In Re Bertha Arce, Relator v. the State of Texas

Court of Appeals of Texas·Decided January 31, 2025·No. 07-24-00185-CV·Published

Opinion

In The

Court of Appeals

Seventh District of Texas at Amarillo

No. 07-24-00185-CV

IN RE BERTHA ARCE, RELATOR

Original Proceeding

Arising From Proceedings Before the 46th District Court Hardeman County, Texas

Trial Court No. 11529, Honorable Cornell Curtis, Presiding

January 31, 2025

DISSENTING OPINION

Before PARKER and DOSS and YARBROUGH, JJ.

While I concur with much of the majority’s thoughtful analysis, I part ways on two critical points. First, requiring Relator to return to the trial court for reconsideration—when she has already done so once—imposes an unnecessary procedural burden that serves no meaningful purpose. Second, and perhaps more fundamentally, I cannot agree that an appeal provides an adequate remedy under these circumstances. The practical implications of forcing Relator to wait for the appellate process would effectively deny her the very relief she seeks.

Despite the involvement of a potential class action, this original proceeding at its core is simply a discovery dispute in which the responding party lodged a series of “boilerplate” objections and then failed to present any supporting evidence. Accordingly, this original proceeding asks us to determine if the trial court abused its discretion in denying Relator, Bertha Arce, discovery related to her pending motion for class certification. The trial court partially granted Arce’s motion to compel discovery from real party in interest, American National Insurance Company (“ANIC”) and ordered restricted discovery. Arce complains of the trial court’s discovery order and claims the trial court abused its discretion as follows: (1) by precluding or unreasonably limiting the class certification discovery; (2) by refusing to overrule the objections to the discovery requests and compelling responses; (3) by depriving her of class certification discovery that goes to the “heart” of her claims and class certification; (4) the trial court’s order impermissibly vitiates her opportunity to present a viable motion for class certification; and (5) the trial court’s order entitles her to mandamus relief. Because I conclude the trial court abused its discretion, I would conditionally grant the petition.

Before she is entitled to mandamus relief, Arce must also demonstrate she has no adequate remedy by appeal. ANIC argues Arce has an adequate remedy because she is entitled to an interlocutory appeal in case her pending motion for class certification is denied. Arce responds, without the discovery she requested, including the claim files which demonstrate whether the commonality and typicality of claims for the proposed class exists, she is certain to be unable to prove the four requirements for certification under Rule 42. She also urges she would have an inadequate remedy by appeal because

the discovery will not be part of the record and therefore unreviewable by this Court. The majority agrees with ANIC; I agree with Arce.

Parties are “entitled to full, fair discovery” and to have their cases decided on the merits. Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009) (citing Able Supply Co. v. Moye, 898 S.W.2d 766, 773 (Tex. 1995) (orig. proceeding)). When the denial of discovery prohibits a party from effectively preparing for trial, “[her] remedy by appeal is of doubtful value.” In re K & L Auto Crushers, LLC, 627 S.W.3d 239, 256 (Tex. 2021) (quoting Garcia v. Peeples, 734 S.W.2d 343, 345 (Tex. 1987) (orig. proceeding)). See also Walker v. Packer, 827 S.W.2d 833, 843 (Tex. 1992) (orig. proceeding) (“[A]n appeal will not be an adequate remedy where the party’s ability to present a viable claim or defense at trial is vitiated or severely compromised by the trial court’s discovery error.”); accord Able Supply Co., 898 S.W.2d at 770–71 (trial court abused its discretion in failing to compel answer to interrogatory without objection from responding party in mass products liability case). Forcing Arce to move forward with her motion for class certification without permitting her to conduct adequate discovery prevents her from assessing the typicality or commonality of claims of the proposed class—because the denied discovery is not part of the record, and the Court would also not be able to review the effect of the denial of discovery on appeal. Under these circumstances, Arce does not have an adequate remedy by appeal. Accordingly, I respectfully dissent.

BACKGROUND

In January 2017, ANIC issued a life insurance policy to Bertha Arce’s son, Sergio Arce, Jr., a month after he completed an application with one of its agents outside a motorcycle shop. The policy named Sergio’s mother as the beneficiary. Unfortunately,

Sergio died in a car accident thirteen days after the policy was issued. Bertha Arce filed a claim with ANIC for benefits under the life insurance policy, but ANIC denied the claim and stated in a letter the reason for the denial was “misrepresentation.” On his application for life insurance, Sergio had answered “no” to a question asking if he had been diagnosed with hepatitis C in the past ten years, but ANIC’s review of his medical records revealed he had in fact been diagnosed with hepatitis three years before his application. The denial letter claimed, under its guidelines, ANIC would not have issued the policy had it been aware of Sergio’s medical information.1 Arce originally filed suit against ANIC for breach of contract for failure to pay the policy benefits. Arce later amended her petition to assert a class action.

In the first act of the ensuing litigation, ANIC moved for summary judgment based on Sergio’s answer to the hepatitis question on his application. According to ANIC, a discrepancy between an insured’s application and his medical records was sufficient evidence of “misrepresentation.” It argued the Texas Insurance Code displaced the common law requirement of proof of intent to deceive, known as scienter, and a discrepancy between an insured’s application and his medical records sufficiently proved “misrepresentation.” The trial court agreed and granted summary judgment. Arce appealed to this Court, and we reversed, finding the Insurance Code did not displace the common law requirements. ANIC appealed our decision to the Texas Supreme Court, which affirmed our holding the common law elements of misrepresentation still apply, and the case was remanded to the trial court for further proceedings. Arce v. Am. Nat’l Ins.

1 As part of the application, Sergio gave ANIC permission to access his medical records, which is

how ANIC was able to perform the review upon the filing of the claim by Arce. There is no indication it did this in the intervening month before issuing the insurance policy.

Co., 633 S.W.3d 228, 230 (Tex. App.—Amarillo 2021), rev’d in part, aff’d in part, jdmt. entered in part, 672 S.W.3d 347 (Tex. 2023).2

On remand and after conducting preliminary depositions and discovery, Arce determined ANIC potentially engaged in a pattern or practice of denying life insurance claims based solely on discrepancies between the medical records and applications of deceased insureds. She requested discovery from ANIC related to class certification, contemplating a class action for injunctive and declaratory relief.3 Arce served twenty- four interrogatories and twenty-eight requests for production based on her class certification discovery. ANIC responded only to one interrogatory stating there were over 650 claims it identified in the aggregate amount of $18 million since 2008 which were denied for misrepresentation. It refused to provide any other information or produce any documents, instead asserting several objections and privileges to each request. Arce filed a motion to compel after the parties were unable to resolve their discovery disagreements.

After holding a hearing on Arce’s motion to compel, the trial court issued an order partially granting Arce’s motion. Although compelling responses from ANIC, the order restricted the scope of Arce’s discovery in the following ways:

Free access — add to your briefcase to read the full text and ask questions with AI

In Re Bertha Arce, Relator v. the State of Texas, (Tex. Ct. App. 2025).

In Re Bertha Arce, Relator v. the State of Texas (In Re Bertha Arce, Relator v. the State of Texas) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Citizens Insurance Co. of America v. Daccach
217 S.W.3d 430 (Texas Supreme Court, 2007)
In Re Allstate County Mutual Insurance Co.
227 S.W.3d 667 (Texas Supreme Court, 2007)
Ford Motor Co. v. Castillo
279 S.W.3d 656 (Texas Supreme Court, 2009)
In Re Union Pacific Resources Co.
22 S.W.3d 338 (Texas Supreme Court, 2000)
In Re Alford Chevrolet-Geo
997 S.W.2d 173 (Texas Supreme Court, 1999)
Walker v. Packer
827 S.W.2d 833 (Texas Supreme Court, 1992)
Garcia v. Peeples
734 S.W.2d 343 (Texas Supreme Court, 1987)
Able Supply Co. v. Moye
898 S.W.2d 766 (Texas Supreme Court, 1995)
Texaco, Inc. v. Sanderson
898 S.W.2d 813 (Texas Supreme Court, 1995)
Chamberlain v. Cherry
818 S.W.2d 201 (Court of Appeals of Texas, 1991)
in Re National Lloyds Insurance Company
449 S.W.3d 486 (Texas Supreme Court, 2014)
in Re National Lloyds Insurance Company
507 S.W.3d 219 (Texas Supreme Court, 2016)
in Re State Farm Lloyds
520 S.W.3d 595 (Texas Supreme Court, 2017)
In re Shipman
540 S.W.3d 562 (Texas Supreme Court, 2018)