in Re WTG Fuels, Inc.

Citation: Not availableDocket: 11-19-00390-CV

Court: Court of Appeals of Texas; January 12, 2020; Texas; State Appellate Court

Original Court Document: View Document

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WTG Fuels, Inc. filed a petition for a writ of mandamus seeking to vacate two orders issued by Judge Rodney W. Satterwhite on October 9, 2019, regarding a case involving Plaintiffs John Schmidt, Robert Graves, and Weston Brandes, who claimed injuries from a propane explosion on property leased by the Hayters. The first order, which struck WTG’s designation of the Hayters as potentially responsible third parties, was denied by the court. The second order, which allowed Plaintiffs to conduct discovery into WTG's net worth in relation to their claims, was conditionally granted. 

The background details the events leading to the lawsuit, including the explosion caused by a propane leak from a corroded pipe, and WTG's designation of the Hayters under Texas Civil Practice and Remedies Code § 33.004. The Hayters had filed a motion for summary judgment asserting they were not liable due to the Recreational Use Statute and lack of evidence for negligence. Judge Satterwhite granted their summary judgment motion, dismissing the claims against the Hayters and severing them into a separate cause. 

In response to Plaintiffs' motion to strike the Hayters’ designation and the motion for net worth discovery, WTG contended there was sufficient evidence regarding the Hayters’ potential responsibility and challenged the validity of the net worth discovery request. Ultimately, the court granted Plaintiffs’ motion for net worth discovery on a limited basis.

Plaintiffs' Motion for Net Worth Discovery against WTG Fuels, Inc. is granted, limited to the current and preceding year's balance sheets. All responsive documents must remain confidential and shared on a need-to-know basis. WTG's petition for writ of mandamus asserts that Judge Satterwhite abused his discretion by striking the Hayters as potentially responsible third parties and allowing net worth discovery, claiming inadequate remedy on appeal. Plaintiffs counter that the petition is barred by laches and argue WTG has not shown an abuse of discretion or lack of adequate remedy. 

Mandamus is an extraordinary remedy requiring proof of a clear abuse of discretion by the trial court, which occurs when a ruling is arbitrary or disregards legal principles. After reviewing the mandamus petition regarding the October 9, 2019 order that struck the Hayters, the court denies WTG's request for relief on this matter. Regarding net worth discovery, Section 41.0115(a) of the Texas Civil Practice and Remedies Code permits such discovery if the court finds the claimant has a substantial likelihood of success for exemplary damages. The court emphasizes adherence to the statutory language and legislative intent without altering the original text. Net worth discovery is only authorized following a court finding as specified in the statute.

Section 41.0115(a) mandates that a party requesting net worth discovery must first show a substantial likelihood of success on a claim for exemplary damages, supported by the trial court's finding. In the October 9, 2019 order, Judge Satterwhite did not find that the Plaintiffs demonstrated such likelihood regarding their gross negligence claim. Consequently, without this finding, the judge lacked the authority to permit discovery of WTG’s net worth. Previous cases, including In re Michelin N. Am. Inc. and In re Kuntz, establish that a trial court abuses its discretion when a discovery order contravenes the Texas Rules of Civil Procedure. WTG also lacks an adequate remedy by appeal since unauthorized discovery cannot be corrected post-trial, as indicated in In re Jorden and In re Dana Corp. Thus, an order that compels unlawful discovery constitutes an abuse of discretion, justifying mandamus relief, as affirmed in In re Turner. The court denies WTG’s petition for writ of mandamus regarding the motion to strike the Hayters as potentially responsible third parties, but conditionally grants mandamus for the net worth discovery order, which must be vacated by January 22, 2020, or a writ will issue.