in Re Interinsurance Exchange of the Automobile Club

• Court: Court of Appeals of Texas
• Decided: January 12, 2016
• Docket: 01-14-00979-CV
• Status: Published

Opinion

Opinion issued January 12, 2016

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-14-00979-CV ——————————— IN RE INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB, Relator

Original Proceeding on Petition for Writ of Mandamus

MEMORANDUM OPINION1

In this original proceeding, Relator Interinsurance Exchange of the

Automobile Club (“Auto Club”), seeks mandamus relief from the trial court’s

November 25, 2014 order compelling production of reports submitted to it by its

1 The underlying case is John Amponsah and Melanie Amponsah v. AAA Texas County Mutual Insurance company, AAA Texas, LLC, AAA Texas, and AAA Texas Interinsurance Exchange of the Automobile Club, No. 13-DCV-203651, in the 240th District Court of Fort Bend County, the Honorable Thomas R. Culver, III, presiding. retained engineer, Derrick S. Hancock, between the years 2000 and 2012, all of

which relate to insurance claims other than the one at issue in this case. We

conditionally grant mandamus relief.

Background

Real Parties in Interest, John and Melanie Amponsah, held a homeowner’s

policy with Auto Club. In 2012, they made a claim under that policy due to

foundation problems with their home. Auto Club denied the claim based on the

finding of its expert, Hancock, that the foundation problems were the result of

settling rather than a plumbing leak. The Amponsahs sued Auto Club and other

entities, claiming fraud, conspiracy to commit fraud, breach of contract, negligent

misrepresentation, gross negligence, and violations of the Deceptive Trade

Practices Act and Insurance Code.

The Amponsahs initially sought discovery of information relating to every

expert hired by Auto Club in connection with every foundation claim it handled

between 2000 and 2013. After the trial court severed the Amponsahs’ extra-

contractual claims from the breach of contract claim, it instructed the parties to

redraft their discovery requests to focus on the breach of contract claim alone.

The Amponsahs deposed Hancock, who testified that he had performed

more than fifty evaluations of claims for Auto Club, that he understood his

evaluations would be used by Auto Club to determine coverage, and that he found

2 the damage was caused by settling, rather than plumbing leaks, in approximately

70 to 80% of the foundation damage cases he handled for Auto Club. The day

after the deposition, the Amponsahs served additional discovery requesting

“[e]very report with Mr. Hancock’s name on it, that Mr. Hancock submitted to any

person with [Auto Club].” Auto Club objected to the request on the ground that it

was overly broad, unduly burdensome, and an impermissible fishing expedition.

The Amponsahs moved to compel, arguing that the information was necessary to

prove bias.

At a hearing on August 6, 2014, an associate judge granted the motion to

compel. Auto Club appealed to the district court judge, who limited the temporal

scope of the document request by one year, but nevertheless compelled Auto Club

to produce every report Hancock provided to Auto Club between the years 2000

and 2012.

Auto Club asserts that the district court abused its discretion by ordering this

discovery because the reports other than those relating to the Amponsahs’ claim

are irrelevant to the breach of contract issue and, at most, constitute extrinsic

evidence of bias that is inadmissible in light of Hancock’s deposition testimony.

The Amponsahs maintain the documents are necessary to (1) demonstrate whether

Hancock applied acceptable methodology in evaluating the Amponsahs’ claim, and

3 (2) show bias, which is always at issue under Texas Rule of Civil Procedure

192.3(e)(5).

Discussion

A. Standard of Review

To be entitled to mandamus relief, a relator must demonstrate that (1) the

trial court clearly abused its discretion and (2) the relator has no adequate remedy

by appeal. In re Reece, 341 S.W.3d 360, 364 (Tex. 2011) (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) (orig. proceeding)

(per curiam). A discovery order that compels production beyond the rules of civil

procedure is an abuse of discretion for which mandamus is the proper remedy. In

re Nat’l Lloyds Ins., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding) (per

curiam) (citing In re Deere & Co., 299 S.W.3d 819, 820 (Tex. 2009) (orig.

proceeding) (per curiam)).

B. Applicable Law

The rules of civil procedure define the scope and methods of expert witness

discovery. See TEX. R. CIV. P. 192.3(e); In re Ford Motor Co., 427 S.W.3d 396,

397 (Tex. 2014) (orig. proceeding) (per curiam). The scope of information that a

4 party may discover about testifying expert witnesses includes facts known by the

expert forming the basis of his mental impressions and opinions, the expert’s

mental impressions formed in connection with the case and the methods used to

derive them, and “any bias of the witness.” TEX. R. CIV. P. 192.3(e). It is not a

ground for objection “that the information sought will be inadmissible at trial if the

information sought appears reasonably calculated to lead to the discovery of

admissible evidence.” TEX. R. CIV. P. 192.3(a); In re Nat’l Lloyds Ins., 449 S.W.3d

486 at 488.

However, even these liberal discovery parameters have limits, and discovery

requests must not be overbroad. In re Nat’l Lloyds Ins., 449 S.W.3d at 488. Overly

broad and expansive discovery requests are particularly troublesome when directed

at testifying expert witnesses because such discovery requests can “permit

witnesses to be subjected to harassment and might well discourage reputable

experts” from participating in the litigation process. In re Ford Motor Co., 427

S.W.3d at 397. Overbroad requests are improper whether they are burdensome or

not. In re Nat’l Lloyds Ins., 449 S.W.3d at 488.

Bias, in its usual meaning, is an inclination toward one side of an issue

rather than to the other. See Compton v. Henrie, 364 S.W.2d 179, 182 (Tex. 1963).

Proof of bias on the part of an expert witness may be offered to impeach the

expert’s credibility. TEX. R. EVID. 613(b). However, “[c]ourts have recognized

5 that discovery into the extent of an expert’s bias is not without limits.” In re Ford

Motor Co., 427 S.W.3d at 397. And the Texas Supreme Court has reasoned that

the most probative information regarding the bias of a testifying expert comes from

the testimony of the experts themselves. Id. at 398.

C. Analysis

We conclude that the district court abused its discretion in ordering Auto

Club to produce Hancock’s reports other than the report addressing the

Amponsahs’ claim.

Contrary to the Amponsahs’ contention, the content of the reports provided

by Hancock to Auto Club on claims other than the Amponsahs’ claim is not

relevant to the Amponsahs’ breach of contract claim. The Amponsahs contend that

whether Hancock applied acceptable methodology and evaluated the cause of the

Amponsahs’ foundation failure in accordance with scientific method can only be

determined by examining reports he has made in other cases. But the Texas

Supreme Court has recently rejected this very argument in a strikingly similar case.

In In re National Lloyds Insurance Company, 449 S.W.3d 486 (Tex. 2014), the

insured, Erving, claimed that National Lloyds breached its insurance contract by

underpaying her property damage claims after storms damaged her home in Cedar

Hill, Texas. Id. at 488. Erving sought all claim files of three individual adjusters

for the preceding six years and all claim files of two adjusting firms for the past

6 year. Id. “Erving . . . proposed to compare National Lloyds’ evaluation of the

damage to her home with National Lloyds’ evaluation of the damage to other

homes to support her contention that her claims were undervalued.” Id. at 489.

The trial court ordered production of the files for claims handled by the two

adjusting firms, but limited the claims to those involving properties in Cedar Hill

that were damaged by the storms. Id. at 488.

The appellate court denied National Lloyds’ request for mandamus relief,

but the Texas Supreme Court granted relief, noting that it “fail[ed] to see how

National Lloyds’ overpayment, underpayment, or proper payment of the claims of

unrelated third parties is probative of its conduct with respect to Erving’s

undervaluation claims at issue in this case.” Id. at 489. The Supreme Court

continued, “this is especially so given the many variables associated with a

particular claim, such as when the claim was filed, the condition of the property at

the time of filing (including the presence of any preexisting damage), and the type

and extent of damage inflicted by the covered event.” Id. In other words,

“[s]couring claim files in hopes of finding similarly situated claimants whose

claims were evaluated differently from Erving’s” in order to prove that National

Lloyds breached the contract by underpaying her “[was] at best an ‘impermissible

fishing expedition.’” Id. (quoting Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815

(Tex. 1995) (per curiam)).

7 Likewise, here, each report prepared by Hancock would be affected by

“many variables associated with [that] particular claim, such as when the claim

was filed, the condition of the property at the time of filing (including the presence

of any preexisting damage),” and other factors. See id. These are unique to each

claim and have no bearing on whether the damage to the Amponsahs’ house was

actually caused by settling versus a leak. Accordingly, the reports are not

discoverable on the theory that they are evidence that may support their breach of

contract claim. Id.

The Amponsahs also contend that the reports are discoverable because they

are evidence that proves Hancock’s bias. But the Amponsahs have already

questioned Hancock about his potential bias. As the Texas Supreme Court

explained in In re Ford Motor Company, 427 S.W.3d 396 (Tex. 2014), “discovery

into the extent of an expert’s bias is not without limits.” Id. at 397. In In re Ford,

the defendant Ford Motor Company’s two testifying experts were questioned about

the percentage of cases in which they had testified for a plaintiff and about the

percentage of the total expert testimony that they had provided that was for Ford

Motor Company. Id. at 398. But the Supreme Court held that further discovery of

“all cases the [experts] have handled for Ford or any other automobile

manufacture” over a 12-year period was an impermissible “fishing expedition,”

and disallowing it did not unduly inhibit discovery of the experts’ potential bias.

8 Id. at 397–98. The Supreme Court noted that the plaintiff already had the “most

probative information regarding the bias of a testifying expert”—testimony from

the experts themselves. See id. at 398.

Similarly, here, Hancock testified in his deposition about the number of

foundation evaluations he has performed for Auto Club, and further testified that

he found that settling rather than plumbing leaks caused the foundation problems

in 70 to 80 percent of the claims he has evaluated. This testimony is similar to the

expert testimony in In re Ford that the Supreme Court described as the most

probative type of evidence regarding bias because it came from Hancock himself.

See id. Likewise, the reports the Amponsahs seek to discover are analogous to the

additional discovery requested in In re Ford—“all cases the [experts] have handled

for Ford or any other automobile manufacturer” over a 12-year period—that was

disallowed by the Supreme Court. Id. at 397 (restricting additional discovery did

not unduly inhibit discovery of experts’ potential bias because direct evidence from

experts was most probative evidence). Accordingly, the reports are not

discoverable to show bias. See In re Ford, 427 S.W.3d at 397–98.

Conclusion

The trial court abused its discretion in compelling discovery of Hancock’s

reports relating to claims other than the Amponsahs’ claim that Hancock provided

to Auto Club between 2000 and 2012. Because Auto Club would be forced to

9 produce these reports before an appeal is available, it has no adequate remedy at

law and is entitled to mandamus relief. See In re Dana Corp., 138 S.W.3d 298,

301 (Tex. 2014) (orig. proceeding) (per curiam).

We lift our stay and conditionally grant mandamus relief. We direct the trial

court to vacate its November 25, 2014 Order Denying Defendants’ Appeal of

Order Granting Plaintiffs’ Motion to Compel Reports by Retained Testifying

Expert, and Denying Defendants’ Motion For Protective Order. We also direct the

trial court to vacate its August 6, 2014 Order Granting Plaintiffs’ Motion to

Compel Reports by Retained Testifying Expert. We are confident the trial court

will comply, and our writ will issue only if it does not.

All pending motions are dismissed as moot.

Rebeca Huddle Justice

Panel consists of Justices Jennings, Higley and Huddle.