in Re Interinsurance Exchange of the Automobile Club

Opinion issued January 12, 2016
In The
Court of Appeals
For The
First District of Texas
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NO. 01-14-00979-CV
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IN RE INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB,
Relator
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION1
In this original proceeding, Relator Interinsurance Exchange of the
Automobile Club (“Auto Club”), seeks mandamus relief from the trial court’s
November 25, 2014 order compelling production of reports submitted to it by its
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The underlying case is John Amponsah and Melanie Amponsah v. AAA Texas
County Mutual Insurance company, AAA Texas, LLC, AAA Texas, and AAA Texas
Interinsurance Exchange of the Automobile Club, No. 13-DCV-203651, in the
240th District Court of Fort Bend County, the Honorable Thomas R. Culver, III,
presiding.
retained engineer, Derrick S. Hancock, between the years 2000 and 2012, all of
which relate to insurance claims other than the one at issue in this case. We
conditionally grant mandamus relief.
Background
Real Parties in Interest, John and Melanie Amponsah, held a homeowner’s
policy with Auto Club. In 2012, they made a claim under that policy due to
foundation problems with their home. Auto Club denied the claim based on the
finding of its expert, Hancock, that the foundation problems were the result of
settling rather than a plumbing leak. The Amponsahs sued Auto Club and other
entities, claiming fraud, conspiracy to commit fraud, breach of contract, negligent
misrepresentation, gross negligence, and violations of the Deceptive Trade
Practices Act and Insurance Code.
The Amponsahs initially sought discovery of information relating to every
expert hired by Auto Club in connection with every foundation claim it handled
between 2000 and 2013. After the trial court severed the Amponsahs’ extra-
contractual claims from the breach of contract claim, it instructed the parties to
redraft their discovery requests to focus on the breach of contract claim alone.
The Amponsahs deposed Hancock, who testified that he had performed
more than fifty evaluations of claims for Auto Club, that he understood his
evaluations would be used by Auto Club to determine coverage, and that he found
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the damage was caused by settling, rather than plumbing leaks, in approximately
70 to 80% of the foundation damage cases he handled for Auto Club. The day
after the deposition, the Amponsahs served additional discovery requesting
“[e]very report with Mr. Hancock’s name on it, that Mr. Hancock submitted to any
person with [Auto Club].” Auto Club objected to the request on the ground that it
was overly broad, unduly burdensome, and an impermissible fishing expedition.
The Amponsahs moved to compel, arguing that the information was necessary to
prove bias.
At a hearing on August 6, 2014, an associate judge granted the motion to
compel. Auto Club appealed to the district court judge, who limited the temporal
scope of the document request by one year, but nevertheless compelled Auto Club
to produce every report Hancock provided to Auto Club between the years 2000
and 2012.
Auto Club asserts that the district court abused its discretion by ordering this
discovery because the reports other than those relating to the Amponsahs’ claim
are irrelevant to the breach of contract issue and, at most, constitute extrinsic
evidence of bias that is inadmissible in light of Hancock’s deposition testimony.
The Amponsahs maintain the documents are necessary to (1) demonstrate whether
Hancock applied acceptable methodology in evaluating the Amponsahs’ claim, and
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(2) show bias, which is always at issue under Texas Rule of Civil Procedure
192.3(e)(5).
Discussion
A. Standard of Review
To be entitled to mandamus relief, a relator must demonstrate that (1) the
trial court clearly abused its discretion and (2) the relator has no adequate remedy
by appeal. In re Reece, 341 S.W.3d 360, 364 (Tex. 2011) (orig. proceeding). A
trial court clearly 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 the law correctly or apply the law correctly to the facts. In re
Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding)
(per curiam). A discovery order that compels production beyond the rules of civil
procedure is an abuse of discretion for which mandamus is the proper remedy. In
re Nat’l Lloyds Ins., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding) (per
curiam) (citing In re Deere & Co., 299 S.W.3d 819, 820 (Tex. 2009) (orig.
proceeding) (per curiam)).
B. Applicable Law
The rules of civil procedure define the scope and methods of expert witness
discovery. See TEX. R. CIV. P. 192.3(e); In re Ford Motor Co., 427 S.W.3d 396,
397 (Tex. 2014) (orig. proceeding) (per curiam). The scope of information that a
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party may discover about testifying expert witnesses includes facts known by the
expert forming the basis of his mental impressions and opinions, the expert’s
mental impressions formed in connection with the case and the methods used to
derive them, and “any bias of the witness.” TEX. R. CIV. P. 192.3(e). It is not a
ground for objection “that the information sought will be inadmissible at trial if the
information sought appears reasonably calculated to lead to the discovery of
admissible evidence.” TEX. R. CIV. P. 192.3(a); In re Nat’l Lloyds Ins., 449 S.W.3d
486 at 488.
However, even these liberal discovery parameters have limits, and discovery
requests must not be overbroad. In re Nat’l Lloyds Ins., 449 S.W.3d at 488. Overly
broad and expansive discovery requests are particularly troublesome when directed
at testifying expert witnesses because such discovery requests can “permit
witnesses to be subjected to harassment and might well discourage reputable
experts” from participating in the litigation process. In re Ford Motor Co., 427
S.W.3d at 397. Overbroad requests are improper whether they are burdensome or
not. In re Nat’l Lloyds Ins., 449 S.W.3d at 488.
Bias, in its usual meaning, is an inclination toward one side of an issue
rather than to the other. See Compton v. Henrie, 364 S.W.2d 179, 182 (Tex. 1963).
Proof of bias on the part of an expert witness may be offered to impeach the
expert’s credibility. TEX. R. EVID. 613(b). However, “[c]ourts have recognized
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that discovery into the extent of an expert’s bias is not without limits.” In re Ford
Motor Co., 427 S.W.3d at 397. And the Texas Supreme Court has reasoned that
the most probative information regarding the bias of a testifying expert comes from
the testimony of the experts themselves. Id. at 398.
C. Analysis
We conclude that the district court abused its discretion in ordering Auto
Club to produce Hancock’s reports other than the report addressing the
Amponsahs’ claim.
Contrary to the Amponsahs’ contention, the content of the reports provided
by Hancock to Auto Club on claims other than the Amponsahs’ claim is not
relevant to the Amponsahs’ breach of contract claim. The Amponsahs contend that
whether Hancock applied acceptable methodology and evaluated the cause of the
Amponsahs’ foundation failure in accordance with scientific method can only be
determined by examining reports he has made in other cases. But the Texas
Supreme Court has recently rejected this very argument in a strikingly similar case.
In In re National Lloyds Insurance Company, 449 S.W.3d 486 (Tex. 2014), the
insured, Erving, claimed that National Lloyds breached its insurance contract by
underpaying her property damage claims after storms damaged her home in Cedar
Hill, Texas. Id. at 488. Erving sought all claim files of three individual adjusters
for the preceding six years and all claim files of two adjusting firms for the past
6
year. Id. “Erving . . . proposed to compare National Lloyds’ evaluation of the
damage to her home with National Lloyds’ evaluation of the damage to other
homes to support her contention that her claims were undervalued.” Id. at 489.
The trial court ordered production of the files for claims handled by the two
adjusting firms, but limited the claims to those involving properties in Cedar Hill
that were damaged by the storms. Id. at 488.
The appellate court denied National Lloyds’ request for mandamus relief,
but the Texas Supreme Court granted relief, noting that it “fail[ed] to see how
National Lloyds’ overpayment, underpayment, or proper payment of the claims of
unrelated third parties is probative of its conduct with respect to Erving’s
undervaluation claims at issue in this case.” Id. at 489. The Supreme Court
continued, “this is especially so given the many variables associated with a
particular claim, such as when the claim was filed, the condition of the property at
the time of filing (including the presence of any preexisting damage), and the type
and extent of damage inflicted by the covered event.” Id. In other words,
“[s]couring claim files in hopes of finding similarly situated claimants whose
claims were evaluated differently from Erving’s” in order to prove that National
Lloyds breached the contract by underpaying her “[was] at best an ‘impermissible
fishing expedition.’” Id. (quoting Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815
(Tex. 1995) (per curiam)).
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Likewise, here, each report prepared by Hancock would be affected by
“many variables associated with [that] particular claim, such as when the claim
was filed, the condition of the property at the time of filing (including the presence
of any preexisting damage),” and other factors. See id. These are unique to each
claim and have no bearing on whether the damage to the Amponsahs’ house was
actually caused by settling versus a leak. Accordingly, the reports are not
discoverable on the theory that they are evidence that may support their breach of
contract claim. Id.
The Amponsahs also contend that the reports are discoverable because they
are evidence that proves Hancock’s bias. But the Amponsahs have already
questioned Hancock about his potential bias. As the Texas Supreme Court
explained in In re Ford Motor Company, 427 S.W.3d 396 (Tex. 2014), “discovery
into the extent of an expert’s bias is not without limits.” Id. at 397. In In re Ford,
the defendant Ford Motor Company’s two testifying experts were questioned about
the percentage of cases in which they had testified for a plaintiff and about the
percentage of the total expert testimony that they had provided that was for Ford
Motor Company. Id. at 398. But the Supreme Court held that further discovery of
“all cases the [experts] have handled for Ford or any other automobile
manufacture” over a 12-year period was an impermissible “fishing expedition,”
and disallowing it did not unduly inhibit discovery of the experts’ potential bias.
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Id. at 397–98. The Supreme Court noted that the plaintiff already had the “most
probative information regarding the bias of a testifying expert”—testimony from
the experts themselves. See id. at 398.
Similarly, here, Hancock testified in his deposition about the number of
foundation evaluations he has performed for Auto Club, and further testified that
he found that settling rather than plumbing leaks caused the foundation problems
in 70 to 80 percent of the claims he has evaluated. This testimony is similar to the
expert testimony in In re Ford that the Supreme Court described as the most
probative type of evidence regarding bias because it came from Hancock himself.
See id. Likewise, the reports the Amponsahs seek to discover are analogous to the
additional discovery requested in In re Ford—“all cases the [experts] have handled
for Ford or any other automobile manufacturer” over a 12-year period—that was
disallowed by the Supreme Court. Id. at 397 (restricting additional discovery did
not unduly inhibit discovery of experts’ potential bias because direct evidence from
experts was most probative evidence). Accordingly, the reports are not
discoverable to show bias. See In re Ford, 427 S.W.3d at 397–98.
Conclusion
The trial court abused its discretion in compelling discovery of Hancock’s
reports relating to claims other than the Amponsahs’ claim that Hancock provided
to Auto Club between 2000 and 2012. Because Auto Club would be forced to
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produce these reports before an appeal is available, it has no adequate remedy at
law and is entitled to mandamus relief. See In re Dana Corp., 138 S.W.3d 298,
301 (Tex. 2014) (orig. proceeding) (per curiam).
We lift our stay and conditionally grant mandamus relief. We direct the trial
court to vacate its November 25, 2014 Order Denying Defendants’ Appeal of
Order Granting Plaintiffs’ Motion to Compel Reports by Retained Testifying
Expert, and Denying Defendants’ Motion For Protective Order. We also direct the
trial court to vacate its August 6, 2014 Order Granting Plaintiffs’ Motion to
Compel Reports by Retained Testifying Expert. We are confident the trial court
will comply, and our writ will issue only if it does not.
All pending motions are dismissed as moot.
Rebeca Huddle
Justice
Panel consists of Justices Jennings, Higley and Huddle.
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