Allstate Texas Lloyds v. Johnson

784 S.W.2d 100, 1989 Tex. App. LEXIS 3218, 1989 WL 165087
CourtCourt of Appeals of Texas
DecidedDecember 21, 1989
DocketNo. 10-89-229-CV
StatusPublished

This text of 784 S.W.2d 100 (Allstate Texas Lloyds v. Johnson) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allstate Texas Lloyds v. Johnson, 784 S.W.2d 100, 1989 Tex. App. LEXIS 3218, 1989 WL 165087 (Tex. Ct. App. 1989).

Opinion

OPINION

MEANS, Justice.

I. FACTUAL BACKGROUND

Rebecca Hamilton’s house burned to the ground on September 5, 1988. Her home was insured against fire loss by Allstate Texas Lloyds (“Allstate”). Ron O’Brien, Allstate’s adjuster, investigated the fire beginning the next day and, after calling in expert assistance, concluded that the fire was the work of an arsonist.

On or about September 21, O’Brien communicated his findings to his employer along with his prediction that Hamilton would sue Allstate if it refused to pay her under the policy. He proved prophetic. Allstate formally denied Hamilton’s claim on January 12, 1989, and, on June 19 Allstate was served with her citation. Allstate answered, asserting arson as a defense, and counterclaimed for the money it had previously paid the mortgagee.

Discovery began in July when Allstate served interrogatories and requests for production of documents on Hamilton. In turn, Hamilton “noticed” the deposition of Allstate for August 28. The notice, following Rule 201.4, directed Allstate to designate the person or persons to testify in its behalf and the matters upon which each person designated would testify. See TEX. R.CIV.P. 201.4.

Allstate produced O’Brien in response to Hamilton’s deposition notice but not before it filed its objections to the duces tecum which came attached. Along with its objections Allstate filed a request for a protective order or, in the alternative, an in-camera inspection to determine the discovera-bility of the documents in question.

Allstate objected to three of the twelve categories of documents requested by Hamilton. It based its objections on attorney-client privilege, the privilege for attorney work product, the party communications privilege, and the privilege for witness statements.

At O’Brien’s deposition, counsel for Allstate repeatedly objected to questions posed to him by Hamilton’s counsel relating to what Allstate knew or what facts Allstate had in its possession. Further, she instructed O’Brien either to not answer or to limit his answers to matters of which he had personal knowledge or of which Allstate had knowledge prior to September 21, 1988, the date on which Allstate contends it first anticipated litigation would ensue.

Hamilton responded to Allstate’s objections at O’Brien’s deposition by filing a motion for sanctions. By it she asked the court to prohibit all further discovery of any kind by Allstate, to strike Allstate’s pleadings, to render judgment by default, to charge Allstate with all discovery costs, and to require Allstate to pay her attorney’s fees.

The court heard Hamilton’s motion for sanctions simultaneously with Allstate’s motion for a protective order. Hamilton’s counsel read into the record portions of O’Brien’s deposition to show the questions to which Allstate objected and the instructions from Allstate’s counsel to O’Brien not to answer or to limit his answers. Allstate offered little in defense of its behavior at deposition—only a restatement by counsel of its position and rather global affidavit by Ron O’Brien supporting Allstate’s position that its privileges under Rule 166b.3. attached on September 21.

[102]*102At the conclusion of the hearing, the court denied Allstate’s request for a protective order and refused to conduct an in-camera inspection of the contested documents. As sanctions for Allstate’s deposition behavior, the court struck all of Allstate’s pleadings, prohibited Allstate from engaging in any further discovery, and ordered Allstate to pay Hamilton the cost of O’Brien’s deposition. Allstate is now before us requesting a writ of mandamus (1) directing the Honorable Derwood Johnson, Judge of the 74th Judicial District Court, to vacate his order granting Hamilton’s motion for sanctions and (2) instructing him to grant Allstate’s request for a protective order or to perform an in-camera inspection of the documents.

II. DECISION

Allstate was allowed to file its petition for writ of mandamus in this court on the strength of assertions that it was the victim of abuse of discretion by the trial court, and that it was in danger of irremediable exposure of its privileged documents and communications. Since granting leave, our primary focus has been upon the nature and extent of Allstate’s claims of privilege, how those claims were advanced, and whether and how the claimed privileges have been threatened with violation by Hamilton and the trial court.

To prevent forced disclosure of privileged communications and documents, we were prepared to grant mandamus even in the face of Street v. Second Court of Appeals, 715 S.W.2d 638 (Tex.1986), Stringer v. Eleventh Court of Appeals, 720 S.W.2d 801 (Tex.1986), and Wal-Mart Stores, Inc v. Street, 761 S.W.2d 587 (Tex.App.—Fort Worth 1988, mand. overr.), which together can be read to designate appeal as the exclusive remedy for a trial court’s abuse of discretion in imposition of sanctions. We would have done so believing that the supreme court, in promulgating Rule 215 and in deciding Street and Stringer, did not intend to require that sanctions which are imposed in an abuse of discretion and which deny the sanctioned party discovery rights or expose privileged information, could only be challenged by the remedy— inadequate in those situations—of appeal. See TEX.R.CIV.P. 215; Cf. Jampole v. Touchy, 673 S.W.2d 569, 576 (Tex.1984) (granting mandamus against improper denial of discovery); Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434, 439 (1959) (granting mandamus against improper exposure of privileged information).

However, after thorough examination of every exhibit and painstaking review of every brief, we deny the writ because we believe that the trial court did not abuse its discretion in sanctioning Allstate monetarily and by disallowing further discovery. Further, that if the court abused its discretion in striking Allstate’s pleadings, an adequate remedy by appeal is available to it. Under these circumstances, neither is there any need to order the trial court to conduct an in-camera inspection of the contested documents.

III. HOLDING

A writ of mandamus is not appropriate to correct alleged trial court error pen-dente lite unless, first, a clear abuse of discretion is shown and, second, there is no adequate remedy by appeal. See Jampole v. Touchy, 673 S.W.2d 569, 572-73 (Tex.1984). The standard is no different where the alleged error concerns imposition of sanctions. See Bosnich v. National Cellulose Corp., 676 S.W.2d 446, 447 (Tex.App.—Houston [1st Dist.] 1984, no writ). The test for abuse of discretion is whether the court acted without reference to any guiding rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238

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Bluebook (online)
784 S.W.2d 100, 1989 Tex. App. LEXIS 3218, 1989 WL 165087, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allstate-texas-lloyds-v-johnson-texapp-1989.