in Re: Gabe Sassin ( 2014 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
§ No. 08-12-00308-CV
IN RE GABE SASSIN, § AN ORIGINAL PROCEEDING IN
RELATOR § MANDAMUS
§
§
OPINION
Relator is Gabe Sassin, a non-party witness in the underlying medical malpractice lawsuit.
Counsel for Plaintiff discovered Sassin was once the claims attorney hired by Defendant’s
malpractice insurance carrier and sought Sassin’s testimony regarding the policies and procedures
used by the carrier to determine whether to honor an insured’s request to settle. After being
subpoenaed, Sassin moved to quash notice of his deposition and for a protective order. The trial
court denied both motions, and Sassin now seeks a writ of mandamus compelling the trial court to
vacate its order.1 See TEX.GOV’T CODE ANN. § 22.221 (West 2004); see also TEX.R.APP.P. 52.
We conditionally grant relief.
FACTUAL AND PROCEDURAL BACKGROUND
1
Although the trial court denied Relator’s motions, it stayed his deposition pending the outcome of this mandamus
proceeding.
The underlying medical malpractice suit was brought by Betty Brown against Gregory
Misenhimer, M.D. 2 Dr. Misenhimer’s malpractice insurance carrier, Medicus Insurance
Company, hired David Jeans to defend Dr. Misenhimer. During the course of pretrial
proceedings, Dr. Misenhimer informed Brown he wanted to settle and retained Michael Volk as
his personal counsel to effectuate settlement. On Dr. Misenhimer’s behalf, Volk asked Medicus
to settle, but Medicus refused. Brown then filed a motion challenging Jeans’s authority to
continue representing Dr. Misenhimer. The trial court held a hearing on Brown’s motion. At the
hearing, the trial court admitted into evidence affidavits executed by Dr. Misenhimer and
Elizabeth Ali, the claims attorney then assigned to the case. 3 Both Dr. Misenhimer and Ali
averred Jeans had the authority to represent Dr. Misenhimer in the medical malpractice case.
Jeans asserted the affidavits “prove conclusively that I have the requisite authority to represent
Dr. Misenhimer” and requested the trial court to deny Brown’s motion. Brown countered that:
Jeans . . . is conflicted out of the case because he cannot and will not adhere to what
should be done in the reasonable investigation of this case.
If, in fact, they did the job they should have done in this case and the doctor
consented to settling the case, the case should be settled in this particular fact
situation.
. . .
So . . . I decided to file the Rule 12 because of the fact that who represents Dr.
Misenhimer, who has Dr. Misenhimer’s interest at hand.
The trial judge informed the parties that, although she was taking the matter under advisement, she
wanted to hear from Ali and Volk because their testimony was crucial in helping her resolve the
motion in light of her two concerns: (1) avoiding delays and protracted litigation; and (2) sparing
2
Brown and Dr. Misenhimer are the real parties in interest in this mandamus proceeding.
3
Ali was employed by Western Litigation, a third-party administrator retained by Medicus to manage its malpractice
claims.
2
the parties the expense and anguish associated with litigation. The trial judge was particularly
interested in hearing from Ali regarding “generalized information of how [malpractice insurance]
policies are administered, how the attorneys are retained and what the role is of you and also on
behalf of Medicus if you have that information.”
Ali was unable to furnish the specific information sought by Brown and the trial judge, but
identified several individuals, including Sassin, likely to have that information. Jeans re-urged
his argument that the affidavits submitted by him were all that the trial court required to deny the
motion. The trial court ignored Jeans’s pleas and proceeded to examine Volk. After Volk
described some of the scenarios that could arise from an insurer’s refusal to consent to settlement ,
the following exchange occurred:
THE COURT: And Mr. Volk, in your various experiences in handling these kind
of representation have you had to do that against an insurance company?
MR. VOLK: I have never had to file a lawsuit but there has been lots of cases
where the insurance carrier refused to settle the claim and required the doctor to go
to trial.
THE COURT: And after that circumstance, they ended up responsible for the
judgment?
MR. VOLK: Sometimes, yes. But sometimes there is a defense verdict and you
and I know and everybody in this courtroom knows that statistically the doctor or
the health care provider wins a jury trial 80, 85 percent of the time.
So the gamble is from the insurance carrier’s standpoint and they win that
gamble most of the time.
THE COURT: And I am glad you made that statement because at the outset I
wanted to establish what my concerns were and I think that essentially summed it
up for me in your statement.
And that is if there is a gamble and there is a positive outcome for the
physician, then that still doesn’t set aside all the anguish and worry that comes with
that.
MR. VOLK: That comes with the territory, Judge, unfortunately.
3
THE COURT: Okay. And I appreciate that. And the same thing on the
plaintiff’s side. It just sometimes extends unnecessarily the litigation and that’s
what we are here for.
Following this exchange, the trial court continued the hearing.
Brown then noticed the deposition of Sassin and issued a subpoena duces tecum. Sassin
moved to quash the deposition, objecting to the time and place set forth in the notice because of
scheduling conflicts. Sassin also moved for a protective order “based on [the] objectionable and
privileged nature of this deposition and the referenced notice.”
The trial court held a hearing on Sassin’s motion. At the hearing, Sassin’s counsel argued
that Sassin’s deposition was irrelevant in determining whether Jeans had the authority to represent
Dr. Misenhimer in the underlying case. Counsel also argued that the information sought by
Brown was protected by the attorney-client and work-product privileges. The trial court,
however, was not swayed by these arguments and denied Sassin relief. When pressed by Sassin’s
counsel to articulate the reason why Sassin’s deposition was necessary, the trial court responded as
follows:
It is my understanding in the basis of this motion to show authority of David
Jeans which is the motion that was before the Court, that is before the Court, just
the fact that there is a significant contrary position that has not only been voiced by
the defendant doctor but has been actually documented in some form that is
contrary to what Mr. Jeans is presenting as his position is significant in my opinion
to go ahead and require more investigation.
MANDAMUS STANDARD
To obtain mandamus relief from the trial court’s order, Sassin must meet two requirements.
He must show that the trial court clearly abused its discretion and that he has no adequate remedy
by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004).
4
A trial court 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 or apply the law
correctly. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005). A trial court
has the discretion to order discovery from a non-party, “but may only do so within the confines of
the Rules of Civil Procedure.” Haas v. George, 71 S.W.3d 904, 915 (Tex.App.--Texarkana 2002,
no pet.). The scope of discovery permitted by the rules of procedure includes any unprivileged
information that is relevant to the subject matter of the action, even if it would be inadmissible at
trial, so long as the information is reasonably calculated to lead to the discovery of admissible
evidence. See TEX.R.CIV.P. 192.3(a). Information is relevant if it tends to make the existence of
any fact that is of consequence to the determination of the action or defense more or less probable
than it would be without such information. See TEX.R.EVID. 401. Therefore, because discovery
is limited to matters that are relevant to determination of the issue before the trial court, an order
that compels production of irrelevant matters amounts to an impermissible “fishing expedition”
and constitutes an abuse of discretion. In re CSX Corp., 124 S.W.3d 149, 152-53 (Tex. 2003).
A non-party to a suit has no right to appeal a discovery order in that suit and therefore has
no adequate remedy by appeal. In re Metro ROI, Inc., 203 S.W.3d 400, 403 (Tex.App.--El Paso
2006, no pet.); In re Arras, 24 S.W.3d 862, 864 (Tex.App.--El Paso 2000, no pet.).
MOTION TO SHOW AUTHORITY
In one issue encompassing three sub-issues—the first of which is dispositive—Sassin
argues the trial court erred in denying his motions to quash and for a protective order.4 In Sassin’s
first sub-issue, he argues his testimony is unnecessary to resolve Brown’s motion to show
4
The other two grounds encompass Sassin’s arguments that his testimony was privileged and not subject to discovery
because Brown had not: (1) shown substantial need or undue hardship; and (2) made a good faith effort to obtain the
information sought from him by less intrusive means.
5
authority. We agree.
Applicable Law
Rule 12 of the Texas Rules of Civil Procedure permits any party to challenge an attorney’s
authority to prosecute or defend a lawsuit. TEX.R.CIV.P. 12. The Rule’s primary purpose is to
enforce a party’s right to know who authorized the suit. Angelina Cnty. v. McFarland, 374
S.W.2d 417, 422-23 (Tex. 1964). The challenged attorney must appear before the trial court to
show his authority to act on behalf of his client. TEX.R.CIV.P. 12; R.H. v. Smith, 339 S.W.3d 756,
762 (Tex.App.--Dallas 2011, no pet.); Boudreau v. Fed. Trust Bank, 115 S.W.3d 740, 741
(Tex.App.--Dallas 2003, pet. denied). At the hearing on the motion, the challenged attorney bears
the burden of proof to show the requisite authority. Smith, 339 S.W.3d at 762; Boudreau, 115
S.W.3d at 741. When resolving the motion, the trial court considers and weighs the evidence
presented at the hearing. In re Guardianship of Benavides, 403 S.W.3d 370, 376 (Tex. App.--San
Antonio 2013, pet. denied); Smith, 339 S.W.3d at 762-63. Typically, a challenged attorney
satisfies his burden if he produces an affidavit or testimony from his client indicating the attorney
was retained to provide representation in the case. See Patton Children’s Trust v. Hamlin, No.
07-07-0488-CV, 2008 WL 3863475, *4 (Tex.App.--Amarillo Aug. 20, 2008, no pet.); Boudreau,
115 S.W.3d at 742; Spigener v. Wallis, 80 S.W.3d 174, 184 (Tex.App.--Waco 2002, no pet.).
Discussion
The issue before the trial court was whether Jeans had the authority to represent Dr.
Misenhimer in the underlying litigation. The issue was not whether Medicus should have
consented to Dr. Misenhimer’s request to settle the litigation. That issue is peripheral and the
subject of a separate inquiry concerning coverage and bad faith. Accordingly, the pertinent
6
inquiry is whether information on the general policies and procedures used by Medicus to evaluate
an insured’s request to settle is necessary to resolve Brown’s motion to show authority. We
conclude that it is not.
In light of the affidavits executed by Ali and Dr. Misenhimer, the information sought from
Sassin is irrelevant in determining whether Jeans represented Dr. Misenhimer in the underlying
litigation. These affidavits were the only evidence presented on the material issue to be resolved
by the trial court, and they were admitted without objection. As indicated earlier, both Ali and Dr.
Misenhimer averred in their affidavits that Jeans had the authority to represent Dr. Misenhimer.
Brown does not argue the affidavits are defective, and there is nothing in the record indicating that
they are. Nor does Brown maintain that Ali and Dr. Misenhimer were incompetent to make the
affidavits, and there is nothing in the record suggesting they were. Compare In re Guardianship
of Benavides, 403 S.W.3d at 376-77 (concluding the trial court did not abuse its discretion in
finding that attorney did not have authority to represent the proposed ward because evidence
indicated the proposed ward, despite signing an affidavit averring the attorney represented him,
lacked the mental capacity to retain his own counsel at the time the attorney began representing
him). Likewise, nothing in the record suggests Dr. Brown was incapable of discharging Jeans and
unilaterally settling Brown’s claim against him. That Dr. Misenhimer may have borne the cost of
settlement is not germane to resolving the primary matter before the trial court. Moreover,
because Brown presented no evidence controverting the averments in the affidavits executed by
Ali and Dr. Misenhimer, their affidavits conclusively established Jeans had the authority to
represent Dr. Misenhimer in the underlying litigation. See Boudreau, 115 S.W.3d at 742;
Spigener, 80 S.W.3d at 184.
7
Brown counters that Sassin’s testimony is necessary for two reasons. Neither reason is
persuasive, however.
First, Brown asserts Sassin’s testimony was required because the trial judge did not have
sufficient evidence to rule on the motion given the specter that Jeans was not representing Dr.
Misenhimer’s best interests as a result of Dr. Misenhimer’s conflict with Medicus. We do not
dispute that a conflict of interest may exist here in light of the nature of the tripartite relationship
among an insurer, defense counsel, and insured in the context of insurance defense litigation. See
Employers Cas. Co. v. Tilley, 496 S.W.2d 552, 558-59 (Tex. 1973)(discussing duties of attorney
when conflict of interest arises in tripartite relationship). A conflict does not itself preclude an
attorney hired and paid by the insurance company from representing the insured so long as the
insured consents to that representation. See id. at 559 (recognizing that an attorney may continue
to represent the insured when a conflict of interest arises if the insured acquiesces in the
continuation of such defense).
Here, Dr. Misenhimer consented to Jeans’s representation when he obtained liability
insurance from Medicus. The insurance policy granted Medicus “the right and duty to defend any
claim or any suit against the insured . . . .” [Emphasis in orig.]. In exchange for legal protection
against future liability, Dr. Misenhimer gave Medicus not only the right to conduct his defense but
also “the authority to select the attorney who will defend the claim and to make other decisions that
would normally be vested in the insured as the named party in the case.” N. Cnty. Mut. Ins. Co. v.
Davalos, 140 S.W.3d 685, 688 (Tex. 2004). Also, by executing his affidavit after the conflict
arose between him and Medicus, Dr. Misenhimer re-affirmed his consent to Jeans’s continued
representation in the underlying litigation.
8
Second, Brown maintains that Sassin’s testimony is necessary to shed light on “what
happens at Medicus if a doctor was forced to trial and then admitted liability” because, under the
insurance policy, Dr. Misenhimer risks the denial of reimbursement if he admits liability. 5
However, the information sought by Brown relates to issues of coverage and bad faith, and Brown
does not explain, nor do we understand, how this information is relevant in determining whether
Jeans had the authority to represent Dr. Misenhimer in the underlying litigation. Further,
although nothing in the policy or the law expressly prevents Dr. Misenhimer from retaining
personal counsel to investigate and, if necessary, pursue coverage and bad-faith claims against
Medicus, those issues are peripheral ones and ultimately irrelevant in deciding Brown’s motion to
show authority.
By accepting Brown’s position, the focus on the pivotal issue was obscured. That issue
was whether Jeans had the authority to represent Dr. Misenhimer in the underlying litigation.
Jeans met his burden by producing two affidavits indicating he had such authority. Given there
was no controverting evidence, the affidavits conclusively established Jeans’s authority. The
evidence was sufficient to rule on Brown’s motion to show authority in favor of Jeans, and it was
unnecessary to obtain Sassin’s testimony on irrelevant matters to resolve Brown’s motion.
Accordingly, we conclude the trial court abused its discretion in denying Sassin’s motions to quash
notice of his deposition and for a protective order. Therefore, because Sassin is a non-party, he
has no right to appeal, and therefore no adequate appellate remedy.
5
The insurance policy in question provides that:
No insured covered under this policy shall admit any liability, make any voluntary payments or
assume any obligation without the Company’s written authorization. Doing so will result in the
Company denying reimbursement of the payment even though the cost may be otherwise covered
by this policy. [Emphasis in orig.].
9
We sustain Sassin’s issue.
CONCLUSION
We conditionally grant Sassin’s petition for writ of mandamus and direct the trial court to
vacate its order dated September 19, 2012 denying Sassin relief. Mandamus will issue only if the
trial court fails to comply.
July 11, 2014
YVONNE T. RODRIGUEZ, Justice
Before McClure, C.J., Rivera, and Rodriguez, JJ.
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