Steve W. Sterquell v. Neal B. Scott, Ind. Neal B. Scott, Trustee of the Andrea Lynn Scott Trust And Nusara Kaentong

• Court: Court of Appeals of Texas
• Decided: July 2, 2002
• Docket: 07-01-00191-CV
• Status: Published

Opinion

NO. 07-01-0191-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL A

JULY 2, 2002

______________________________

STEVE W. STERQUELL, APPELLANT

V.

NEAL B. SCOTT, INDIVIDUALLY; NEAL B. SCOTT, TRUSTEE OF THE ANDREA LYNN SCOTT TRUST; AND, NUSARA KAENTONG, APPELLEES

_________________________________

FROM THE 251^ST DISTRICT COURT OF POTTER COUNTY;

NO. 83,731-C; HONORABLE PATRICK PIRTLE, JUDGE

_______________________________

Before BOYD, C.J., and REAVIS and JOHNSON, JJ.

Appellant Steve W. Sterquell appeals from a take-nothing judgment following a bench trial. We abate the appeal and remand with directions to the trial court to file findings of fact and conclusions of law.

This appeal arises from a suit by Sterquell seeking to establish that interests in various tracts of Potter County real estate purportedly transferred by appellee Neal B. Scott, individually, were subject to a lien created by an abstract of a judgment in favor of Sterquell. The abstract of judgment was filed in January, 1991, in Potter County. The deeds by Scott were of varying dates: one was before the date the abstract of judgment was filed; several were after.

The case was tried to the court sitting without a jury. On February 21, 2001, the trial court signed a take-nothing judgment. On March 5, 2001, Sterquell filed a Request for Findings of Fact and Conclusions of Law. No findings and conclusions were filed. On April 3, 2001, Sterquell filed a Notice of Past Due Findings of Fact and Conclusions of Law. No findings and conclusions were filed.

On appeal, Sterquell urges, in part, that the trial court erred in failing to file findings and conclusions. Appellees Neal B. Scott, Individually; Neal B. Scott, Trustee of the Andrea Lynn Scott Trust; and Nusara Kaentong (collectively, "Scott"), urge that Sterquell's request for findings and notice of past due findings are nullities because the certificates of service on his requests certified that service was made via regular mail, and that such manner of service does not comply with Tex. R. Civ. P. 21a. ⁽¹⁾ Scott also urges that the failure of the trial court to file findings and conclusions, if error, was harmless error. We will address Scott's contentions in the order presented.

First, we disagree that Sterquell's requests were nullities. Sterquell's failure to serve Scott in accordance with TRCP 21a, if Sterquell did not comply with the rule, does not render Sterquell's filings nullities. The failure is a matter for the trial court to address in accordance with TRCP 21b.

Next, Scott urges that Sterquell has not been harmed by the absence of findings and conclusions because the evidence is uncontroverted that the three trusts involved were created for legitimate purposes and not as sham transactions. Even assuming, arguendo, the correctness of Scott's assertion, a question on which we offer no opinion, Scott does not address the issues of whether a lien in favor of Sterquell was established on any or all of the interests transferred by Scott, and if so, what priority the lien had. Such questions, among others, were part of Sterquell's claims in the trial court. And, unless the appellate record affirmatively shows no harm to Sterquell, the failure of the trial court to file properly-requested findings and conclusions on contested issues is presumed harmful. See Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768, 772 (Tex. 1989). We conclude that the record does not affirmatively show that Sterquell has not been harmed by the absence of findings and conclusions and the trial court's error is not harmless. See TRCP 298, 299; Magallanes, 763 S.W.2d at 772.

We abate the appeal and remand the cause to the trial court. On remand, the trial court is directed to file findings of fact and conclusions of law on or before July 31, 2002, which date shall be deemed to be the 20^th day after a timely request for findings and conclusions for purposes of TRCP 297, 298 and 299a, which rules shall apply to further proceedings in the trial court pursuant to this order. The trial court is further directed to cause the trial court clerk to prepare and file a supplemental appellate record which includes the trial court's findings of fact and conclusions of law.

Appellant and appellees are directed to re-brief the appeal. The provisions of Tex. R. App. P. 38 ⁽²⁾ shall apply to such re-briefing. The provisions of TRAP 39 will apply to requests for oral argument.

Except as specifically set out otherwise in this opinion, provisions of the TRCP and TRAP apply to further proceedings.

Per Curiam

Do not publish.

1. Further reference to the rules of civil procedure will be by reference to "TRCP."

2. Further reference to the rules of appellate procedure will be by reference to "TRAP."

avit of David Gates, a vice president for Energas attached, (4) a reporter's record of the argument of counsel ⁽⁴⁾ upon the presentation of the motion to compel and Energas's opposition to the motion, and (5) the trial court's order.

By its sole issue, Energas contends the trial court abused its discretion in ordering it to produce documents pertaining to the entire city of Amarillo for a 12-year period of time and documents relating to the decision to cathodically protect lines within Amarillo for a 30-year period of time. In summary, Energas objected to production of the records contending that the requested documents were not relevant, and were overly broad and burdensome. Rule 192.3(b) of the Texas Rules of Civil Procedure ⁽⁵⁾ provides:

(b) Documents and Tangible Things. A party may obtain discovery of the existence, description, nature, custody, condition, location, and contents of documents and tangible things (including papers, books, accounts, drawings, graphs, charts, photographs, electronic or videotape recordings, data, and data compilations) that constitute or contain matters relevant to the subject matter of the action. A person is required to produce a document or tangible thing that is within the person's possession, custody, or control.

Because the rule requires that documents and tangible things must be relevant to the subject matter of the action, we first address the question of relevance.

Relevance

As summarized above, the underlying action was commenced following a gas explosion at 2713 West 9^th Street in Amarillo resulting in fatal injuries to Forest Harvey Miller. By answers to request for admissions, Energas admitted:

• •it owned and operated the low pressure steel main located at or near 2713 West 9^th Street involved in the lawsuit;
• •a leak detection survey performed in August 1998 on the system which included the line at or near 2713 West 9^th Street found over 80 leaks over an area of approximately three square miles;
• •there was no cathodic protection and no effective external coating on the low pressure steel main located at or near 2713 West 9^th Street on September 13, 1999;
• •that on September 13, 1999, or within a day or two thereafter, the low pressure steel main located at or near 2713 West 9^th Street, was found to have active external corrosion with holes and large-scale pitting; and
• •that soon after September 13, 1999, Energas replaced the low pressure steel main located at or near 2713 West 9^th Street with polyethylene pipe.

Although the first 11 of the challenged production requests expressly reference sections 192.457 and 192.465 of Title 49 of the Code of Federal Regulations, ⁽⁶⁾ and the following requests also seek documents within the context of cathodic protection and inspection of buried lines, Energas did not object on the grounds that sections 192.457 and 192.465 did not apply to the subject line or otherwise question the applicability of the regulations. Although Energas contends here that relevant information is limited to the history of the particular line serving 2713 West 9^th Street, it does not argue or contend that records relating to Energas operations in the context of section 192.457 entitled "External corrosion control: Buried or submerged pipelines installed before August 1, 1971," or section 192.465 entitled "External corrosion control: Monitoring" are not relevant. Moreover, based upon this record, records applying to "the particular line serving 2713 West 9^th Street," may include records of Energas operations as they relate to the regulations. Considering the admissions of Energas and the absence of any objection or evidence in this record questioning the applicability of the regulations, we conclude that sections 192.457 and 192.465 are facially relevant to the claims of real party and, accordingly, the trial court did not abuse its discretion in holding that the relevancy requirement of Rule 192.3(b) was satisfied.

Overly Broad and Burdensome

The discovery rules do not contemplate the exclusion of relevant evidence unless the evidence sought is unfairly prejudicial, privileged, or incompetent. Further, discoverable information is also limited by legitimate interests of opposing parties such as avoiding harassment or overly-broad requests. Kern v. Gleason, 840 S.W.2d 730, 736 (Tex.App.--Amarillo 1992, no pet.). While discussing the new discovery rules, in In re Alford Chevrolet-Geo, 997 S.W.2d 173, 181 (Tex. 1999), the Court held:

A party resisting discovery, however, cannot simply make conclusory allegations that the requested discovery is unduly burdensome or unnecessarily harassing. The party must produce some evidence supporting its request for a protective order.

Rule 192.4 allows the trial court to limit discovery if it determines that:

(a) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; or

(b) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation and the importance of the proposed discovery in resolving the issues.

The affidavit of David Gates is the only evidence provided by Energas to support its objections to the requested discovery. As material here, the affiant states:

(a) In the City of Amarillo, Energas has approximately 5,062,906 total feet, or 958.88 miles, of gas mains.

(b) Energas performs leak surveys on its pipe in the City of Amarillo as frequently as twice per year ranging to a maximum time of five years between surveys. The frequency of leak surveys depends upon the type of pipe and the area being surveyed.

(c) Energas, in responses to discovery, has provided Plaintiff with documents relating to leak surveys, leaks found and repaired reports, and cathodic protection in an area with a 500 yard radius from 2713 West 9^th Street, Amarillo, Texas, which is the site of the incident in question. To require Energas to respond to Plaintiff's requests aimed at the City of Amarillo as a whole would burden Energas and its personnel, in that Energas would incur travel expenses plus work time that is lost, in addition to the expense of locating and copying thousands of pages of documents.

(Emphasis added). Significantly absent from the affidavit is any evidence that the requested records are cumulative or duplicative or supporting the grounds for limiting discovery set forth in Rule 192.4(b). Although the statement in (a) from Gates's affidavit constitutes a fact statement concerning the size of the Energas system in Amarillo, the statement in (b) does not implicate Energas's claims that the requests for production were overly broad and burdensome. Moreover, the statement that pipe is inspected twice per year is no evidence of Energas's practice ten years before the explosion on September 13, 1999. The first portion of (c) of the affidavit does not address the question of burdensomeness or that the requests are overly broad, and the emphasized portion of (c) constitutes only a conclusory allegation that production of the requested documents would be burdensome, contrary to In re Allford Chevrolet-Geo, 997 S.W.2d at 181. Further, the affidavit does not address or discuss 49 C.F.R. § 192.465, which provides in part that:

(a) Each pipeline that is under cathodic protection must be tested at least once each calendar year, but with intervals not exceeding 15 months . . . . At least 10 percent of these protected structures, distributed over the entire system must be surveyed each calendar year, with a different 10 percent checked each subsequent year, so that the entire system is tested in each 10-year period.

It is significant to note that the regulation contemplates that "the entire system," or as presented here, the entire city of Amarillo, be inspected at least every ten years.

The fact that a discovery request is burdensome is not enough to justify protection; "it is only undue burden that warrants nonproduction." ISK Biotech Corp. v. Lindsay, 933 S.W.2d 565, 568 (Tex.App.--Houslton [1^st Dist.] 1996, no pet.). See also In re Alford Chevrolet-Geo, 997 S.W.2d at 181 (requiring demonstration of undue burden or harassment). Accordingly, we conclude the trial court did not abuse its discretion in directing that the records be produced covering the entire system of Energas in Amarillo.

We now turn to the question regarding the period of time for which record production should be required. Most of the requests for production were tailored to require production of records ten years prior to the explosion and from the date of the explosion to the time of record production. However, requests 4, 17, and 24 did not contain any time limitation for record production. ⁽⁷⁾ As to requests 4 and 17, the trial court limited record production to the ten years before the explosion. However, as to request 24, whether by oversight or otherwise, the trial court did not impose any time limitation. Therefore, under the order Energas is required to produce all documents regarding its decision to cathodically protect lines within Amarillo that were installed prior to 1971 without any time limitation.

In Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815 (Tex. 1995), the plaintiffs sought to prove a general "corporate strategy to ignore safety laws." Although acknowledging the plaintiffs' rights to discover evidence of safety policies and practices, the Court held that a request for records "without limitation as to time, place or subject matter, is overbroad." Then, in In re American Optical Corp., 988 S.W.2d 711, 713 (Tex. 1998), the Court held that requiring production of records for a 50-year period was an abuse of discretion. Although the court recognized that parties must have some latitude in fashioning discovery requests, the right is not unlimited and "[t]he trial court must make an effort to impose reasonable discovery limits." (Emphasis added). Id.

Considering that the trial court set a pattern of limiting record production to the ten years prior to the explosion, and that 49 C.F.R. § 192.465(a) anticipates that the entire system is to be tested during each 10 year period, we conclude the trial court abused its discretion by not making an effort to impose reasonable discovery limits as to requests 24, as it did with requests 4 and 17.

Accordingly, the writ of mandamus is conditionally granted in part and denied in part. Although we have jurisdiction to direct the trial court to proceed to make an effort to impose reasonable discovery limits, we may not tell the court what limits it should enter. In re Martinez Ramirez, 994 S.W.2d 682, 684 (Tex.App.--San Antonio 1998, no pet.). The trial court is directed to consider and determine, in the exercise of its discretion, the need for reasonable discovery limits as to requests for production 24; otherwise, the writ is denied. The writ will issue only if the trial court fails to comply with these instructions.

Don H. Reavis

Quinn, J., concurring. Justice

Publish.

1. Energas complains about the ruling of the trial court on 22 requests for production. Eleven of the requests are expressly based on 49 C.F. R. Part 192, Section 192.457 or Section 192.465, and applicable Texas Railroad Commission Supplements, which regulations contain provisions for cathodic protection of buried gas pipelines and pipeline inspections to discover areas of corrosion. The remaining eleven requests relate to the efforts of Energas to comply with the regulations.

2. Cathodic protection. A means of protecting a buried pipe against corrosion. A current is directed onto the pipe by sacrificial annodes (metal ribbons) placed in the ground, parallel to and connected to the pipe. Pipe will not corrode if sufficient current flows onto the pipe. H. Williams, C. Meyers, P. Martin, B. Kramer, Oil & Gas Law, Vol 8, 1998.

3. Energas challenges request numbers 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 21, 22, 24, 30, 34, 36, 37, 38, and 41.

4. See Kern v. Gleason, 840 S.W.2d 730, 734 (Tex.App.--Amarillo 1992, no pet.) (holding that argument of counsel is not evidence).

5. All rule references herein are to the Texas Rules of Civil Procedure.

6. All regulation references herein are to Title 49 of the Code of Federal Regulations.

7. Request number 30 does not expressly include a time limitation; however, the deposition referenced in the request demonstrates that records since 1995 would be sufficient to satisfy the request.