American Home Assurance Co. v. Cooper

786 S.W.2d 769, 1990 WL 6760
CourtCourt of Appeals of Texas
DecidedFebruary 28, 1990
Docket08-89-00401-CV
StatusPublished
Cited by7 cases

This text of 786 S.W.2d 769 (American Home Assurance Co. v. Cooper) 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
American Home Assurance Co. v. Cooper, 786 S.W.2d 769, 1990 WL 6760 (Tex. Ct. App. 1990).

Opinions

OPINION

KOEHLER, Justice.

American Home Assurance Company, Relator, seeks mandamus relief from a pretrial discovery order issued by the Respondent judge upon the overruling of Relator’s motion for a protective order and the granting of a motion to compel in favor of Relator’s opponent in the trial court. We decline to issue the writ.

The challenged order was issued in American Home Assurance Company v. Nancy Ann Labbe Walker, Andrew Maier Walker and Argonaut Midwest Insurance Company, Cause No. 87-3451, on the docket of Respondent’s court. This is one of seven suits variously arising out of a collision in which defendant below, Nancy Walker, was injured and her husband was killed. The two were working as a truck driving team at the time of the accident. Workers’ compensation claims were filed with the Industrial Accident Board (IAB) for both Nancy Walker’s disability arising from her personal injuries and for statutory death benefits due under her husband’s coverage. A disputed issue immediately arose as to their employment status at the time of the accident: Were the Walkers independent contractors, employees of Bekins Van Lines (compensation coverage by Argonaut), employees of Electronic Data Carriers (a Bekins subsidiary covered by Relator) or employees of both companies?

The injuries and death occurred on May 16, 1985. The alleged employers were given timely notice of injury, and timely claims were filed with the IAB indicating the employer conflict and listing both companies. Electronic Data Carriers was contacted by telephone on May 28, 1985, by the attorney hired by Nancy Walker to pursue both claims. Electronic Data notified Relator, who in turn assigned the case to an independent adjusting firm, Crawford & Company. The case was specifically assigned to Crawford’s claims adjuster in El Paso. On May 31, 1985, Walker’s attorney sent a letter to Electronic Data confirming his representation of the Walker claims, requesting certain information and formally advising the company of the assertion that the Walkers were injured in the course and scope of employment. A copy of the letter was forwarded to the adjuster and included in his investigation file. A primary thrust of the adjuster’s investigation was aimed at a determination of which company, if either, was the actual employer of the Walkers at the time of the accident. The adjuster was personally convinced that litigation would ensue and consulted outside legal counsel on the employer issue. The IAB was advised of the claims by a letter dated June 18, 1985 from Walker’s attorney. This letter indicated the prospective conflict over the employer issue and identified both Bekins and Electronic Data as employers.

At the end of June 1985, Nancy Walker brought suit in the 55th District Court of Harris County against the driver involved in the collision. Relator intervened in that suit to preserve any subrogation right, con[771]*771tingent upon the outcome of the compensation claims.

The IAB issued its award in the death benefits case on March 11,1987, in which it found that Mr. Walker was employed by both companies and held Argonaut and Relator jointly and severally liable for the statutory death benefits accruing to his surviving wife and their minor son. Both carriers appealed the IAB decision. This mandamus arises out of the appeal by Relator. Of the other six suits arising out of the accident, the only one which has possible relevance to this mandamus is a civil suit by Nancy Walker, individually and on behalf of her husband’s estate, against Argonaut, American Home, Bekins and Electronic Data, asserting violations of the DTPA and the Insurance Code by engaging in bad faith litigation of the compensation claim, filed and pending in the 41st District Court of El Paso County, Cause No. 87-4529.

As defendants in the appeal by Relator, the Walkers sought discovery of the adjuster’s entire investigation file. Relator agreed to furnish any portions which were ultimately provided to the IAB or any health care providers, but otherwise resisted, claiming a privilege under Tex.R.Civ.P. 166b, subds. 3(a), 3(c) and 3(d). The “investigation in anticipation of litigation” privilege is asserted by relator for all materials generated after May 31, 1985, the date of the letter of Walker’s attorney to Electronic Data. In support of its opposition to the discovery and claim of privilege, Relator submitted a lengthy affidavit of the claims adjuster setting forth in detail the factual background of the accident, his investigation and the reasons why his investigation file should be privileged. Walker responded to Relator’s objections with motions for sanctions and to compel. Hearings on the discovery motions were conducted on October 5 and December 6, 1989. While the Relator made references at both hearings to a tender of its investigation file to the judge for an in camera examination for a determination of what portions might be privileged, the references were somewhat tentative and equivocal: “I have all of that and I'm ready to tender it to you to look at, but clearly....” “We would be willing to have an in camera inspection if Your Hon- or thought we needed to have one, but we don’t think that is even necessary because we don’t think the claim’s [sic] file is dis-coverable_” The option of an in camera examination was not further pursued by either party or by the trial judge. On December 7, 1989, the judge signed an order denying Relator’s objection and claim of privilege and ordered it to produce its entire adjuster’s file up to the filing date of its notice of intent to appeal the IAB award.

In discovery matters, a limited privilege from disclosure exists for certain investigatory materials, such as witness statements and communications between parties, made subsequent to the occurrence of the event giving rise to the lawsuit “and in anticipation of the prosecution or defense of the claims made a part of the pending litigation.” Tex.R.Civ.P. 166b(3)(d). Any such investigation carried out after the commencement of litigation obviously would be privileged. However, the commencement and prosecution of a claim before the IAB does not, by itself, constitute litigation. Flores v. Fourth Court of Appeals, 777 S.W.2d 38, 40 (Tex.1989). A valid investigation privilege does not require the actual filing of a lawsuit, as long as good cause existed to believe that such suit would be filed. Stringer v. Eleventh Court of Appeals, 720 S.W.2d 801, 802 (Tex.1986); Turbodyne Corporation v. Heard, 720 S.W.2d 802, 804 (Tex.1986); Phelps Dodge Refining Corporation v. Marsh, 733 S.W.2d 359, 361 (Tex.App.—El Paso 1987, no writ). In determining whether good cause existed to anticipate litigation so that any investigation conducted from that time forward would be privileged, a two-part analysis is required: First, an objective examination of the outward manifestations which indicate litigation is imminent, and second, a subjective determination of whether the party resisting discovery had a good faith belief that litigation would follow. Flores, 777 S.W.2d at 40-44.

Past experiences or statistical probabilities arising from previous cases involving [772]*772similar claims, claimants or injuries does not amount to good cause.

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American Home Assurance Co. v. Cooper
786 S.W.2d 769 (Court of Appeals of Texas, 1990)

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Bluebook (online)
786 S.W.2d 769, 1990 WL 6760, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-home-assurance-co-v-cooper-texapp-1990.