in Re Allstate Fire and Casualty Insurance Company ( 2021 )

Petition for Writ of Mandamus Conditionally Granted in Part and Denied in
Part, and Majority and Dissenting Opinions filed January 7, 2021.
In The
Fourteenth Court of Appeals
NO. 14-20-00430-CV
IN RE ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY,
Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
11th District Court
Harris County, Texas
Trial Court Cause No. 2019-18291
MAJORITY OPINION
In this original proceeding, relator Allstate Fire and Casualty Insurance
Company seeks mandamus relief from the trial court’s orders compelling a
deposition of relator’s corporate representative on several topics related to the
plaintiff’s claim for underinsured motorist (“UIM”) coverage. See Tex. Gov’t Code
§ 22.221; see also Tex. R. App. P. 52. We conditionally grant the petition in part
and deny it in part.
Background
Plaintiff and real party in interest, Reynaldo Arredondo, was involved in a
motor vehicle accident with Daniel Guzman. Arredondo asserted a claim for
personal injuries against Guzman, which Guzman and his automobile insurance
carrier settled before Arredondo filed suit.
Arredondo was insured under an automobile insurance policy issued by
Allstate. The parties agree that the policy provides for UIM coverage. Generally,
Texas UIM coverage provides for “payment to the insured of all sums which he shall
be legally entitled to recover as damages from owners or operators of underinsured
motor vehicles because of bodily injury or property damage in an amount up to the
limit specified in the policy, reduced by the amount recovered or recoverable from
the insurer of the underinsured motor vehicle.” Brainard v. Trinity Univ. Ins. Co.,
216 S.W.3d 809, 812 (Tex. 2006).
Arredondo filed this lawsuit against Allstate, seeking a declaratory judgment
that he is entitled to UIM benefits under the Allstate policy and the amount of
benefits. The petition included allegations that Guzman’s negligence caused the
accident and that Arredondo was injured as a result. Arredondo asserted neither
breach of contract nor extra-contractual claims. Allstate answered with a general
denial. Allstate did not assert any affirmative defenses but stated in its answer that
the policy contains conditions and exclusions that Allstate does not waive.
Arredondo subsequently noticed the deposition of Allstate’s corporate
representative on the following twelve topics:
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1. Facts surrounding Plaintiff’s claims;
2. Validity and specifics of the insurance policy sold to Plaintiff;
3. Plaintiff’s rights under the insurance policy at issue;
4. Requirements for coverage and payment under the policy;
5. Investigation of Plaintiff’s claims;
6. Reason(s) for denying or limiting Plaintiff’s claims;
7. Defendant’s investigation of the tortfeasor;
8. Defenses raised in any of Defendant’s live pleadings;
9. Possible defenses not yet raised in Defendant’s live pleadings;
10. Damage model proposed by Defendant;
11. Process of determining liability and amount of damages in this
claim; and
12. Settlement negotiations in this case.
Allstate filed a motion to quash the deposition. The deposition should be
quashed, Allstate asserted, because: (1) the deposition of its corporate representative
is not reasonably calculated to lead to the discovery of admissible evidence in
Arredondo’s UIM case; (2) no one at Allstate has personal knowledge about the facts
of the accident or Arredondo’s claimed damages; (3) its handling of Arredondo’s
claim is not at issue and, in any event, will not be ripe until liability and damages
have been established in the accident case; and (4) the work product of a corporate
representative designated by Allstate is protected under the work product privilege.
Arredondo filed a response and an amended response to the motion to quash.
In his amended response, Arredondo argued that: (1) he is entitled to a corporate
representative deposition in a UIM case under Texas law, because an inability to
depose a representative of the only defendant impairs his ability to prove the relevant
facts necessary to trigger UIM coverage; (2) the representative’s asserted lack of
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personal knowledge is not a proper objection; and (3) not all of Allstate’s
investigation is privileged.
The trial court held a hearing on Allstate’s motion to quash on January 6, 2020
and denied Allstate’s motion that day. Counsel later communicated about available
deposition dates, and during the conversation Allstate’s counsel advised that he
intended to seek rehearing with the trial court and, if necessary, file for mandamus
relief in the court of appeals.
On February 10, 2020, Arredondo served another notice to take the deposition
of Allstate’s corporate representative. Allstate filed a timely motion to quash the
deposition based on its objections to the time and place of the proposed deposition.
Arredondo then filed a motion to compel the deposition. Arredondo did not
assert new arguments but requested the court to enforce its January 6, 2020 order
and compel the unrestricted deposition of Allstate’s representative.
Allstate filed a document entitled “Response To Motion To Compel And
Motion To Reconsider, Or In The Alternative Motion To Limit Scope.” In this
filing, Allstate requested the trial court to reconsider its January 6, 2020 ruling and
quash the deposition in its entirety for the reasons stated in the motion to quash.
Alternatively, Allstate asked the court to at least preclude inquiry into topics 6, 10,
11, and 121 because those topics (1) would not lead to the discovery of admissible
evidence on the issues of liability or the amount of Arredondo’s damages, and
(2) delve into information that was prepared in anticipation of litigation and is
protected by the work product and trade secret privileges. Allstate also singled out
1
Topics 6, 10, 11, and 12 inquire into the reasons for denying or limiting Arredondo’s
claim, Allstate’s proposed damage model, the process for determining liability and the amount of
damages, and settlement negotiations in this case.
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topic 9—regarding possible defenses not yet raised in Allstate’s live pleadings—as
objectionable for additional reasons, namely that it is speculative, seeks to discover
work product, and would unreasonably require a layperson representative to testify
regarding affirmative defenses that have not been placed in issue by Allstate’s
answer.
After a hearing on April 13, 2020, the trial court signed an order on April 27,
2020 directing Allstate to produce a corporate representative on the twelve topics
identified above.
The deposition did not occur, and on June 9, 2020, Arredondo filed his second
motion to compel, which he set for hearing on June 29, 2020. Allstate filed its
petition for writ of mandamus in this court on June 15, 2020, challenging the trial
court’s January 6, 2020 and April 27, 2020 orders. We granted Allstate’s motion for
temporary relief and stayed the challenged orders pending our decision on Allstate’s
petition.
Mandamus Standards
To obtain mandamus relief, a relator generally must show both that the trial
court clearly abused its discretion and that the relator has no adequate remedy by
appeal. In re Dawson, 550 S.W.3d 625, 628 (Tex. 2018) (orig. proceeding) (per
curiam); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig.
proceeding). 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). We review the trial court’s legal conclusions with
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limited deference. See Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding). The relator must establish that the trial court could reasonably have
reached only one decision. 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., 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).
Analysis
In seeking mandamus relief, Allstate contends that the trial court abused its
discretion by allowing the deposition because the topics of inquiry exceed the scope
of relevant issues necessary to adjudicate the underlying liability and damages
determinations, and, to the extent any topics are relevant to the tortfeasor’s liability
and Arredondo’s damages, any Allstate representative would lack personal
knowledge of those facts. Allstate further asserts that deposing its representative on
the existence, extent, or duration of Arredondo’s claimed injuries is unreasonable
and unduly burdensome because that information is more readily obtainable by
Arredondo, who has superior access to his medical records. Allstate also argues that
certain topics seek privileged information. Finally, Allstate contends that it lacks an
adequate remedy by appeal because it is being put to the expense of presenting a
witness to testify on matters irrelevant to any pending claim.
A. Laches
At the outset, we address Arredondo’s contention that Allstate’s mandamus
petition is barred by laches because Allstate delayed too long in seeking appellate
relief. The trial court signed the orders at issue on January 6, 2020 and April 27,
2020. Allstate did not file its mandamus petition until June 15, 2020. According to
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Arredondo, this delay in seeking relief justifies denying Allstate’s petition without
reaching the merits.
Although mandamus is not an equitable remedy, its issuance is largely
controlled by equitable principles, including the principle that equity aids the diligent
and not those who slumber on their rights. Rivercenter Assocs. v. Rivera, 858
S.W.2d 366, 367 (Tex. 1993) (orig. proceeding). Whether a party’s delay in
asserting its rights precludes mandamus relief depends on the circumstances. In re
Oceanografia, S.A. de C.V., 494 S.W.3d 728, 729 (Tex. 2016) (orig. proceeding)
(per curiam). In examining this issue, we consider whether there is any justification
for the delay, whether the party seeking mandamus bears fault for the delay, and
whether the delay has prejudiced the opposing party. See id. at 730-31; see also,
e.g., In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 675-76 (Tex. 2009) (orig.
proceeding); In re E.I. du Pont de Nemours & Co., 92 S.W.3d 517, 524-25 (Tex.
2002) (orig. proceeding); Rivercenter Assocs., 858 S.W.2d at 367.
We are told that after the January 6 order, Arredondo’s counsel reached out to
Allstate’s counsel for available deposition dates. Allstate’s counsel did not provide
dates but instead represented that Allstate would seek reconsideration from the trial
court and, failing a successful result, file a mandamus petition. According to
Arredondo, this communication occurred before he filed the March 12, 2020 motion
to compel, which sought to enforce the January 6 order. Arredondo set the motion
to compel for hearing on April 6, 2020. Three days before that hearing, Allstate
filed its response to the motion to compel and request for reconsideration of its
motion to quash. The court signed the order granting Arredondo’s motion to compel
on April 27.
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Without expressing an opinion on the justification or alleged fault for any
delay in seeking mandamus relief, we conclude that rejecting Allstate’s petition
based on laches is unwarranted because Arredondo does not assert any detrimental
change in his position due to an unreasonable delay. See Oceanografia, S.A. de C.V.,
494 S.W.3d at 730-31; see also In re Laibe Corp., 307 S.W.3d 314, 318 (Tex. 2010)
(orig. proceeding) (per curiam) (to invoke the equitable doctrine of laches, the
moving party ordinarily must show, among other things, detrimental change in
position because of delay); In re Wagner, 560 S.W.3d 309, 318 (Tex. App.—
Houston [1st Dist.] 2017, orig. proceeding). Under these circumstances, Allstate’s
request for relief is not barred by laches.
B. Scope of Discovery
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). Accordingly, discovery 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); see also In re Xeller, 6 S.W.3d
618, 626 (Tex. App.—Houston [14th Dist.] 1999, orig. proceeding). When
discovery requests exceed these boundaries, trial courts must impose reasonable
discovery limits commensurate with the scope of permissible discovery. See In re
Graco Children’s Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (orig. proceeding)
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(per curiam). A trial court abuses its discretion if it orders discovery beyond that
which the rules of civil procedure permit. In re N. Cypress Med. Ctr. Operating Co.,
559 S.W.3d 128, 130-31 (Tex. 2018) (orig. proceeding).
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). 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. Determining which facts are “of
consequence” to the action necessarily begins with a review of the pleadings. “The
materiality and relevancy of testimony is to be determined by reference to the issues
made by the pleadings.” Compagnie des Metaux Unital v. Victoria Mfg. Co., 107
S.W. 651, 654 (Tex. App. 1908, no writ); see In re Alford Chevrolet-Geo, 997
S.W.2d 173, 180 n.1 (Tex. 1999) (stating that review of relevancy generally done by
“close examination of the pleadings and specific claims and defenses made”); see
also Tex. R. Civ. P. 192.3(a) (party may obtain discovery of matters not privileged
that are relevant to the “subject matter of the pending action”, whether relating to
claims or defenses). Facts that may be of consequence to issues not raised by
pleadings are not permissible areas of discovery. “Discovery undertaken with the
purpose of finding an issue, rather than in support of an issue already raised by the
pleadings, would constitute an impermissible ‘fishing expedition’” under Alford
Chevrolet-Geo. See In re Am. Home Assurance Co., 88 S.W.3d 370, 376 (Tex.
App.—Texarkana 2002, orig. proceeding) (citing Alford Chevrolet-Geo, 997
S.W.2d at 180).
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
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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 § 1952.106). A negligent party is underinsured when the available
proceeds of his liability insurance are insufficient to 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)). 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 underinsured, at-fault third-party motorist under applicable tort law.
Brainard, 216 S.W.3d at 818; In re Liberty Cty. Mut. Ins. Co., 537 S.W.3d 214, 220
(Tex. App.—Houston [1st Dist.] 2017, orig. proceeding). Thus, a UIM insurer’s
contractual duty to pay benefits does not arise until the liability of the other driver
and the amount of damages sustained by the insured are determined. Brainard, 216
S.W.3d at 818. A claim for UIM benefits is not presented until the trial court signs
a judgment resolving these issues. Id.
To recover UIM benefits, a claimant must prove: (1) that the insured has
UIM coverage; (2) that the other driver negligently caused the accident resulting in
the covered damages; (3) the amount of the insured’s damages; and (4) that the other
driver’s insurance coverage is deficient. In re Liberty Cty. Mut. Ins. Co., 557 S.W.3d
851, 856 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding); 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). As these issues
must be resolved before any contractual claim to UIM benefits can mature, discovery
in a UIM dispute such as this one must be tailored only to these pertinent matters.
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C. Abuse of Discretion
Allstate does not contest that, at the time of the accident, Arredondo was
insured under an insurance contract containing UIM coverage, that the policy was
in force and effect, and that the collision constitutes an “accident” under the policy.
The relevant issues, therefore, are narrowed to: (1) the alleged underinsured driver’s
liability for the underlying accident; (2) the existence and amount of the plaintiff’s
damages; and (3) whether the other driver was underinsured. See Liberty Cty. Mut.
Ins. Co., 557 S.W.3d at 856. Allstate has filed a general denial, thereby putting
Arredondo to his burden of proof of these facts.
Citing two Liberty County Mutual Insurance Company cases from our court
and the First Court of Appeals,2 Allstate’s first argument is that the deposition is not
permissible because the only claim is for UIM benefits and its corporate
representative has no relevant testimony on the required elements.
In the First Court of Appeals’ decision, the court conditionally granted
mandamus relief from an order compelling discovery in a UIM case. See Liberty
Cty. Mut. Ins. Co., 537 S.W.3d at 220-22. The claimant served written discovery
inquiring about claims adjustment and handling, and he also sought the deposition
of the company’s claims adjuster. But because the extra-contractual claims had been
severed and abated, the only relevant issues were the underinsured driver’s liability
and status and the claimant’s damages. Id. at 221. As the discovery at issue did not
pertain to those issues but rather concerned matters that would not arise until the
carrier’s contractual duty to pay UIM benefits ripened and was breached, the order
compelling the discovery was an abuse of discretion. Id. Additionally, the court
2
See Liberty Cty. Mut. Ins. Co., 557 S.W.3d at 856; Liberty Cty. Mut. Ins. Co., 537 S.W.3d
at 219-21.
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held it was an abuse to compel the deposition of Liberty Mutual’s claims adjuster
because her only connection to the case was her status as an adjuster who signed the
company’s discovery responses, but she did not possess relevant information. Id.The following year, this court considered a mandamus petition in another
UIM case, coincidentally filed by Liberty Mutual. Liberty Cty. Mut. Ins. Co., 557
S.W.3d at 856. There, the trial court compelled the deposition of the insurer’s
corporate representative on several topics, which included the tortfeasor’s liability
and the plaintiff’s damages but were broad enough to encompass other matters
irrelevant to the underlying UIM claim. Id. at 854-55. Our court conditionally
granted mandamus relief, holding that the order was an abuse of discretion for two
reasons. First, the order was not limited to the relevant topics of the tortfeasor’s
liability and the plaintiff’s damages. Id. at 856. Second, to the extent the deposition
topics pertained to the relevant issues, the record showed that the information sought
through the deposition had already been obtained by the plaintiff or may be obtained
from other sources with less burden and expense. Id. at 856-57. Allstate relies
heavily on these two Liberty County Mutual Insurance Company cases.
The most persuasive case Arredondo cites is In re Garcia, No. 04-07-00173-
CV, 2007 WL 1481897 (Tex. App.—San Antonio May 23, 2007, orig. proceeding)
(mem. op.). There, as here, the claimant settled with an alleged underinsured
tortfeasor and then sued her insurer. In its answer, the defendant, State Farm,
disputed among other things Garcia’s actual damages, including whether the alleged
injuries resulted from the accident. Id. at *2. Garcia noticed the deposition of State
Farm’s corporate representative on several topics, including the facts supporting
State Farm’s legal theories and defenses. Id. State Farm moved to quash the
deposition because the petition stated no claim warranting corporate representative
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testimony. Id. at *1. Alternatively, State Farm moved to limit the deposition’s
scope. Id. The trial court quashed the deposition. On the claimant’s petition for
writ of mandamus, the court of appeals concluded that at least some of the deposition
topics were relevant to the underlying UIM claim, such as the claimant’s damages
and State Farm’s defenses to those damages. Id. at *2. “[I]nformation about State
Farm’s defenses is relevant and properly discoverable, absent a showing of privilege
or some other exemption authorized by the Texas Rules of Civil Procedure.” Id.
The court conditionally granted mandamus relief and ordered the trial court to
withdraw the order quashing the deposition, while also stating that the trial court
could still consider State Farm’s alternate request to limit the deposition’s scope. Id.
at *3.
In this regard, Garcia is consistent with our court’s more recent decision in
yet another Liberty County Mutual Insurance Company case, In re Liberty County
Mutual Insurance Company, 606 S.W.3d 866 (Tex. App.—Houston [14th Dist.]
2020, orig. proceeding). This court denied mandamus relief from an order
compelling the deposition of Liberty County Mutual Insurance Company’s
corporate representative in an uninsured motorist case. In that case, however, the
deposition topics were appropriately limited to the relevant issues in a typical car
wreck case and did not seek information beyond the defendant’s contentions on
liability and damages or the evidence to support those contentions. Id. at 870.
Here, Arredondo has settled with Guzman’s insurance carrier and is
proceeding against his own insurance company, which has by its answer contested
relevant issues pertaining to Guzman’s liability and Arredondo’s damages. As in
this court’s 2020 Liberty County Mutual Insurance Company case, Allstate has not
stipulated that Guzman’s negligence caused Arredondo’s alleged injuries, the
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amount of Arredondo’s damages, or that Guzman was underinsured. See id. at 875.
Arredondo is entitled to discover Allstate’s contentions put into issue by its pleading,
as well as any evidence of which its representative may have personal knowledge in
support of those contentions. See id. at 873-75; Garcia, 2007 WL 1481897, at *2.
Matters pertaining to a pleaded claim or defense are within the scope of permissible
discovery. See Tex. R. Civ. P. 192.3(a).
To the extent the deposition topics at issue permit inquiry into relevant
matters, Allstate argues alternatively that compelling the deposition is clear error
because it is unduly burdensome, and Arredondo may obtain that evidence
elsewhere. See Tex. R. Civ. P. 192.4(a). Courts have agreed that a corporate
representative deposition is unreasonable and unduly burdensome in the UIM
context on the content of a claimant’s records because the claimant has independent
and superior access to his own records. In re Perry, No. 13-18-00676-CV, 2019 WL
1723509, *8 (Tex. App.—Corpus Christi-Edinburg Apr. 18, 2019, orig. proceeding)
(mem. op.); see also Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 222-23; In re Arras,
24 S.W.3d 862, 864 (Tex. App.—El Paso 2000, orig. proceeding). Indeed, this court
relied on similar reasoning in our 2018 Liberty County Mutual Insurance Company
case. Liberty Cty. Mut. Ins. Co., 557 S.W.3d at 856-57. In that case, however, the
insurer asserted the argument in the trial court and developed a record to support it.
Id. Here, in contrast, Allstate did not argue in the trial court that the deposition
should be quashed or limited based on similar grounds and did not develop a record
demonstrating that the relevant information sought by the deposition is already
known by Arredondo, has already been obtained, or is obtainable through more
convenient, less burdensome, or less expensive means. Cf. id. at 857; Garcia, 2007
WL 1481897, at *2. We cannot grant mandamus relief based on an argument that
Allstate did not first present in the trial court. See In re Prodigy Servs., LLC, No.
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14-14-00248-CV, 2014 WL 2936928, at *4 (Tex. App.―Houston [14th Dist.] June
26, 2014, orig. proceeding) (mem. op.) (holding relator waived objection that
discovery requests were overly broad and unduly burdensome by failing to object in
the trial court).
We agree with Allstate that its representative would not have first-hand
personal knowledge of the accident’s circumstances or Arredondo’s alleged injuries.
See Liberty Cty. Mut. Ins. Co., 557 S.W.3d at 856. However, Arredondo is entitled
to discover Allstate’s defensive contentions raised by its pleadings and the evidence
upon which it relies to support them, such as requested by topics 1, 8, and 10.3 See
id. at 857; Garcia, 2007 WL 1481897, at *2; Tex. R. Civ. P. 192.3(a). If its
representative lacks personal knowledge of a particular inquiry, nothing about our
opinion precludes the deponent from saying so.
Though Arredondo may take Allstate’s deposition, we also conclude that
some matters encompassed by the noticed topics are clearly beyond the scope of
relevant discovery to which a UIM claimant is entitled under these circumstances.
In this regard, the order is an abuse of discretion because it is not limited to the
relevant topics of the tortfeasor’s liability and the plaintiff’s damages. See Liberty
Cty. Mut. Ins. Co., 557 S.W.3d at 856. For example, topics 5, 6, 7, 11, and 12 address
the investigation of Arredondo’s claim, the reasons for denying or limiting
Arredondo’s claim, Allstate’s investigation of the tortfeasor, Allstate’s process of
determining liability and the amount of damages in this claim, and settlement
negotiations in this case. These requests concern the handling of Arredondo’s claim.
But Arredondo has not pleaded any extra-contractual claims. Allstate raised this
3
In this court, Allstate contends topic 8 is harassing, but it did not assert that argument
below so we do not consider it.
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argument in its motion to quash, and Arredondo did not respond to that point and
has since acknowledged that he is not seeking discovery on claims-handling matters.
Therefore, these topics are outside the scope of permissible discovery related to
pending claims or defenses. See Tex. R. Evid. 401. The trial court abused its
discretion by compelling a corporate representative deposition on those topics. See
N. Cypress Med. Ctr. Operating Co., 559 S.W.3d at 130-31 (stating that trial court
abuses its discretion if it orders discovery that exceeds what rules of civil procedure
permit); Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 221.
Similarly, topics 2, 3, and 4 address the validity and “specifics” of the policy
sold to Arredondo, his rights under the policy, and the requirements for coverage
and payment under the policy. Allstate has conceded the policy’s validity and the
only matters presently at issue are Guzman’s liability for the accident, Arredondo’s
damages, and whether Guzman’s insurance coverage was deficient. See Liberty Cty.
Mut. Ins. Co., 557 S.W.3d at 856. A UIM insurer has no contractual duty to pay
benefits until these issues are determined. Brainard, 216 S.W.3d at 818.
Compelling Allstate’s corporate representative testimony on these topics, at this
time, is an abuse of discretion.
Further, topic 9 addresses “possible defenses not yet raised” in Allstate’s
pleadings. In its mandamus petition, Allstate argues that topic 9 invades the work
product privilege, a ground Allstate asserted in trial court.4 Work product includes
“material prepared or mental impressions developed” by Allstate and its counsel.
Tex. R. Civ. P. 192.5(a)(1). Topic 9 clearly falls into this category and is protected
work product. Its degree of protection depends on whether it is core work product.
4
For purposes of the rules, “an assertion that material or information is work product is an
assertion of privilege.” Tex. R. Civ. P. 192.5(d).
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“Core” work product is an attorney’s work product containing the attorney’s mental
impressions, opinions, conclusions, or legal theories. Id. 192.5(b)(1). It is
absolutely privileged and not discoverable: “Core work product is sacrosanct and
its protection impermeable.” In re Bexar Cty. Crim. Dist. Atty’s Office, 224 S.W.3d
182, 187-88 (Tex. 2007) (orig. proceeding). Because topic 9, as worded, is broad
enough to include the mental impressions of Allstate’s counsel, it seeks to discover
core work product. But Arredondo is not entitled to a preview of what theories or
defenses Allstate’s counsel may or may not be considering as part of Allstate’s
litigation strategy. See In re AEP Tex. Cent. Co., 128 S.W.3d 687, 692 (Tex. App.—
San Antonio 2003, orig. proceeding) (holding attorney memorandum analyzing
potential claims contained attorney’s mental impressions, opinions, and legal
theories and was protected by work-product privilege).
Any work product other than core work product is discoverable only upon a
showing that the party seeking it has substantial need of the material and “is unable
without undue hardship to obtain the substantial equivalent of the material by other
means.” Tex. R. Civ. P. 192.5(b)(2). Arredondo, as the party seeking Allstate’s
corporate representative’s mental impressions, opinions, and theories about possible
defenses not yet pleaded, “bears a heavy burden” to show that he has a “substantial
need” for the work product and he “is unable without undue hardship to obtain the
substantial equivalent of the material by other means.” See Bexar Cty. Crim. Dist.
Atty’s Office, 224 S.W.3d at 188 (quoting Tex. R. Civ. P. 192.5(b)(2)). Arredondo
has not argued that he has a “substantial need” for the requested information for
purposes of proving his damages and Guzman’s liability and, therefore, he has not
met his burden to compel deposition testimony about Allstate’s corporate
representative’s work product.
17
Moreover, seeking discovery on matters not yet raised by the pleadings is an
impermissible fishing expedition. See Am. Home Assurance Co., 88 S.W.3d at 376.
Arredondo may discover Allstate’s contentions raised by the pleadings, but not any
contentions Allstate has considered but not raised in its pleadings.
In sum, because Allstate’s contractual obligations do not ripen until after the
issues of Guzman’s liability, Arredondo’s damages, and underinsured status have
been determined, topics 2-7, 11, and 12 are irrelevant to the current claim. See
Liberty Cty. Mut. Ins. Co., 557 S.W.3d at 856; Liberty Cty. Mut. Ins. Co., 537 S.W.3d
at 221. And topic 9 is protected work product. A UIM insurer is not required to
incur litigation expense on these issues because they may be rendered moot by the
resolution of the underlying accident. Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 221.
We have concluded that the trial court did not abuse its discretion in
compelling a corporate representative’s deposition confined to the issues identified
above. But we have further concluded that the trial court abused its discretion in
refusing to narrowly focus the deposition’s scope to the facts Arredondo must prove
and Allstate’s contentions in defense of those facts. We further determine that
Allstate lacks an adequate remedy by ordinary appeal. See Liberty Cty. Mut. Ins.
Co., 557 S.W.3d at 857-58; see also Liberty Cty. Mut. Ins. Co., 537 S.W.3d at 223;
In re Houstonian Campus, L.L.C., 312 S.W.3d 178, 183 (Tex. App.—Houston [14th
Dist.] 2010, orig. proceeding).
Conclusion
Accordingly, we deny in part and conditionally grant in part Allstate’s petition
for writ of mandamus. We direct the trial court to issue a written order vacating its
January 6, 2020 and April 27, 2020 orders. We further order the trial court to issue
a new order granting Arredondo’s motion to compel in part and granting Allstate’s
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motion to quash in part, limited to the subject matter as set forth in this opinion,
unless the parties reach an agreement that makes a new order compelling the
deposition unnecessary. We are confident the trial court will act in accordance with
this opinion and the writ will issue only if the court fails to do so. Our June 19, 2020
stay order is lifted.
/s/ Kevin Jewell
Justice
Panel consists of Chief Justice Christopher and Justices Jewell and Hassan. (Hassan,
J., dissenting).
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