In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-14-00068-CV
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IN RE MID CENTURY INSURANCE COMPANY OF TEXAS
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Original Proceeding
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MEMORANDUM OPINION
Relator, Mid Century Insurance Company of Texas, requested mandamus
and temporary relief from an order of the 60th District Court of Jefferson County,
Texas. The order compelled counsel for the driver of a vehicle insured by a policy
issued by Relator to produce his complete defense file from the underlying
litigation to the representative of the driver’s estate in subsequent litigation
between Relator and the assignees of the insureds’ claims against Relator. We
stayed the trial court’s order and requested a response from the real parties in
interest. After reviewing the mandamus petition, the mandamus record, and the
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response of the real parties in interest, Billie Hebert and Horace Hebert, we lift our
stay order and deny mandamus relief.
An insurance policy issued to Tammy Hanusch and Eric Hanusch covered a
vehicle driven by Robert Conrad in an accident that injured the Heberts. The
Heberts offered to settle for policy limits, but ultimately filed suit. See generally
Conrad v. Hebert, 01-09-00331-CV, 2010 WL 2431461, at *1-4 (Tex. App.—
Houston [1st Dist.] June 17, 2010, pet. denied) (mem. op.) (describing settlement
dispute). The personal injury litigation resulted in a judgment in excess of policy
limits. The trial court issued a turnover order for the dependent administrator of
Conrad’s estate to turn over any assignable causes of action to the Heberts. The
active litigation concerning this matter includes Relator’s declaratory judgment
action consolidated with a Stowers claim asserted by the Heberts under the
assignments of Conrad’s claims against Relator. See generally G.A. Stowers
Furniture Co. v. Am. Indem. Co., 15 S.W.2d 544, 548 (Tex. Comm’n App. 1929,
holding approved). The Heberts obtained an assignment of the right to waive any
attorney-client or work product privileges, then sought the attorney’s defense file
through subpoena duces tecum and moved to compel his compliance. The attorney
produced the file and privilege log in camera. On February 4, 2014, the trial court
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granted the motion to compel and ordered that the file be turned over to the
administrator of Conrad’s estate.
Relator contends the file is not relevant to the litigation and contains
attorney work product and privileged communications between defense counsel
and Relator. The attorney commenced representation after the settlement demand
deadline expired, but the documents in the file explain the evaluation of the claim
covered by the policy. The trial court could reasonably have concluded that the
Heberts’ request for the litigation file was reasonably calculated to lead to the
discovery of admissible evidence and shows a reasonable expectation of obtaining
information that will aid in the dispute’s resolution. See Tex. R. Civ. P. 192.3; see
also In re CSX Corp., 124 S.W.3d 149, 152 (Tex. 2003) (orig. proceeding).
Relator contends the file contains confidential communications between
counsel and a representative of the client and contains core work product of the
attorney. See Tex. R. Evid. 503(b)(1); see also Tex. R. Civ. P. 192.5(b). The
Heberts do not challenge the privileged nature of the documents in the file but
argue that the privileges belong to Conrad and have been waived through the
assignments of claims. See In re Gen. Agents Ins. Co. of Am., Inc., 224 S.W.3d
806, 812-14 (Tex. App.—Houston [14th Dist.] 2007, no pet.). Relator contends
that Conrad’s waiver of privileges could not affect any privileges Relator possesses
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by virtue of the tripartite relationship between counsel, the insured, and the insurer.
For authority Relator relies on the Texas Supreme Court’s statement that “we have
never held that an insurance defense lawyer cannot represent both the insurer and
the insured, only that the lawyer must represent the insured and protect his interests
from compromise by the insurer.” Unauthorized Practice of Law Comm. v. Am.
Home Assurance Co., 261 S.W.3d 24, 42 (Tex. 2008) (emphasis in original); but
see Employers Cas. Co. v. Tilley, 496 S.W.2d 552, 558-59 (Tex. 1973) (the
attorney’s unqualified loyalty belongs to the insured); see also In re XL Specialty
Ins. Co., 373 S.W.3d 46 (Tex. 2012).
Relator essentially argues for an extension of existing law to establish an
abuse of discretion by the trial court. “A trial court abuses its discretion if it acts in
an arbitrary or unreasonable manner, without reference to any guiding rules or
principles.” In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (citing
Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)).
However, the trial court did not disregard established rules and principles when it
declined to recognize the insurance company’s assertion of privilege in the face of
the insured’s assignment of the Stowers claim and the right to waive attorney-client
and work product privileges. See Gen. Agents, 224 S.W.3d at 814.
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Relator is not entitled to mandamus relief because it failed to establish an
abuse of discretion by the trial court. We lift our temporary order staying the trial
court’s order compelling production and deny the petition for writ of mandamus.
PETITION DENIED.
PER CURIAM
Submitted on February 24, 2014
Opinion Delivered March 13, 2014
Before McKeithen, C.J., Kreger and Johnson, JJ.
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