In Re Jeffrey Kittle and Kittle Property Group, Inc. v. the State of Texas ( 2024 )

Opinion issued July 18, 2024
In The
Court of Appeals
For The
First District of Texas
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NO. 01-24-00462-CV
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IN RE JEFFREY KITTLE, KITTLE PROPERTY GROUP, INC., AND THE
VIREO APARTMENTS, LP, Relators
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
In this original proceeding, relators Jeffrey Kittle, Kittle Property Group,
Inc., (collectively, Kittle) and The Vireo Apartments, LP, seek mandamus relief
from the trial court’s order compelling discovery of net worth evidence.1 Kittle
1
Respondent is the Honorable Lauren Reeder, Presiding Judge of the 234th District
Court of Harris County. The underlying case is Chance Willis and Christopher
Okray v. The Vireo Apartments, LP, Kittle Property Group, Inc., Herman and
Kittle Properties Inc., and Jeffrey Kittle, Cause No. 2023-37572 (234th Dist. Ct.,
Harris Cnty., Tex.).
and Vireo maintain that the trial court’s order constitutes a clear abuse of discretion
and warrants mandamus relief.
We agree and conditionally grant relief.
Background
In the underlying suit, real party in interest Chance Willis alleges that he was
shot twice in the chest by a resident of The Vireo Apartments, located on Tidwell
Road in Houston.2 Willis and his brother, real party in interest Christopher Okray,
assert that, prior to the shooting, Kittle and Vireo were aware that violent criminal
activity frequently occurred in close proximity to the apartments, that numerous
criminal acts had been committed against Vireo residents, and that the resident
who shot Willis had engaged in multiple acts of violent criminal conduct against
other residents and guests at the property. They further allege that Kittle and Vireo
failed to provide adequate security and failed to take reasonable steps to mitigate
the risk of harm.
Willis and Okray’s asserted claims against Kittle and Vireo include gross
negligence and common nuisance,3 for which they seek exemplary damages.4
2
During the relevant time, Vireo was owned by The Vireo Apartments, LP and
managed by Kittle Property Group, Inc., of which Jeffrey Kittle was an officer and
director.
3
See TEX. CIV. PRAC. & REM. CODE § 125.0015(b) (“A person maintains a common
nuisance if the person maintains a multiunit residential property to which persons
habitually go to commit [certain criminal acts]” and “knowingly tolerates the acts
and furthermore fails to make reasonable attempts to abate the acts”).
2
Willis and Okray moved to conduct net worth discovery from Kittle and
Vireo. They sought to compel the production of balance sheets and income
statements for the years 2019 through 2023. In their motion, Willis and Okray
assert that there is a substantial likelihood they will prevail on their claims.
On June 10, 2024, after a hearing, the trial court issued an order granting the
motion to compel. The order states in its entirety:
After considering [Willis and Okray’s] Motion to Conduct Net Worth
Discovery and to Compel Production of Responsive Documents from
[Kittle and Vireo], the Court GRANTS the Motion. [Kittle and Vireo]
are hereby ORDERED to comply with [Willis and Okray’s] Motion to
Conduct Net Worth Discovery and to Compel Production of
Responsive Documents from [Kittle and Vireo].
Kittle and Vireo now seek mandamus relief in this Court.5
Standard of Review
Mandamus is an extraordinary remedy that will issue only when (1) a trial
court clearly abuses its discretion and (2) the relator lacks an adequate remedy by
appeal. In re Kappmeyer, 668 S.W.3d 651, 654 (Tex. 2023) (orig. proceeding). “A
trial court clearly abuses its discretion if it reaches a decision so arbitrary and
unreasonable as to constitute a clear and prejudicial error of law.” Walker v.
Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). A trial court has no
4
See id. § 41.005(b) (authorizing exemplary damages based on criminal act of
another if such act occurs at location in which defendant maintained unabated
common nuisance under Chapter 125).
5
We previously granted Kittle and Vireo’s request for temporary relief and stayed
the trial court’s June 10, 2024 discovery order.
3
discretion in determining what the law is or in applying the law to the facts. Id. at
840. Thus, a trial court’s clear failure to analyze or apply the law correctly will
constitute an abuse of discretion. Id.
Mandamus relief is available when a trial court compels production beyond
the permissible bounds of discovery. In re Weekley Homes, L.P., 295 S.W.3d 309,
322 (Tex. 2009) (orig. proceeding). The scope of discovery that a trial court
allows is reviewed for an abuse of discretion. In re CSX Corp., 124 S.W.3d 149,
152 (Tex. 2003) (orig. proceeding). When a trial court compels discovery beyond
the permissible bounds prescribed by law, there is not an adequate remedy by
appeal if the appellate court would be unable to cure the trial court’s error. Walker,
827 S.W.2d at 843.
Applicable Law
“[A] trial court may authorize discovery of evidence of a defendant’s net
worth if the court finds in a written order that the claimant has demonstrated a
substantial likelihood of success on the merits of a claim for exemplary damages.”
TEX. CIV. PRAC. & REM. CODE § 41.0115(a) (emphasis added); see In re Zhang,
No. 01-22-00856-CV, 2023 WL 3956860, at *5 (Tex. App.—Houston [1st Dist.]
2023, June 13, 2023, orig. proceeding) (mem. op.). Exemplary damages are “any
damages awarded as a penalty or by way of punishment but not for compensatory
purposes.” TEX. CIV. PRAC. & REM. CODE § 41.001(5).
4
Analysis
Here, the trial court’s June 10, 2024 order does not include the required
finding mandated by section 41.0115(a) of the Texas Civil Practice and Remedies
Code. Specifically, there is no finding that Willis and Okray have demonstrated a
substantial likelihood of success on the merits of their claim for exemplary
damages. See id. § 41.0115(a). In the absence of this statutorily required finding,
the trial court clearly abused its discretion in compelling the production of Kittle’s
and Vireo’s net worth information. See In re Zhang, 2023 WL 3956860, at *6.6
To be entitled to mandamus relief, Kittle and Vireo must lack an adequate
remedy by appeal. See In re Kappmeyer, 668 S.W.3d at 654. It is settled that
“parties lack an adequate appellate remedy from orders compelling discovery
beyond what the rules allow.” In re Millwork, 631 S.W.3d 706, 714 (Tex. 2021)
(orig. proceeding).
Here, the trial court’s order compels Kittle and Vireo to produce net worth
information without the statutorily required showing and finding. See TEX. CIV.
PRAC. & REM. CODE § 41.0115(a). Discovery that is not authorized by law cannot
6
See also In re WTG Fuels, Inc., No. 11-19-00390-CV, 2020 WL 205254, at *3
(Tex. App.—Eastland Jan. 13, 2020, orig. proceeding) (mem. op.) (in absence of
statutorily required finding, respondent could not exercise discretion to order net
worth discovery); In re Michelin N. Am., Inc., No. 05-15-01480-CV, 2016 WL
890970, at *8 (Tex. App.—Dallas Mar. 16, 2016, orig. proceeding) (mem. op.)
(section 41.0115(a) “requires a party seeking net worth discovery to first
demonstrate and obtain a finding from the trial court that there is a substantial
likelihood of success on the merits of a claim for exemplary damages”).
5
be “untaken” such that an appellate court can cure the error and enforce the
statutory scheme after trial. In re Jordan, 249 S.W.3d 416, 419–20 (Tex. 2008)
(orig. proceeding). Kittle and Vireo therefore lack an adequate remedy by appeal.
See In re Millwork, 631 S.W.3d at 714.
Conclusion
We conditionally grant mandamus relief and direct the trial court to vacate
its June 10, 2024 discovery order.7 A writ will issue only if the trial court fails to
comply. We also lift the stay entered on June 21, 2024, and deny all pending
motions. See TEX. R. APP. P. 52.10(b).
Terry Adams
Chief Justice
Panel consists of Chief Justice Adams and Justices Kelly and Goodman.
7
Willis and Okray have filed a motion with our Court “recogniz[ing] that the trial
court’s order allowing net worth discovery does not contain the findings required
by section 41.0115(a)” and asking us to abate this proceeding “[to] give the trial
court the opportunity to enter a new order” that complies with section 41.0115(a).
But their unverified motion does not state that the trial court actually intends to
issue a new order—or even that any request for it to do so has been made. Stated
differently, Willis and Okray seek to moot this mandamus proceeding without any
basis. See In re Ryder-Integrated Logistics, Inc., No. 04-12-00766-CV, 2013 WL
618745, at *1 (Tex. App.—San Antonio Feb. 20, 2013, orig. proceeding) (mem.
op.) (original proceeding is moot when order relator attacks has been replaced);
see also In re Dow Hamm III Corp., No. 01-08-00235-CV, 2009 WL 2232009, at
*1 (Tex. App.—Houston [1st Dist.] July 23, 2009, orig. proceeding) (mem. op.).
Given Willis and Okray’s concession and the unsupported nature of their request,
we deem it to be without merit. See TEX. R. APP. P. 10.1(b).
6