters at issue to their agents
after the lawsuit was filed and even after the temporary restraining order was issued—as
late as the date of inception for this original proceeding. Under these circumstances, we
conclude that real parties sufficiently identified specific facts to show why the order was
entered without notice and hearing. We reject relator’s arguments to the contrary.
V. ORDER EXCEEDED AUTHORITY
Relator contends that the temporary restraining order exceeded the scope of the
trial court’s authority because it compelled relator “to take affirmative acts well beyond the
scope of a valid temporary restraining order.” Relator specifically contends that the trial
court could not command it to comply with discovery requests in conjunction with the
temporary restraining order. Relator contends that mandating affirmative acts on the part
of the restrained party are inappropriate in a temporary restraining order because the
purpose of a temporary restraining order is to preserve the status quo. See Butnaru v.
Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002) (stating that the purpose of a temporary
injunction is to preserve the status quo of the litigation's subject matter pending a trial on
the merits).
Relator offers no authority supporting the proposition that the trial court lacks the
authority or discretion to order discovery during the course of a temporary restraining
order. Parties frequently seek, and trial courts order, expedited discovery in the course
of proceedings pertaining to temporary restraining orders. See, e.g., In re Tex. Health
Res., No. 05-15-00813-CV, 2015 WL 5029272, at *2 (Tex. App.—Dallas Aug. 26, 2015,
orig. proceeding) (“The trial court ordered that the discovery take place before the
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expiration of the temporary restraining order.”); In re MetroPCS Commc’ns, Inc., 391
S.W.3d 329, 332 (Tex. App.—Dallas 2013, orig. proceeding) (“On November 5, 2012,
Golovoy filed a ‘Motion for a Temporary Restraining Order and an Order Compelling
Expedited Discovery.’”); see also In re Meyer, No. 14-14-00833-CV, 2014 WL 5465621,
at *1 (Tex. App.—Houston [14th Dist.] Oct. 24, 2014, orig. proceeding) (mem. op. per
curiam) (“On October 14, 2014, Gulfstream filed an original petition, application for
temporary restraining order, application for temporary injunction, and motion for expedited
discovery against relators in the trial court.”); Miga v. Jensen, No. 02-11-00074-CV, 2012
WL 745329, at *2 (Tex. App.—Fort Worth Mar. 8, 2012, no pet.) (mem. op.) (“Ten days
later, Jensen filed with the trial court an application for a temporary restraining order,
injunction, and expedited discovery.”).
To the extent that relator argues that the trial court abused its discretion in ordering
production within two days, we note that the trial court has discretion to schedule
discovery and may shorten or lengthen the time for making a response for good cause.
In re Colonial Pipeline Co., 968 S.W.2d 938, 943 (Tex. 1998) (orig. proceeding); In re
Exmark Mfg. Co., Inc., 299 S.W.3d 519, 532–33 (Tex. App.—Corpus Christi 2009, orig.
proceeding); see, e.g., TEX. R. CIV. P. 190.5, 191.1. Moreover, relator’s contention that it
had only two days’ notice that it was required to produce the documents is disingenuous
insofar as it knew that discovery requests had been propounded when it received the
pleading on August 6 and received the discovery requests themselves on August 10.
Relator’s original deadline to respond thus elapsed on August 20, five days before the
order at issue in this original proceeding and seven days before the deadline for
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discovery. Accordingly, we reject relator’s characterization of the time available for
response as a basis for mandamus relief.
VI. OVERBROAD DISCOVERY
Relator contends the compelled production is facially overbroad. Relator contends
that “the requests are not limited in time or subject matter relevant to the case.” In
response, real parties argue that “the record does not contain any of the discovery
objections [relator] now urges.”
The text of the requests for production show that they are limited in date and apply
to documents created “since March 2012” and are limited in subject matter to “documents
and communications sent by National Lloyds containing language identical or similar to
the documents attached hereto as Exhibit 1 . . . including all drafts,” and “documents and
communications that National Lloyds sent to or received from an insured following the
insured’s termination of its attorney representation agreement.” These discovery
requests are limited in both time and scope.3 Moreover, given that the record fails to
indicate that relator made these objections to the trial court, we do not consider these
objections as a basis for determining that the trial court abused its discretion in ordering
the discovery. See In re Bristol-Myers Squibb Co., 975 S.W.2d 601, 605 (Tex.1998) (orig.
3 Generally, the scope of discovery is within the trial court's discretion. In re Graco Children's
Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (per curiam); In re CSX Corp., 124 S.W.3d 149, 152 (Tex.
2003) (orig. proceeding) (per curiam). The scope of discovery includes 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 is
reasonably calculated to lead to the discovery of admissible evidence. TEX. R. CIV. P. 192.3; see In re Nat’l
Lloyds Ins. Co., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding). However, a party's discovery requests
must show a reasonable expectation of obtaining information that will aid in the resolution of the dispute.
In re CSX Corp., 124 S.W.3d at 152. Therefore, 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). Accordingly, discovery requests must not be overbroad. See, e.g., In re Allstate Cnty. Mut.
Ins. Co., 227 S.W.3d 667, 669–70 (Tex. 2007) (per curiam); In re CSX Corp., 124 S.W.3d at 153. “A specific
request for discovery reasonably tailored to include only matters relevant to the case is not overbroad
merely because the request may call for some information of doubtful relevance.” Texaco, Inc. v.
Sanderson, 898 S.W.2d 813, 815 (Tex. 1995) (orig. proceeding) (per curiam).
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proceeding) (stating that reviewing courts focus on the record that was before the trial
court in determining whether or not the trial court has abused its discretion); see also In
re Cl Host, Inc., 92 S.W.3d 514, 516 (Tex. 2002) (orig. proceeding) (discussing the
necessity of a timely objection); Bielamowicz v. Cedar Hill I.S.D., 136 S.W.3d 718, 723
(Tex. App.—Dallas 2004, pet. denied) (same).
VII. CONCLUSION
The Court, having examined and fully considered the petition for writ of mandamus,
the response, and the reply, under the applicable standard of review, is of the opinion that
relator has not shown itself entitled to the relief sought. Accordingly, we LIFT the stay
that was previously imposed in this case and we DENY the petition for writ of mandamus.
See TEX. R. APP. P. 52.8(a).
NORA L. LONGORIA
JUSTICE
Delivered and filed the
3rd day of November, 2015.
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