Opinion
No. 05-20-00259-CV
05-19-2020
IN RE GEICO COUNTY MUTUAL INSURANCE COMPANY, Relator
Original Proceeding from the County Court at Law No. 1 Dallas County, Texas
Trial Court Cause No. CC-19-02906-A
MEMORANDUM OPINION
Before Chief Justice Burns, Justice Osborne, and Justice Reichek
Opinion by Justice Osborne
The trial court denied relator GEICO County Mutual Insurance Company's motion to quash a deposition notice and subpoena duces tecum and for a protective order. Because the notice and subpoena seek testimony and evidence regarding real party in interest Walter Keith Payne's uninsured or underinsured motorist coverage—a matter that has not been pleaded—we conditionally grant the relief requested in part. GEICO has not shown it is entitled to mandamus relief, however, regarding other matters sought by the notice and subpoena. Accordingly, we deny GEICO's request in part.
BACKGROUND
Adam James Ray rear-ended Payne in a 2017 automobile collision on LBJ Freeway. Payne was injured and sued Ray, but Ray did not appear or answer the lawsuit. Payne obtained a default judgment against Ray and now seeks to recover the amount of the judgment from relator GEICO, Ray's liability insurance carrier. Payne has pleaded causes of action for breach of contract, negligence, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act. Payne alleges that when he obtained a final judgment against Ray for damages, he became a third-party beneficiary under Ray's policy.
Payne's own insurance includes a policy providing uninsured or underinsured motorist ("UM/UIM") coverage. GEICO or a related entity is also Payne's insurer under that policy. Payne has not, however, alleged any claims against GEICO under that policy in this lawsuit. In his response to GEICO's mandamus petition, Payne concedes that he has "presented and settled his UM claim" and that he "is not seeking UM/UIM benefits in this case."
Payne served a notice to depose a GEICO representative with a subpoena duces tecum, requesting information on both Ray's liability coverage and Payne's own UM/UIM coverage. GEICO filed a motion to quash the notice and for a protective order. The trial court denied GEICO's motion by order dated February 14, 2020. GEICO contends it is entitled to mandamus relief because the trial court abused its discretion in denying its motion as to both Ray's liability coverage and Payne's UM/UIM coverage.
MANDAMUS RELIEF
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 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 Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (per curiam) (orig. proceeding).
A discovery order that compels production beyond the rules of procedure is an abuse of discretion for which mandamus is the proper remedy. In re Nat'l Lloyds Ins. Co., 507 S.W.3d 219, 223 (Tex. 2016) (per curiam) (orig. proceeding). In In re National Lloyds Insurance Co., the court explained:
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. What is relevant to the subject matter is to be broadly construed. These liberal bounds, however, have limits, and discovery requests must not be overbroad. A request is not overbroad so long as it is reasonably tailored to include only matters relevant to the case.Id. at 223-24 (quotations and citations omitted).
Although the scope of discovery is generally within the trial court's discretion, the trial court must impose reasonable discovery limits. In re Graco Children's Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (per curiam) (orig. proceeding). Discovery requests—including depositions—must be reasonably tailored to include only matters relevant to the case. In re Liberty Cty. Mut. Ins. Co., 557 S.W.3d 851, 855 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding) (citing In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex. 1998) (per curiam) (orig. proceeding)). Information is relevant if it tends to make the existence of any fact that is of consequence to the determination of the action or defense more or less probable than it would be without such information. See TEX. R. EVID. 401.
DISCOVERY OF PAYNE'S UM/UIM COVERAGE
GEICO contends that Payne's requested discovery regarding his own claim on his own policy "is wholly irrelevant and beyond the scope of this lawsuit." GEICO argues that Payne has filed suit against GEICO as Ray's insurer under Ray's liability coverage, not as Payne's insurer under Payne's UM/UIM coverage.
Although Payne concedes that he is not asserting a claim for UM/UIM benefits in this case, he argues the information may be relevant because the same GEICO entity may be the insurer under both his UM/UIM policy and Ray's liability policy. He also contends his "UM/UIM representative may have information regarding the status of the liability coverage." He relies on a January 10, 2019 letter from his UM/UIM claims representative, arguing the letter "suggested" that his UM/UIM adjuster "made an inquiry with regard to the status of Ray's liability coverage." He argues that "[b]ased on that inquiry, the UM representative decided to handle Plaintiff's claim as an under-insured motorist claim," and "[t]o the extent the UM/UIM representative made an inquiry or investigated the status or availability of the liability coverage, that information may be relevant to a determination of liability coverage in this case." The letter in question is to Payne's attorney from Kelly Moreno in GEICO's Claims Department. Its first paragraph reads as follows:
We have received your demand for settlement of your client's Uninsured Bodily Injury claim. If the tort carrier has denied or disclaimed coverage, please send a copy of the denial/disclaimer letter. It is my understanding that there is coverage available from the tort insurance carrier. Please provide the applicable limits or declaration page so that we can apply the appropriate offset allowed under the Underinsured Motorist Coverage.The remainder of the letter is a request for Payne's medical records.
We conclude the trial court abused its discretion in permitting discovery relating to Payne's UM/UIM insurance coverage. Payne has expressly conceded that his coverage under his UM/UIM insurance policy is not at issue in this case. His sole claim is under Ray's liability policy. Consequently, discovery relating to Payne's UM/UIM coverage does not relate to any claim or defense of either party to this lawsuit. Discovery requests must be reasonably tailored to include only matters relevant to the case, In re Alford Chevrolet-Geo, 997 S.W.2d 173, 180 (Tex. 1999) (orig. proceeding), and "[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) (per curiam) (orig. proceeding).
Discovery relating to Payne's UM/UIM coverage is not relevant to any claim Payne asserts against GEICO in this lawsuit. Consequently, the portion of the trial court's order compelling discovery relating to Payne's UM/UIM coverage is an abuse of discretion, and GEICO is entitled to mandamus relief to that extent. See In re Nat'l Lloyds Ins. Co., 507 S.W.3d at 226. We also conclude there is no adequate remedy by appeal. See In re CSX Corp., 124 S.W.3d 149, 153 (Tex. 2003) (per curiam) (orig. proceeding) (where discovery order compels production of "patently irrelevant or duplicative documents" there is no adequate remedy by appeal because the order "imposes a burden on the producing party far out of proportion to any benefit that may obtain to the requesting party") (internal quotations and citation omitted).
DISCOVERY OF RAY'S LIABILITY COVERAGE
We reach a different conclusion regarding Payne's requested discovery of Ray's liability coverage. GEICO contends that because Payne's claims under Ray's liability coverage fail as a matter of law, Payne is not entitled to discovery on them. GEICO argues that because Payne has not established a condition precedent—that Ray gave GEICO the notice required under his policy—Payne cannot recover on his claims. GEICO also argues it is not liable as a matter of law on Payne's extra-contractual claims, so discovery on them is improper.
Payne responds that "[a]lthough proof of a condition precedent may be required before liability is ultimately imposed," it is not a prerequisite to obtaining discovery on his claims. We agree. A party may obtain discovery of non-privileged matters that are relevant to the subject matter of the pending action. TEX. R. CIV. P. 192.3. Information is relevant if it relates to the claim or defense of the party seeking discovery. In re Ten Hagen Excavating, Inc., 435 S.W.3d 859, 868 (Tex. App.—Dallas 2014, orig. proceeding) (citing TEX. R. CIV. P. 192.3(a)). Payne's claims against GEICO arise from GEICO's alleged liability under Ray's policy. Consequently, Payne's discovery requests relating to Ray's policy are relevant, and the trial court did not abuse its discretion in denying the portion of GEICO's motion directed to those requests. See In re Graco Children's Prods., Inc., 210 S.W.3d at 600 (scope of discovery is generally within trial court's discretion, but trial court must impose reasonable discovery limits).
CONCLUSION
GEICO has shown its entitlement to mandamus relief in part. Accordingly, we conditionally grant GEICO's petition for writ of mandamus in part and direct the trial court to vacate the portion of its February 14, 2020 order compelling discovery regarding Payne's UM/UIM insurance coverage.
The writ will issue only in the event that the trial court fails to comply within thirty days of the date of this opinion.
/Leslie Osborne/
LESLIE OSBORNE
JUSTICE 200259F.P05