IN THE
TENTH COURT OF APPEALS
No. 10-94-029-CV
SAFECO INSURANCE COMPANY OF AMERICA,
Relator
v.
HONORABLE WAYNE BRIDEWELL, JUDGE,
249TH DISTRICT COURT, JOHNSON COUNTY,
TEXAS,
Respondent
Original Proceeding
O P I N I O N
This mandamus action involves discovery of allegedly privileged documents and whether the trial judge should sever and abate a bad-faith cause of action brought by an insured against his underinsured motorist carrier until the underlying contract action can be tried and appealed to a conclusion. Because we find that the discovery order was within the court's discretion and find that the Relator has an adequate remedy by appeal, we decline to issue the writ.
We granted leave for Safeco Insurance Company of America to file a petition for writ of mandamus seeking relief from orders entered by the Honorable Wayne Bridewell (1) denying a motion for a severance and abatement and (2) ordering, after an in camera inspection, production of certain documents which Safeco describes as "privileged." See Tex. Gov't Code Ann. § 22.221(a) (Vernon 1988); Tex. R. App. P. 121(d). Relator is a defendant in a suit in the 249th Judicial District Court brought by the real parties in interest, Ernest T. Wightman and Dorothy Wightman, Individually and on behalf of the Estate of Jennifer Leigh Wightman, alleging causes of action in contract and tort arising out of the uninsured motorist coverage provisions of an insurance policy issued by Safeco to the Wightmans. Safeco sought to sever the tort claims from the contract claims and to abate the severed tort action pending resolution of the contract claims, alleging that a combined trial of the differing claims will unfairly prejudice it. Respondent denied the motion to sever and abate, an action that Safeco claims was an abuse of discretion. Safeco also claims that Respondent abused his discretion by ordering production of the documents.
Safeco filed a supplement to its petition, taking into account a February 24 separate trial order but continuing to claim that it will be irreparably harmed unless the bad-faith tort claims are abated until the underlying contract action is tried "to its conclusion," i.e., until all appeals have been exhausted. Safeco asserts that, if the bad-faith claims are tried first, the contested documents regarding the Wightmans' claims would have been disclosed and could then be used against it in the contract case. The documents include the original claims file and documentation showing events that led to the denial of the claim. Safeco acknowledges that they are discoverable for purposes of the bad-faith claims. Safeco further alleges that irreparable harm will occur because the jury in the bad-faith suit will learn that the trial court had denied its limitations defense when it denied the company's motion for summary judgment.
FACTUAL BACKGROUND
The Wightmans sued Safeco for underinsured motorist's benefits (UIM claim) as a result of the death of their daughter in an automobile accident with a drunk driver that occurred in September 1987. The Wightmans had requested permission from Safeco to settle with the other driver's insurance carrier for policy limits of $25,000. The adjuster handling the UIM claim for Safeco, Norman Kessel, refused to either grant or deny permission to settle the claim against the third party because Safeco took the position that the claim was barred by the statute of limitations. Kessel not only denied permission to settle and denied the validity of their UIM claim but also threatened in writing to sue the Wightmans for filing a frivolous suit if they insisted on pursuing their UIM claim. The basis for the Wightmans' bad-faith suit is (1) that Safeco had no reasonable basis for denying their UIM claim and knew or should have known that limitations was not a bar and (2) intentional infliction of mental anguish by Kessel in handling their claim. Safeco made an offer to the Wightmans to settle their "claims" for $100,000. The Wightmans' policy limits on their UIM coverage is $500,000.
STANDARD OF REVIEW
Mandamus is the proper remedy to correct the violation of a duty imposed by law when there is no other adequate legal remedy. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding). On mandamus review of a trial court's determination of legal principles, clear failure by the court to analyze or apply the law correctly will constitute an abuse of discretion that may result in appellate reversal. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). In determining whether the trial court abused its discretion in allowing the discovery sought and in declining to sever and abate the bad-faith claims, we will treat both decisions as legal conclusions to be reviewed with limited deference to the trial court. See id. at 840. According to this analysis, a clear abuse of discretion will be found if the trial court's interpretation of the law was erroneous. Id.
To determine whether the writ should issue, we must also determine whether Relator has an adequate remedy by appeal. Id. Mandamus will not issue where a clear and adequate remedy at law, such as a normal appeal, exists. TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 919 (Tex. 1991) (orig. proceeding). Cost or delay of having to go through the trial and appellate process does not make the remedy at law inadequate. Walker, 827 S.W.2d at 842 (citing Hooks v. Fourth Court of Appeals, 808 S.W.2d 56, 59-60 (Tex. 1991)). "Without this limitation, appellate courts would `embroil themselves unnecessarily in incidental pre-trial rulings of the trial courts and mandamus `would soon cease to be an extraordinary writ.'" Id. (citing Braden v. Downey, 811 S.W.2d 922, 928 (Tex. 1991)). "Interference is justified only when the parties stand to lose their substantial rights." Id. (citing Iley v. Hughes, 158 Tex. 362, 311 S.W.2d 648 (1958)).
SEVERANCE AND ABATEMENT
On the same day that the application for leave to file the petition was filed in this court, Respondent signed an order directing separate trials of the contract and tort claims but did not specify which claims would be tried first. The parties agree that, in this instance, the separate-trials order is the functional equivalent of a severance. Whether an order directing the Respondent to try the contract claims first is the functional equivalent of abating a separate case containing the tort claims is not clear, but we need not reach that question. The Wightmans have represented to this court that the contract claims will be tried first, and our disposition of the severance-abatement question is based on that representation. The question of severance is now moot as a result of the separate-trials order and the Wightmans' representations that the contract claims will be tried before the tort claims.
Relator says that we should order Respondent not to try the tort claims until after the judgment on the contract claims has become final because, otherwise, its limitations defense will be compromised. We disagree. Safeco's initial petition stressed its position that a joint trial of the contract and tort claims would prejudice it because its settlement offer would be admissible on the tort claims—and thus considered by the jury on the contract claims—whereas it would not be admissible on the contract claims tried alone. After Respondent ordered separate trials, Safeco's supplemental petition stressed that its defense to the tort claims based on the statute of limitations would be compromised even if the claims were tried separately.
As previously summarized, mandamus is intended to be an extraordinary remedy and will not issue where an adequate remedy at law, such as a normal appeal, is available. Id. at 839-40. A remedy by appeal is not inadequate merely because it may entail more expense or delay than obtaining an extraordinary writ. Id. Interference is called for only when the parties stand to forfeit substantial rights. Id. Because tort claims involving intentional infliction of mental anguish—claims that do not involve the statute of limitations defense—will survive any result reached in the contract-based trial and because the limitations defense can readily be reviewed on direct appeal, Safeco has failed to establish that appeal is not an adequate remedy. Cost or delay of having to go through the trial and appellate process does not make the remedy at law inadequate; Safeco's claim of prejudice based on its limitations defense does not warrant the remedy of mandamus. Id. at 842.
PRIVILEGED DOCUMENTS
A determination of discoverability under the party communications privilege, Rule 166b(3)(d) of the Rules of Civil Procedure, is within the court's discretion. Tex. R. Civ. P. 166(3)(d). Safeco failed to prove that Respondent could reasonably have made but one decision. See Walker, 827 S.W.2d at 840. Even if we might have decided the question differently, we cannot disturb Respondent's decision unless it is shown to be arbitrary and unreasonable. See Johnson, 700 S.W.2d at 918. The statement of facts on the Wightmans' motion to compel discovery of the documents submitted in camera reveals that Safeco produced no evidence in the trial court, either by testimony or by affidavit, to substantiate any claim for party communications privilege—the claim upon which Safeco's petition for mandamus is based. It raised only the work-product and attorney-client privileges in a letter brief. For the documents to be protected on their face by the attorney-client privilege, they would have to conclusively show that the communications were between the attorney and members of a "control group." See National Tank v. Brotherton, 851 S.W.2d 193, 197-99 (Tex. 1993) (orig. proceeding). As to attorney work product, the documents must show that they are the product of Safeco's attorney or a representative of the attorney and each document on its face must reflect that it was made in anticipation of litigation or for the furtherance of the defense of the litigation. See id. at 201-03. The trial court is not required to carry Safeco's burden. See Weisel Enterprises, Inc. v. Curry, 718 S.W.2d 56, 58 (Tex. 1986) (orig. proceeding). In this instance, all the court had before it was a global allegation of privilege and the documents themselves. Because the documents raise a question of privilege rather than proving privilege as a matter of law, Respondent's decision that they be produced was within his discretion. See id. at 60.
CONCLUSION
Because Relator has an adequate remedy by appeal for any error that may result from its defense based on the statute of limitations in the separate trial of the tort claims and because it has not demonstrated that Respondent abused his discretion in ordering that the disputed documents are discoverable, we deny the petition for writ of mandamus.
BILL VANCE
Justice
Before Justice Cummings,
Justice Vance, and
Justice John A. James (Retired)
Petition for writ of mandamus denied
Order issued and filed March 16, 1994
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