in Re Reassure America Life Insurance Company

Citations: 421 S.W.3d 165; 2013 WL 6053832; 2013 Tex. App. LEXIS 13895Docket: 13-13-00431-CV

Court: Court of Appeals of Texas; November 12, 2013; Texas; State Appellate Court

Original Court Document: View Document

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Reassure America Life Insurance Company filed a petition for a writ of mandamus to compel the trial court to vacate its order allowing presuit depositions under Texas Rule of Civil Procedure 202. The respondent is Judge Albert Garcia of Hidalgo County, Texas. The original petition was filed by Rene A. Garcia, who sought permission to take depositions to investigate a potential claim against Reassure concerning policy number MP0153991. Garcia's request included testimonies related to the policy file, the agreement between him and Reassure, the insurance policy's aspects, and corporate knowledge of Reassure. He argued that the depositions would aid in an anticipated lawsuit and prevent a delay in justice. He also requested the production of specific documents, including the entire policy file and underwriting manual.

Reassure objected, asserting that Garcia's petition lacked necessary factual background and justification, imposed significant burdens, was not narrowly tailored, and involved confidential trade secrets.

The trial court granted a petition for discovery after a non-evidentiary hearing, determining that allowing the requested discovery could prevent a failure or delay of justice and that the benefits of the discovery outweigh the associated burdens. The order permits [Garcia] to conduct oral depositions of individuals with relevant knowledge and mandates the production of specified documents 30 days prior to the first deposition. 

Key subjects for deposition include: 
1. The entire file related to policy number MP0153991.
2. The agreement details between [Garcia] and [Reassure], including negotiations and obligations.
3. The policies, procedures, and manuals of [Reassure] and predecessor entities at the time of policy consummation.
4. Knowledge regarding the delivery agent services agreement.
5. Information on the sale of policy number MP0153991 to [Garcia].
6. The sale of the policy by the predecessor entity to [Reassure] and secondary market sales.
7. The corporate structure of [Reassure] and predecessor entities.
8. Mergers and acquisitions involving the predecessor entities and [Reassure].
9. Liability incurred by [Reassure] from predecessor entities related to the policy.

Documents to be produced include:
1. The entire file for policy number MP0153991.
2. All collateral contracts related to the agreement between [Garcia] and [Reassure].
3. Policies, procedures, and manuals of [Reassure] and predecessor entities.
4. The delivery agent services agreement.
5. Sales policy and procedural manuals for policy number MP0153991.
6. Documents on corporate structure changes and mergers/acquisitions.
7. Liability documents incurred from predecessor entities.
8. Underwriting manuals of [Reassure] and predecessor entities.

If available, any Asset/Purchase agreements must also be provided.

Reassure challenges the trial court's decision to grant a petition for presuit depositions, claiming an abuse of discretion. The court received responses from both Reassure and Garcia regarding the petition for writ of mandamus. Mandamus relief is appropriate to address clear abuses of discretion when no suitable appellate remedy exists. A trial court must apply the law correctly to the facts, and the adequacy of appellate remedies is evaluated by weighing the advantages of mandamus against its disadvantages. Key considerations include whether mandamus can prevent wasted time and resources from an eventual reversal of the trial court's decision. Discovery orders deemed improper under Texas Rule of Civil Procedure 202 can be challenged through mandamus, as depositions cannot be undone once taken. Rule 202 allows petitions for depositions before suit under two conditions: to preserve testimony for anticipated litigation or to investigate a potential claim. A valid Rule 202 petition must be verified, filed in the correct venue, indicate anticipation of a lawsuit or investigation, and describe the subject matter and the petitioner's interest.

Petitioners anticipating a lawsuit must provide the names, addresses, and contact details of individuals with adverse interests or explain why this information cannot be obtained. They must also identify individuals to be deposed, outline the expected testimony, and justify the need for such testimony. A court must grant a deposition request if it determines that the deposition may prevent a delay in justice or that the benefits of the deposition outweigh any burdens. The Texas Supreme Court emphasizes that these findings cannot be assumed from the record. Rule 202 depositions are not intended for routine discovery and must be carefully supervised to prevent abuse. The scope of discovery is limited to what would be permissible in the anticipated suit. Reassure claims that the petition does not meet Rule 202 requirements by failing to identify adverse parties, the substance of expected testimony, and reasons for obtaining it. The petition simultaneously references both anticipated lawsuits and investigations of potential claims, focusing on a specific policy and potential legal causes of action related to it, including the elicitation of business records and details about employees present during the relevant incident.

Reassure argues that Garcia's petition fails to meet the requirements of Rule 202, which does not mandate a specific cause of action but requires the petitioner to outline the subject matter of the anticipated action and their interest in it. Citing case law, the court acknowledges the investigatory purpose of Rule 202, which necessitates a broader interpretation of pleadings. However, the court finds Garcia's petition lacking as it only indicates the depositions are for an anticipated suit related to policy number MP0153991 and states that Garcia holds potential legal causes of action. The petition fails to detail the incident in question, including its date or any potential claims, does not name adverse parties or explain why they cannot be identified, and does not justify how the depositions would prevent a failure or delay of justice. Furthermore, the petition merely echoes Rule 202's language without providing sufficient factual support. Arguments made by Garcia's counsel at the hearing do not clarify these deficiencies, primarily addressing potential wrongs by Reassure without substantiating the necessary legal framework for the anticipated suit. Overall, the petition does not provide adequate information for the trial court or Reassure regarding the incident or legal claims at issue.

Garcia's petition was found deficient as he did not present his verified petition or any evidence at the hearing. He bore the burden to demonstrate that allowing depositions would prevent a failure or delay of justice or that the benefits of the depositions outweighed the associated burdens. The real parties in interest failed to provide evidence of imminent loss of witness testimony, and the insurance company's potential prejudice from deposition outweighed any benefits. The petition did not meet the requirements of Rule 202, as it lacked sufficient allegations. 

Reassure argued that the trial court's order exceeded permissible discovery, citing that discovery includes unprivileged, relevant information even if inadmissible at trial. However, the order required the production of information and depositions beyond what Garcia's petition requested, including aspects related to Reassure's predecessor entities that were not mentioned in the petition. As a result, the trial court abused its discretion by compelling discovery that was not requested.

Reassure argues that the requested discovery exceeds permissible limits and constitutes a fishing expedition. The court declines to determine the appropriate scope of discovery, stating that analysis is unnecessary based on existing holdings. The court notes that the scope of discovery must relate to the action's subject matter, and Garcia's petition inadequately identified any anticipated suit or claim, rendering any inquiry invalid from the start. The trial court's July 11, 2013 order granting Garcia's petition for presuit depositions is deemed an abuse of discretion due to Garcia's failure to meet the requirements of Texas Rule of Civil Procedure 202. Reassure lacks an adequate remedy by appeal. After reviewing the petition for writ of mandamus, the court concludes that Reassure has met the burden for relief and lifts the previously imposed stay. The court conditionally grants Reassure’s petition, expecting the trial court to withdraw its order, with the writ set to issue only if the trial court fails to comply.