300 S.W.3d 35 (Tex.App.-Houston [14 Dist.] 2009)
In re Mark A. JACOBS, M.D., Debra C. Gunn, M.D.,
and Obstetrical and Gynecologist Associates, P.A.,
Relators.
No. 14-09-00123-CV.
Court of Appeals of Texas, Fourteenth District,
Houston.
October 20, 2009
Panel consists of Justices BROWN, BOYCE, and
SULLIVAN.
MAJORITY OPINION
JEFFREY V. BROWN, Justice.
In this original proceeding, the relators, Mark A.
Jacobs, M.D., Debra C. Gunn, M.D., and Obstetrical and
Gynecologist Associates, P.A., seek a writ of mandamus
ordering the Honorable Mike Wood, presiding judge of
Probate Court No. 2 of Harris County, to set aside his two
orders of January 23, 2009-one compelling the deposition
of Dr. Jacobs and one compelling net-worth discovery for
the past two years-and his order of January 30, 2009,
clarifying the two January 23 orders. We conditionally
grant the petition in part and deny it in part.
I
Real parties in interest, Andre McCoy, Individually
and as Permanent Guardian of Shannon Miles McCoy, an
Incapacitated Person (the ” McCoys” ), have sued the
relators and others [1] for negligence and gross
negligence in providing medical care and treatment to
Shannon while she was an obstetrical patient at Woman’s
Hospital of Texas from September 13, 2004 to September
14, 2004. On November 16, 2007, the McCoys served the
relators with requests for discovery of net-worth
information. When the relators objected to the requests
for production, the McCoys filed a motion to compel
discovery.
Page 39
On January 23, 2009, the trial court held a hearing
and signed an order directing the McCoys to amend their
pleadings to provide more specific allegations of gross
negligence against the relators following the completion
of the depositions of Dr. Jacobs and Dr. Gunn. Subject to
the filing of a sufficient pleading as to gross negligence,
the trial court further ordered the relators to produce ” the
actual financial statements they have provided to a lender
within the past two (2) years that identifies the assets and
liabilities of each Defendant.” Alternatively, if the
relators had not submitted any such financial statement to
a lender within the two years preceding the date of the
order, the court ordered each relator to:
(i) Produce an affidavit swearing that no such financial
statement has actually been submitted to a lender in the
past two (2) years; and
(ii) Produce an affidavit under oath in the format of what
would have been provided to a lender as to net worth.
The order directed that the relators produce such
net-worth information no later than thirty days after the
McCoys sufficiently pleaded gross negligence. In the
order, Judge Wood also prohibited the McCoys from
seeking to compel any additional responses to their
outstanding net-worth discovery requests, and announced
that any net-worth information provided to the McCoys
would be ” safeguarded by a protective order.” On
January 23, Judge Wood signed another order granting
the McCoys’ motion to compel the deposition of Dr.
Jacobs, and directed that the deposition may not exceed
three hours on the record.
On January 26, the relators filed a motion to clarify
the order regarding the discoverability of net worth. The
relators stated they did not understand when to produce
the net-worth information to comply with the order and
requested the trial court to so specify. Also, the relators
requested a written order on what net-worth matters, if
any, the McCoys would be allowed to cover during the
depositions of Dr. Jacobs and Dr. Gunn.
On January 30, the trial court signed an order
clarifying its prior orders regarding the discoverability of
net-worth information. The trial court directed the
relators to produce the information by February 6, 2009,
and ruled that the McCoys would be permitted to depose
Dr. Gunn and Dr. Jacobs about their net worth.
In their petition, the relators argue that the trial
court abused its discretion with respect to the orders of
January 23 and 30 by directing the relators to (1) produce
net-worth information for the past two years in the form
of actual financial statements they have provided to
lenders; (2) create a net-worth document in the format of
what would have been provided to a lender; and (3)
present Dr. Jacobs and Dr. Gunn for deposition regarding
their net worth without any temporal or subject-matter
limitations. The relators further assert they have no
adequate remedy by appeal because their rights to due
process and privacy are in jeopardy of being permanently
lost or compromised.
II
To be entitled to the extraordinary relief of a writ
of mandamus, the relator must show that the trial court
clearly abused its discretion and he has no adequate
remedy by appeal. In re Team Rocket, L.P., 256 S.W.3d
257, 259 (Tex.2008) (orig. proceeding). The party
resisting discovery bears the heavy burden of establishing
an abuse of discretion and an inadequate remedy by
appeal. In re CSX Corp., 124 S.W.3d 149, 151
(Tex.2003) (orig. proceeding) (per curiam). A trial court
abuses its discretion if it reaches a
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decision so arbitrary and unreasonable as to constitute a
clear and prejudicial error of law, or if it clearly fails to
correctly analyze or apply the law. In re Cerberus
Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex.2005)
(orig. proceeding) (per curiam); Walker v. Packer, 827
S.W.2d 833, 839 (Tex.1992) (orig. proceeding).
Whether a clear abuse of discretion can be
adequately remedied by appeal depends on a careful
analysis of costs and benefits of interlocutory review. In
re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464
(Tex.2008) (orig. proceeding). Because this balance
depends heavily on circumstances, it must be guided by
analysis of principles rather than simple rules that treat
cases as categories. Id. ” Mandamus review of significant
rulings in exceptional cases may be essential to preserve
important substantive and procedural rights from
impairment or loss, allow the appellate courts to give
needed and helpful direction to the law that would
otherwise prove elusive in appeals from final judgments,
and spare private parties and the public the time and
money utterly wasted enduring eventual reversal of
improperly conducted proceedings.” In re Prudential Ins.
Co. of Am., 148 S.W.3d 124, 136 (Tex.2004) (orig.
proceeding); see also In re Columbia Med. Ctr. of Las
Colinas, Subsidiary, L.P., 290 S.W.3d 204, 207
(Tex.2009) (orig. proceeding) (” Used selectively,
mandamus can ‘ correct clear errors in exceptional cases
and afford appropriate guidance to the law without the
disruption and burden of interlocutory appeal.’ ” )
(quoting In re Prudential, 148 S.W.3d at 138). Thus, in
determining whether appeal is an adequate remedy, we
consider whether the benefits of mandamus review
outweigh the detriments. In re BP Prods. N. Am., Inc.,
244 S.W.3d 840, 845 (Tex.2008) (orig. proceeding).
Appeal is not an adequate remedy when the appellate
court would not be able to cure the trial court’s discovery
error. In re Dana Corp., 138 S.W.3d 298, 301 (Tex.2004)
(per curiam) (orig. proceeding); In re Kuntz, 124 S.W.3d
179, 181 (Tex.2003) (orig. proceeding).
A
The relators assert the trial court abused its
discretion by ordering them to produce their net-worth
information to the McCoys. A defendant’s net worth is
relevant in a suit involving exemplary damages. Lunsford
v. Morris, 746 S.W.2d 471, 473 (Tex.1988) (orig.
proceeding), overruled on other grounds, Walker, 827
S.W.2d at 842; Miller v. O’Neill, 775 S.W.2d 56, 58
(Tex.App.-Houston [1st Dist.] 1989, orig. proceeding).
Therefore, in cases where punitive or exemplary damages
may be awarded, parties may discover and offer evidence
of a defendant’s net worth. Lunsford, 746 S.W.2d at 473.
Generally, in cases concerning the production of financial
records, the burden rests upon the party seeking to
prevent production. In re Brewer Leasing, Inc., 255
S.W.3d 708, 712 (Tex.App.-Houston [1st Dist.] 2008,
orig. proceeding [mand. denied] ); In re Patel, 218
S.W.3d 911, 916 (Tex.App.-Corpus Christi 2007, orig.
proceeding).
The relators argue the McCoys are not entitled to
discovery on net worth until they have established a
prima facie case of gross negligence. However, the Texas
Supreme Court has expressly rejected this contention. See
Lunsford, 746 S.W.2d at 473 (rejecting requirement of
prima facie showing because ” [o]ur rules of civil
procedure and evidence do not require similar practices
before net worth may be discovered” ).[2] Therefore,
under Texas law, a party seeking discovery of net-worth
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information need not satisfy any evidentiary prerequisite,
such as making a prima facie showing of entitlement to
punitive damages, before discovery of net worth is
permitted. In re House of Yahweh, 266 S.W.3d 668, 673
(Tex.App.-Eastland 2008, orig. proceeding); In re Garth,
214 S.W.3d 190, 192 (Tex.App.-Beaumont 2007, orig.
proceeding [mand. dism’d] ); In re W. Star Trucks US,
Inc., 112 S.W.3d 756, 763 (Tex.App.-Eastland 2003,
orig. proceeding); Al Parker Buick Co. v. Touchy, 788
S.W.2d 129, 131 (Tex.App.-Houston [1st Dist.] 1990,
orig. proceeding).
The relators acknowledge the Texas Supreme
Court’s express holding in Lunsford, but argue that we
should follow other jurisdictions that require a plaintiff to
demonstrate a factual basis for punitive damages before
being allowed to do net-worth discovery.[3] Even though
Lunsford is over twenty years old, the Texas Supreme
Court has not revisited this issue. [4] As an intermediate
court of appeals, we are bound by the supreme court’s
ruling in Lunsford and, therefore, we decline the relators’
invitation. See Dallas Area Rapid Transit v.
Amalgamated Transit Union Local No. 1338, 273 S.W.3d
659, 666 (Tex.2008), cert. denied, __ U.S. __, 129 S.Ct.
2767, 174 L.Ed.2d 284 (2009) (” It is fundamental to the
very structure of our appellate system that this Court’s
decisions be binding on the lower courts.” );
Page 42
Lubbock County, Tex. v. Trammel’s Lubbock Bail Bonds,
80 S.W.3d 580, 585 (Tex.2002) (” It is not the function of
a court of appeals to abrogate or modify established
precedent…. That function lies solely with this Court.” ).
In accordance with Lunsford, the McCoys are not
required to make a prima facie case, or any other
evidentiary showing, of entitlement to punitive damages
before seeking discovery of the relators’ net-worth
information.
B
The relators also argue evidence of their net worth
is not relevant because the McCoys have not alleged
sufficient facts to support their claim of gross negligence
under section 41.001(11) of the Texas Civil Practices and
Remedies Code. Section 41.001(11) defines ” gross
negligence” :
(11) ” Gross negligence” means an act or omission:
(A) which when viewed objectively from the standpoint
of the actor at the time of its occurrence involves an
extreme degree of risk, considering the probability and
magnitude of the potential harm to others; and
(B) of which the actor has actual, subjective awareness of
the risk involved, but nevertheless proceeds with
conscious indifference to the rights, safety, or welfare of
others.
Id.
The McCoys allege Dr. Jacobs and Dr. Gunn
knowingly failed to: (1) adequately and appropriately
treat Shannon’s disseminated intravascular coagulopathy
(” DIC” ) [5]; (2) appreciate the severity of Shannon’s
coagulopathy in light of abnormal lab values indicating
that she was actively bleeding and suffering from DIC;
(3) aggressively treat Shannon’s DIC with adequate blood
products and blood-volume replacement; and (4)
repeatedly order appropriate coagulation profiles and to
serially re-check Shannon’s blood work or to monitor and
evaluate her clotting factors [6] to determine how well, or
how poorly, she was responding to treatment.
The McCoys further allege Dr. Jacobs knowingly
failed to: (1) verify that his orders for blood-volume
replacement were being carried out and Shannon was
being administered blood products as ordered; and (2)
appropriately and aggressively manage Shannon’s DIC
from the outset of her admission by ordering and
administering additional units of fresh frozen plasma to
increase Shannon’s blood volume and to correct her
consumptive coagulopathy before the delivery of her
baby.
The McCoys also allege Dr. Gunn knowingly failed
to: (1) appreciate that Shannon’s DIC was depleting and
consuming her clotting factors and that if these clotting
factors were not replaced through aggressive
blood-volume replacement and clotting-factor
replacement,
Page 43
Shannon’s blood would not be able to coagulate
effectively at the time she delivered her baby; (2)
recognize and appreciate that Dr. Jacobs had undertreated
Shannon; (3) recognize, appreciate, and appropriately
respond to Shannon’s tachycardia on September 14, 2004,
by more aggressively treating her DIC; (4) order Laisix (a
diuretic medication that increases urine output) for
Shannon, even though she knew that Shannon was
suffering from DIC and actively bleeding, and did not
need to be administered a diuretic medication; (5)
recognize, appreciate, and properly respond to the fact
that Shannon’s condition was deteriorating (as evidenced
by her tachycardia (rapid heartbeat) and urine output),
and that she was developing hypovolemic shock (shock
caused by reduction in blood volume); and (6) recognize
that she was not qualified to treat and manage Shannon’s
DIC and to request the help of a more specialized
physician to treat and manage Shannon’s DIC.
Finally, the McCoys allege the conduct of Dr.
Jacobs and Dr. Gunn, when viewed objectively from their
standpoint at the time of the occurrence, involved an
extreme degree of risk, considering the probability and
magnitude of the potential harm to others. The McCoys
further allege Dr. Jacobs and Dr. Gunn had actual,
subjective awareness of the risk involved, but
nevertheless proceeded with conscious indifference to
Shannon’s rights, safety, or welfare.
In response to the McCoys’ gross-negligence
allegations, the relators argue that merely adding the
word ” knowingly” to existing allegations of negligence
is not enough. Texas follows the ” fair notice” standard
for pleadings, which looks to whether the opposing party
can ascertain from the pleadings the nature and basic
issues of the controversy and the type of evidence that
might be relevant to the controversy. Low v. Henry, 221
S.W.3d 609, 612 (Tex.2007); Horizon/CMS Healthcare
Corp. of Am. v. Auld, 34 S.W.3d 887, 896 (Tex.2000). ” ‘
A petition is sufficient if it gives fair and adequate notice
of the facts upon which the pleader bases his claim. The
purpose of this rule is to give the opposing party
information sufficient to enable him to prepare a defense.’
” Horizon/CMS Healthcare, 34 S.W.3d at 897 (quoting
Roark v. Allen, 633 S.W.2d 804, 810 (Tex.1982)).
Exemplary damages are special damages that must be
supported by express allegations of willfulness, malice,
or gross negligence that go beyond the allegations
necessary to recover compensatory damages. Al Parker
Buick Co., 788 S.W.2d at 130. Texas law requires a
plaintiff seeking production of net worth information to ”
‘ allege facts showing that relator is liable for punitive
damages.’ ” Delgado v. Kitzman, 793 S.W.2d 332, 333
(Tex.App.-Houston [1st Dist.] 1990, orig. proceeding)
(quoting Al Parker Buick Co., 788 S.W.2d at 131).
Under Texas’ basic pleading requirements, the
McCoys’ live pleadings sufficiently allege specific facts
supporting gross negligence and invoke the objective and
subjective standards as set forth in section 41.001(11). [7]
See Tex. Civ. Prac. & Rem.Code Ann. Therefore, we
conclude the McCoys have pleaded facts sufficient for
purposes of showing they are entitled to discovery of
net-worth information from
Page 44
the relators. See In re Garth, 214 S.W.3d at 192 (holding
plaintiff’s pleadings were sufficient to notify defendants
that she sought to hold them liable for punitive damages
through conspiracy theory); In re W. Star Trucks US,
Inc., 112 S.W.3d at 763-64 (holding allegations in
petition that defendant had engaged in fraudulent and
malicious conduct were sufficient to permit discovery of
net worth); Delgado, 793 S.W.2d at 333 (holding
plaintiff’s pleading alleging defendant was ” consciously
indifferent” to safety of others was sufficient to entitle
plaintiff to discovery of net worth information).[8]
C
The relators also contend the trial court’s order
directing them to provide net-worth information for the
past two years is overly broad and unduly burdensome
because it goes beyond what is necessary to demonstrate
their respective current net worths. Discovery is limited
to matters relevant to the case. Texaco, Inc. v. Sanderson,
898 S.W.2d 813, 814 (Tex.1995) (orig. proceeding) (per
curiam); see also Tex.R. Civ. P. 192 cmt. 1 (” While the
scope of discovery is quite broad, it is nevertheless
confined by the subject matter of the case and reasonable
expectations of obtaining information that will aid
resolution of the dispute.” ). A party’s requests must show
a reasonable expectation of obtaining information that
will aid in the resolution of the dispute. In re CSX Corp.,
124 S.W.3d at 152. Therefore, discovery requests must be
reasonably tailored to include only matters relevant to the
case. In re Am. Optical Corp., 988 S.W.2d 711, 713
(Tex.1998) (orig. proceeding) (per curiam). The Texas
Supreme Court has repeatedly admonished that discovery
may not be used as a fishing expedition. K Mart Corp. v.
Sanderson, 937 S.W.2d 429, 431 (Tex.1996) (orig.
proceeding) (per curiam); Dillard Dep’t Stores, Inc. v.
Hall, 909 S.W.2d 491, 492 (Tex.1995) (orig. proceeding)
(per curiam); Texaco, Inc., 898 S.W.2d at 815.
The scope of discovery is a matter of trial-court
discretion. In re CSX Corp., 124 S.W.3d at 152.
However, a trial court abuses its discretion when it
compels overly broad discovery. In re Graco Children’s
Prods., Inc., 210 S.W.3d 598, 600 (Tex.2006) (orig.
proceeding) (per curiam); Dillard Dep’t Stores, Inc., 909
S.W.2d at 492. ” A central question in determining
overbreadth is whether the request could have been more
narrowly tailored to avoid including tenuous information
and still obtain the necessary information.” In re CSX
Corp., 124 S.W.3d at 153. Overbroad requests encompass
time periods or activities beyond those at issue in the
case-in other words, matters of questionable relevance. In
re Alford Chevrolet-Geo, 997 S.W.2d 173, 180 n. 1
(Tex.1999) (orig. proceeding).
The McCoys sought five years’ worth of financial
information from the relators. The trial court narrowed
the scope of discovery to two years’ worth. But we do not
believe the trial court sufficiently narrowed the scope of
production because only the relators’ current [9] net
Page 45
worth is relevant. See In re House of Yahweh, 266
S.W.3d at 673 (holding trial court erred in failing to limit
discovery to relators’ current balance sheets because
earlier balance sheets would not be relevant to relators’
current net worth).[10] Therefore, we conclude the trial
court abused its discretion by ordering the relators to
produce net-worth information beyond the relators’
current net worth. See In re Allstate County Mut. Ins. Co.,
227 S.W.3d 667, 669 (Tex.2007) (orig. proceeding) (per
curiam) (holding trial court’s order was abuse of
discretion because it did not limit discovery requests
which were overbroad as to time and scope). Moreover,
the relators do not have an adequate remedy by appeal
from the production of their net worth from previous
years. See In re Weekley Homes, L.P., 295 S.W.3d 309,
322-23 (Tex.2009) (orig. proceeding) (” Intrusive
discovery measures … require at a minimum, that the
benefits of the discovery measure outweigh the burden
imposed upon the discovered party.” ); In re CSX Corp.,
124 S.W.3d at 153 (holding relator lacked adequate
remedy by appeal where discovery order compelled
production of ” patently irrelevant” documents); Tilton v.
Marshall, 925 S.W.2d 672, 683 (Tex.1996) (orig.
proceeding) (op. on reh’g) (” ‘ [w]here … discovery order
imposes a burden on the producing party far out of
proportion to any benefit that may obtain to the
requesting party,’ ” mandamus relief may be justified)
(quoting Walker, 827 S.W.2d at 843).
D
The relators also complain about the trial court’s
order requiring Dr. Jacobs and Dr. Gunn to answer
questions about their net worth at their depositions.
Allowing such inquiries without any limitations as to
time or subject matter, the relators argue, is overly broad
and burdensome. See In re Alford Chevrolet-Geo, 997
S.W.2d at 180 n. 1 (explaining overbroad requests
encompass time periods or activities beyond those at
issue in case, i.e., matters of questionable relevance).
Further, the relators contend that answering deposition
questions about information they already have provided
in written discovery responses would be unnecessarily
cumulative. We address this issue by observing that we
are concerned not only with determining the appropriate
scope of discovery of the relators’ net worth under
Lunsford, but also with employing the most efficient and
least intrusive methods by which to permit the McCoys to
discover that information. See Tex.R. Civ. P. 192 cmt. 1
(explaining scope of discovery is confined by subject
matter of case and reasonable expectations of obtaining
information that will aid resolution of dispute);
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In re Weekley Homes, L.P., 295 S.W.3d at 321 (” [T]rial
courts should be mindful of protecting sensitive
information and utilize the least intrusive means
necessary to facilitate discovery.” ).
Allowing litigants to delve without limitation into
personal finances not only raises serious privacy
concerns, but also provides an opportunity for ” needless
abuse and harassment.” Wal-Mart Stores, Inc. v.
Alexander, 868 S.W.2d 322, 331-32 (Tex.1993)
(Gonzalez, J., concurring). In light of these concerns, we
believe it is appropriate to limit the scope of
oral-deposition inquiry into net worth. See Axelson, Inc.
v. McIlhany, 798 S.W.2d 550, 553 (Tex.1990) (orig.
proceeding) (explaining scope of discovery is limited by
legitimate interests of a party to avoid overly broad
requests, harassment, or disclosure of privileged
information). Accordingly, with respect to net-worth
discovery during the oral depositions of Dr. Jacobs and
Dr. Gunn, the McCoys are limited to asking each
physician to state (1) his or her current net worth, i.e., the
amount of current total assets less current total liabilities
determined in accordance with generally accepted
accounting principles (” GAAP” ),[11] and (2) the facts
and methods used to calculate what each physician
alleges is his or her current net worth. Any questioning
beyond these two narrow inquiries shall be allowed only
upon leave of the trial court after a showing that the
McCoys have reason to believe that the information
provided was incomplete or inaccurate. See In re
Prudential, 148 S.W.3d at 136 (explaining mandamus is
appropriate in exceptional cases ” to give needed and
helpful direction to the law that would otherwise prove
elusive in appeals from final judgments” ). And to the
extent more specific limitations are appropriate, such as
on the amount of on-the-record deposition time that may
be devoted to questioning about net worth, we leave that
to the sound discretion of the trial court.
E
Finally, the relators assert the trial court abused its
discretion by ordering them to create and produce
affidavits in a format of what would have been provided
to a lender as to their respective net worth. The trial court
ordered the relators to produce ” the actual financial
statements they have provided to a lender within the past
two-years.” Alternatively, the trial court directed the
relators, if they had not submitted any such financial
statements to a lender within the preceding two years, to
produce (1) an affidavit swearing that no such financial
statement has been submitted, and (2) an affidavit in the
form of what would have been provided to a lender as to
net worth. It is well-settled that a party cannot be forced
to create documents that do not exist for the sole
Page 47
purpose of complying with a request for production.[12]
Therefore, the relators are not required to create affidavits
in a format of what would have been provided to a lender
to comply with the McCoys’ request for production.[13]
Instead, the relators are required to produce in response to
the McCoys’ requests for production only documents that
already exist. In keeping with our above-holding, any
such information is limited to the relators’ respective
current net worth, as well as whatever other limitations
the trial court has set forth or may yet impose.
III
We deny the relators’ petition with regard to their
assertions that the McCoys are precluded from seeking
discovery of information of any net worth because Texas
law requires a claimant first to make a prima facie
showing of entitlement to punitive damages and the
McCoys have not pleaded sufficient allegations of
conduct entitling them to punitive damages.
We conditionally grant the relators’ petition with
regard to the trial court’s order of January 23, 2009,
requiring the relators to produce net-worth information
for the past two years. The relators are required to
produce only current net-worth information. Further, the
relators are not required to create affidavits in a format of
what would have been provided to a lender, but are
required only to produce documents in response to the
McCoys’ request for production that already exist. The
trial court is directed to modify that portion of its order
accordingly.
We further conditionally grant the relators’ petition
with regard to the trial court’s order of January 30, 2009,
permitting the questioning of Dr. Jacobs and Dr. Gunn
about their respective current net worth. Specifically, the
McCoys are limited to asking each physician to (1) state
his or her current net worth, i.e., the amount of current
total assets less current total liabilities, and (2) the facts
and methods used to calculate what each physician
alleges is his or her current net worth. Moreover, any
questioning beyond these two narrow inquiries shall be
allowed only upon leave of the trial court after a showing
that the McCoys have reason to believe that the
information provided was incomplete or inaccurate. The
trial court is directed to modify that portion of its order
accordingly, and is free to otherwise impose whatever
other limitations it determines, in its discretion, to be
appropriate.
We lift our stays issued on February 4, 2009, and
March 6, 2009. The writ will issue only if the trial court
fails to act in accordance with this opinion.
SULLIVAN, J., concurring.
KENT C. SULLIVAN, Justice, concurring.
The Court today reaches a result consistent with the
current state of Texas law. I write separately only to note
that the current Texas rule on net-worth discovery is now
decades-old and, in light of the evolution
Page 48
of Texas law, needs to be revisited. The instant case
illustrates how it contributes to unnecessary ” satellite
litigation” unrelated to the merits of the case and often
produces expense and burden far exceeding any potential
benefit.
A brief review of the history of this dispute is
illustrative. It is noteworthy that the medical incident
made the basis of this lawsuit occurred in September
2004. Five years later this legal dispute remains
unresolved-even at the trial-court level.
The specific controversy over net-worth discovery
is fast approaching its second anniversary and has
continued largely unabated. It began with an exhaustive
request for financial records covering a multi-year period.
Those discovery requests inevitably produced-over many
months-a flood of objections, hours of court hearings,
multiple court orders, and the current mandamus
proceeding with multiple appellate briefs from each side.
The cost to the parties has no doubt been significant. The
level of chaos in this case-a tort case with themes
common to many such disputes-has given me pause, with
a belief that some assessment is in order as to the efficacy
of this process as well as the relative value of the
discovery in question.
A. The Role of Net-Worth Discovery in Resolving
Material Case Issues
Under the Rules, a trial judge should limit discovery
for which the burden or expense outweighs the likely
benefit. Tex.R. Civ. P. 192.4(b). In weighing these
factors, courts are to consider, among other things, the
importance of the proposed discovery in resolving the
material issues of the lawsuit. See id.
As a general rule, evidence of a party’s wealth is
irrelevant and prejudicial. See Carter v. Exxon Corp., 842
S.W.2d 393, 399 (Tex.App.-Eastland 1992, writ denied).
Consequently, it is almost always inadmissible at trial.
See Cooke v. Dykstra, 800 S.W.2d 556, 562
(Tex.App.-Houston [14th Dist.] 1990, no writ); Carter,
842 S.W.2d at 399.
In Lunsford v. Morris, however, the Texas Supreme
Court carved out a narrow exception to the general rule of
inadmissibility, allowing parties to discover and
introduce evidence of a defendant’s net worth in cases in
which punitive or exemplary damages could be awarded.
746 S.W.2d 471, 473 (Tex.1988) (orig. proceeding),
disapproved of on other grounds by Walker v. Packer,
827 S.W.2d 833, 842 (Tex.1992) (orig. proceeding).
However, Lunsford properly should be considered in its
historical context.
Specifically, in 1981, the Texas Supreme Court
decided to re-visit the standard of review used in
reviewing jury awards of punitive damages. See Burk
Royalty Co. v. Walls, 616 S.W.2d 911, 920 (Tex.1981).
Under the prior standard, a defendant could successfully
challenge a punitive-damages award on appeal simply by
pointing to any evidence suggesting he exercised some
care. See id. at 921. However, the Court chose to depart
from that standard because it was seen as creating a
virtually impossible hurdle to the recovery of punitive
damages ” since anything may amount to some care.” Id.
In its place, the Court substituted a no-evidence standard
of review that effectively ” gave ‘ the jury greater
discretion to award punitive damages.’ ” [1]
In addition, the Burk Court authorized plaintiffs to
prove ” gross negligence,” the
Page 49
standard for imposing punitive damages, merely by
constructive notice of the defendant’s subjective state of
mind. See Burk, 616 S.W.2d at 922. Four years later, the
Court re-affirmed that holding and also expanded the
definition of ” gross negligence” to give plaintiffs
additional methods to prove a defendant’s culpability for
exemplary damages:
[T]he test for gross negligence is both an objective and a
subjective test. A plaintiff may prove a defendant’s gross
negligence by proving that the defendant had actual
subjective knowledge that his conduct created an extreme
degree of risk. In addition, a plaintiff may objectively
prove a defendant’s gross negligence by proving that
under the surrounding circumstances a reasonable person
would have realized that his conduct created an extreme
degree of risk to the safety of others.
Williams v. Steves Indus., Inc., 699 S.W.2d 570, 573
(Tex.1985) (emphasis added), superseded by statute as
recognized by Transp. Ins. Co. v. Moriel, 879 S.W.2d 10,
20 n. 11 (Tex.1994).
In 1987, the Texas Legislature began to scale back
the availability of punitive damages by enacting Chapter
41 of the Texas Civil Practice and Remedies Code.[2]
However, while the original version of Chapter 41
introduced basic limitations to the recovery of punitive
damages,[3] the protections it extended to defendants
pale in comparison with those found in the version
currently in effect.[4] Lunsford was decided the
following year but, apart from a brief mention in one of
the dissenting opinions, ignores any discussion of the
1987 reforms or their effect on the Court’s expansive
exemplary-damage decisions from earlier that decade.
See Lunsford, 746 S.W.2d at 476 (Gonzalez, J.,
dissenting).
In 1995, the Legislature passed more sweeping tort
reform to the substantive and procedural law governing
punitive damages. See Act of April 11, 1995, 74th Leg.,
R.S., ch. 19, § 1, 1995 Tex. Gen. Laws 108, 108-13
(amended 2003) (current version at Tex. Civ. Prac. &
Rem.Code Ann. §§ 41.001-.013 (Vernon 2008 & Supp.
2009)). Chapter 41 was significantly rewritten to provide
defendants dramatic protection from punitive-damage
awards, including:
• Juries could no longer award exemplary damages
intended solely to serve ” as an example to others,” but
were instead limited to assessing damages with the
purpose of punishing the defendant.
• The Legislature dramatically expanded Chapter
41’s coverage to apply to all but a very few types of tort
actions.
• A plaintiff’s burden of proof for punitive damages
was elevated to require proof of all elements by clear and
convincing evidence.
Page 50
• With few limitations, a defendant could no longer
be exposed to punitive damages because of another
person’s criminal act.
• The Legislature lowered the existing cap on
punitive damages.
• Upon a defendant’s motion, the trial court had to
bifurcate the jury’s determination of the amount of
punitive damages, and evidence of a defendant’s net
worth could not be admitted during the liability phase of
the trial.
Id. These substantive and procedural amendments
changed the legal landscape on two levels. First, they
further limited the amount of punitive damages that could
be assessed. See id. § 1 secs. 41.007, 41.008. Second, and
more significantly, these revisions dramatically lessened
the chances of any punitive-damage recovery by a
claimant. See id. § 1 secs. 41.001(5), 41.002, 41.003(b),
41.005.
In 2003, the Legislature further eroded a plaintiff’s
ability to recover punitive damages as a part of
comprehensive tort-reform legislation.[5] Now, unlike
the general rule permitting a civil verdict upon the vote of
only ten jurors, an award of punitive damages requires a
unanimous verdict as to liability for, and the amount of,
such damages. See Tex. Civ. Prac. & Rem.Code Ann. §
41.003(d) (Vernon 2008 & Supp. 2009); Tex.R. Civ. P.
292; Deatley v. Rodriguez, 246 S.W.3d 848, 850
(Tex.App.-Dallas 2008, no pet.).
In their brief, the McCoys acknowledge the
dramatic shift in the law on punitive damages since
Lunsford, as the Legislature has repeatedly acted ” to
tightly restrict the ability of litigants to seek and recover
exemplary damages.” [6] Thus, in the current legal
climate, far fewer cases are likely to present fact issues
for trial as to punitive-damage liability than when
Lunsford was decided more than two decades ago.[7]
Accordingly, because net-worth discovery may serve
little practical purpose in many cases, [8] trial courts
performing
Page 51
a benefit-to-burden analysis should consider appropriate
management of the scope of such discovery
corresponding to its utility in resolving these important
issues. See Tex.R. Civ. P. 192.4(b).
B. Burden and Expense of Net-Worth Discovery
The benefits of net-worth discovery are likely
limited in most cases, but the direct and indirect costs
may not be. Of course, a case against a publicly traded
corporation may present little problem in this respect, as
its net worth should be discernible simply from the
contents of a widely available annual report. Under that
scenario, the burden and expense of the proposed
discovery would be minimal. See id.
A private individual, however, presents a far
different profile with, at minimum, potentially serious
issues as to privacy rights and availability of responsive
information. Net-worth discovery as to an individual will
almost inevitably require-and deserve-much more
management and oversight by the trial court.[9] See In re
Weekley Homes, L.P., 295 S.W.3d 309, 316 (Tex.2009)
(orig. proceeding) (” To the extent possible, courts should
be mindful of protecting sensitive information and should
choose the least intrusive means of retrieval.” ).
In this case, the McCoys sought audited financial
statements that, while invasive, may at least represent one
of the most accurate and efficient ways for indicating an
individual’s net worth, if available.[10] However, they
also sought countless other categories of documents that
have been repeatedly held undiscoverable, such as
income-tax returns,[11] or which possess only the most
indirect and tenuous connection to net worth. Among this
latter category of documents are the McCoys’ requests for
(1) HUD statements reflecting the sale or purchase of real
estate; (2) ” any and all contracts that you are a party to
with any health insurance company, HMO, including
Medicare and/or Medicaid, managed care entity, or
hospital” ; (3) any documents reflecting accounts
receivable, from any time period, for the provision of
medical care; (4) accounts receivable due to the
defendant’s ” participation in any clinical drug trials,
medical device trials, or other medical product trials” for
the purpose of obtaining FDA approval; and (5) all
medical bills issued for an entire calendar year,
presumably as to all of the physicians’ patients, ”
touching, concerning, or dealing with” the provision of
medical care.
This sort of invasive discovery generally raises very
serious privacy concerns, but that is not its only cost. It
also imposes additional burden and expense on the parties
and their attorneys, as well as occupying the limited
resources of the trial court and, now, this appellate court.
See Wal-Mart Stores, Inc. v. Alexander, 868 S.W.2d 322,
331-32 (Tex.1993) (Gonzalez, J., concurring)
(commenting on the privacy concerns and potential for
abuse inherent in the ” unlimited discovery … of
sensitive, private, and confidential financial information”
).
Page 52
However, this sort of discovery should not be
unexpected given the Texas Supreme Court’s lengthy
silence as to both the precise definition of ” net worth” in
this context and the proper boundaries for the discovery
and ultimate presentation of information as to a
defendant’s net worth:
This Court in Lunsford failed to define net worth and
failed to suggest a procedure for placing such evidence
before the jury. I predicted then that in the absence of
guidance from this Court, ” confusion will prevail as
practitioners and judges attempt to ascertain the
components of ‘ net worth.’ ” Lunsford, 746 S.W.2d at
475.
Conflicting appellate court decisions on the meaning of
the term ” net worth” are evidence of the confusion
surrounding this fundamental issue. This confusion
should be resolved by this Court.
Wal-Mart, 868 S.W.2d at 330 (Gonzalez, J., concurring)
(citations omitted); see also Lunsford, 746 S.W.2d at 476
(Gonzalez, J., dissenting) (calling for clear definition of
term ” net worth” and clarity on types of documents
relevant to calculate it).
Here, the majority attempts to fairly bridge some of
this gap by offering a solid definition of ” net worth” as
assets minus liabilities. See Black’s Law Dictionary 1041
(6th ed. 1990); Wal-Mart, 868 S.W.2d at 330-31
(Gonzalez, J., concurring). Yet, even this pronouncement
may still lead to disagreements about the documents that
are relevant and discoverable to calculate this figure, in
light of the relative lack of guidance on this issue.
Trial courts have the necessary management tools to
control the sequence, timing, and scope of discovery to
minimize burden, maximize efficiency, and protect
privacy rights.[12] See Tex.R. Civ. P. 166, 192. Still, we
must acknowledge that there are literally hundreds of
Texas trial-court judges-spread over 254 counties-who
may preside over cases with claims for exemplary
damages and, of necessity, disputes involving net-worth
discovery. They each have different backgrounds,
different approaches, and different dockets. Those
dynamics are likely to produce a highly unpredictable
and idiosyncratic approach to the management of these
issues across the state-and history shows us that these are
issues that regularly recur. I believe parties to litigation in
Texas are entitled to greater clarity and predictability
from our courts. Accordingly, I would urge that Lunsford
be revisited and updated.
———
Notes:
[1] The other defendants are Woman’s Hospital of Texas,
Inc., CHCA Woman’s Hospital, L.P. d/b/a Woman’s
Hospital of Texas, Houston Woman’s Hospital Partner,
L.L.C., and James A. Collins, M.D.
[2] We note other jurisdictions require a prima facie
showing of entitlement to recover punitive damages prior
to conducting discovery on a defendant’s financial status.
See, e.g., Iowa Code Ann. § 668A.1 (1998); Larriva v.
Montiel, 143 Ariz. 23, 691 P.2d 735, 738 (1984); Curtis
v. Partain, 272 Ark. 400, 614 S.W.2d 671, 674 (1981),
overruled on other grounds, Lupo v. Lineberger, 313
Ark. 315, 855 S.W.2d 293 (1993); Herman v. Sunshine
Chem. Specialties, Inc., 133 N.J. 329, 627 A.2d 1081,
1089 (1993); Mark v. Congregation Mishkon Tefiloh, 745
A.2d 777, 780 (R.I.2000); Cramer v. Powder River Coal,
L.L.C., 204 P.3d 974, 980 (Wyo.2009). However, most
federal courts do not require a plaintiff to make a prima
facie showing of entitlement to recover punitive damages
before seeking pretrial discovery of the defendant’s
financial information. See, e.g., United States v. Matusoff
Rental Co., 204 F.R.D. 396, 399 (S.D.Ohio 2001) (stating
overwhelming majority of federal courts have concluded
plaintiffs seeking punitive damages are entitled to
discover information on defendant’s financial condition
without making prima facie showing of entitlement to
recovery of such damages); CEH, Inc. v. FV ” Seafarer” ,
153 F.R.D. 491, 498 (D.R.I.1994) (same); Mid Continent
Cabinetry, Inc. v. George Koch Sons, Inc., 130 F.R.D.
149, 151 (D.Kan.1990) (same); Doe v. Young, 2009 WL
440478, at *2 (E.D.Mo. Feb. 18, 2009) (same);
Westbrook v. Charlie Sciara & Son Produce Co., 2008
WL 839745, *2 (W.D.Tenn. Mar. 27, 2008) (same); S.
Cal. Hous. Rights Ctr. v. Krug, 2006 WL 4122148, at *4
(C.D.Cal. Sept. 5, 2006) (same).
[3] Other jurisdictions require the plaintiff to establish a
factual or evidentiary basis to be entitled to discovery on
a defendant’s net worth. See, e.g., Bryan v. Thos. Best &
Sons, Inc., 453 A.2d 107, 108 (Del.Super.Ct.1982);
Globe Newspaper Co. v. King, 658 So.2d 518, 519
(Fla.1995) (citing Fla. Stat. § 768.72); Smith v. Morris,
Manning & Martin, L.L.P., 293 Ga.App. 153, 666 S.E.2d
683, 697 (2008) (quoting Holman v. Burgess, 199
Ga.App. 61, 404 S.E.2d 144, 147 (1991)); Breault v.
Friedli, 610 S.W.2d 134, 139-40 (Tenn.Ct.App.1980). At
least two states go so far as to require the jury to return a
verdict awarding punitive damages prior to the plaintiff’s
conducting discovery on a defendant’s financial status.
See, e.g., Ex parte Hsu, 707 So.2d 223, 225-26
(Ala.1997) (citing Ala.Code § 6-11-23(b)); Prior v.
Brown Transp. Corp., 103 A.D.2d 1042, 478 N.Y.S.2d
435, 436 (N.Y.App.Div.1984) (quoting Rupert v. Sellers,
48 A.D.2d 265, 368 N.Y.S.2d 904, 912
(N.Y.App.Div.1975)).
[4] After Lunsford, the supreme court established a
bifurcated procedure for conducting trials involving
claims for punitive damages because of the ” very real
potential” that evidence of a defendant’s wealth will
prejudice the jury’s determination of other disputed issues
in tort cases. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10,
30 (Tex.1994); see also Tex. Civ. Prac. & Rem.Code
Ann. § 41.009 (Vernon 2008) (providing for bifurcated
trial on claim for punitive damages).
[5] DIC ” is a rare, life-threatening condition that
prevents a person’s blood from clotting normally. It may
cause excessive clotting (thrombosis) or bleeding
(hemorrhage) throughout the body and lead to shock,
organ failure, and death.” WebMD, ” Disseminated
Intravascular Coagulation (DIC),” http:// www. webmd.
com/ a- to- z- guides/ disseminated- intravascularcoagulation-
dictopic- overview (last visited July 7,
2009). To treat DIC, ” [t]ransfusions of blood cells and
other blood products may be necessary to replace blood
that has been lost through bleeding and to replace clotting
factors used up by the body.” Id.
[6] ” Clotting factor” refers to ” any of several plasma
components (as fibrinogen, prothrombin, and
thromboplastin) that are involved in the clotting of
blood.” Merriam-Webster OnLine, ” clotting factor,”
http:// merriam-webster. com/medical/ clotting factors
(last visited July 8, 2009).
[7] Some states do not permit a plaintiff to claim punitive
damages in an original pleading, but allow for the
amendment of the plaintiff’s pleadings to claim punitive
damages, with the trial court’s permission, after satisfying
a requisite evidentiary showing. See, e.g., Idaho Code
Ann. § 6-160.4(2) (2008); Minn.Stat. Ann. § 549.191
(2000); Or.Rev.Stat. Ann. § 31.725(2) (2007).
[8] The relators argue, for the first time in their reply
brief, that we should consider, not only the pleadings, but
also the requirement that a plaintiff must first present
expert opinion of the applicable standard of care, the
alleged breach of that standard, and the causal link to
proceed on a health care liability claim when determining
whether net worth information is relevant. We do not
consider this contention because it was not raised in the
trial court or in the relators’ petition for writ of
mandamus. See In re TCW Global Project Fund, II, Ltd.,
274 S.W.3d 166, 171 (Tex.App.-Houston [14th Dist.]
2008, orig. proceeding).
[9] By ” current,” we mean as of the time the discovery is
responded to, though net-worth information should be
updated through supplementation-as should the
information in any discovery response-if it changes
materially between the service of the discovery response
and the time of trial. See Tex.R. Civ. P. 193.5(a).
[10] Other courts have similarly held only current
financial information is relevant to a punitive damages
claim. See, e.g., Hightower v. Heritage Acad. of Tulsa,
Inc., 2008 WL 2937227, at *1 (N.D.Okla. July 29, 2008)
(limiting discovery of financial information to defendant’s
balance sheet for 2008 and net worth for 2008); McCloud
v. Board of County Comm’rs, 2008 WL 1743444, at *4
(D.Kan. Apr. 11, 2008) (limiting production of
defendant’s financial information to most recent annual
reports and current financial statements); Platcher v.
Health Prof’ls, Ltd., 2007 WL 2772855, at *3 (C.D.Ill.
Sept. 18, 2007) (” Only Defendants’ current assets and
liabilities are relevant to the punitive damages claim
against them, …” ); Fieldturf Int’l, Inc. v. Triexe Mgmt.
Group, Inc., 2004 WL 866494, at *3 (N.D.Ill. Apr. 16,
2004) (” Plaintiffs’ request for non-current financial
information is irrelevant to punitive damages
determination.” ).
[11] Although section 41.011 provides that the fact finder
shall consider evidence, if any, of the defendant’s ” net
worth,” the statute does not define that term. Tex. Civ.
Prac. & Rem.Code Ann. 41.011(a)(6); see also Lunsford,
746 S.W.2d at 475 (Gonzalez, J., dissenting) (criticizing
court’s failure to define ” net worth” ). The parties have
not cited, and we have not found, any cases defining the
term ” net worth” in connection with the recovery of
punitive damages. However, ” net worth,” as used to
ascertain the amount of security required to suspend a
judgment pending appeal, has been defined as the
difference between total assets and liabilities determined
in accordance with GAAP. See Ramco Oil & Gas, Ltd. v.
Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 914
(Tex.App.-Houston [14th Dist.] 2005, no pet.) (defining ”
net worth” as difference between total assets and
liabilities determined in accordance with GAAP after
thorough discussion of numerous authorities); see also
Black’s Law Dictionary 1041 (6th ed. 1990) (defining net
worth as ” the amount by which assets exceed liabilities”
).
[12] See In re Guzman, 19 S.W.3d 522, 525
(Tex.App.-Corpus Christi 2000, orig. proceeding); Smith
v. O’Neal, 850 S.W.2d 797, 799 (Tex.App.-Houston [14th
Dist.] 1993, no writ); see also In re Colonial Pipeline
Co., 968 S.W.2d 938, 942 (Tex.1998) (quoting McKinney
v. Nat’l Union Fire Ins. Co., 772 S.W.2d 72, 73 n. 2
(Tex.1989) (op. on reh’g)) (” ‘ [T]his rule cannot be used
to force a party to make lists or reduce information to
tangible form.’ ” ).
[13] The relators do not complain about the order in so
far as it requires them to produce an affidavit swearing
that no such documents had been submitted to a lender in
the preceding two years.
[1] Patricia F. Miller, Comment, 2003 Texas House Bill
4: Unanimous Exemplary Damage Awards and Texas
Civil Jury Instructions, 37 St. Mary’s L.J. 515, 529
(2006) (citations omitted); see Burk, 616 S.W.2d at 922.
[2] See Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, §
2.12, 1987 Tex. Gen. Laws 37, 44 (amended 1995 &
2003) (current version at Tex. Civ. Prac. & Rem.Code
Ann. §§ 41.001-.013 (Vernon 2008 & Supp. 2009)).
[3] For example, the tort-reform legislation included a
basic cap on exemplary damages. See Act of June 3,
1987, 70th Leg., 1st C.S., ch. 2, § 2.12 sec. 41.007, 1987
Tex. Gen. Laws 37, 46 (amended 1995 & 2003). In
addition, the legislature effectively abrogated the purely
objective method of proving gross negligence. See
Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 20 n. 11
(Tex.1994). However, because this narrower definition of
” gross negligence” applied only to products-liability
cases and certain negligence actions, courts continued to
apply Burk Royalty and Steves Industries to all other
gross-negligence suits. See J. Stephen Barrick, Comment,
Moriel and the Exemplary Damages Act: Texas
Tag-Team Overhauls Punitive Damages, 32 Hous. L.Rev.
1059, 1066 (1995).
[4] See infra pp. 49-50.
[5] See Act of June 2, 2003, 78th Leg., R.S., ch. 204, §§
13.01-.08, 2003 Tex. Gen. Laws 847, 886-89 (current
version at Tex. Civ. Prac. & Rem.Code Ann. §§
41.001-.013 (Vernon 2008 & Supp. 2009)).
[6] See Miller, supra note 1, at 520 (” [T]he unanimity
requirements make it more difficult for a plaintiff to
receive a punitive damage award from a Texas jury.” ).
[7] In fact, some might argue Chapter 41, as currently
constituted, imposes punitive-damage liability only for
intentional torts. See Tex. Civ. Prac. & Rem.Code Ann.
§§ 41.001(7), (11), 41.003(a) (authorizing exemplary
damages only for fraud, malice, and gross negligence,
where malice requires proof of ” a specific intent … to
cause substantial injury or harm” and gross negligence
similarly mandates a showing of the defendant’s (1)
actual, subjective awareness of an extreme degree of risk
and (2) consciously indifferent decision to proceed
nonetheless).
[8] Indeed, discovery into a defendant’s net worth may
consume a disproportionate amount of attention inasmuch
as net worth is only one among several factors a jury
should consider, and not even the most important factor
in reviewing an amount of punitive damages. See Tex.
Civ. Prac. & Rem.Code Ann. § 41.011(a) (Vernon 2008);
Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d
35, 45-46 (Tex.1998) (” [T]he degree of reprehensibility
of the defendant’s conduct is ‘ [p]erhaps the most
important indicium’ of the reasonableness of a punitive
damage award.” ) (quoting BMW of N. Am., Inc. v. Gore,
517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809
(1996)). In fact, until Lunsford, a defendant’s net worth
was not even listed as a factor for the jury to consider in
awarding punitive damages. See Lunsford, 746 S.W.2d at
472-73; Alamo Nat’l Bank v. Kraus, 616 S.W.2d 908, 910
(Tex.1981). Even so, a post- Lunsford jury may still
decide on the amount of punitive damages without
considering evidence of the defendant’s net worth. See
Durban v. Guajardo, 79 S.W.3d 198, 210-11
(Tex.App.-Dallas 2002, no pet.).
[9] Closed corporations and closely-held corporations
may present similar, albeit somewhat less serious, issues.
[10] See Sears, Roebuck & Co. v. Ramirez, 824 S.W.2d
558, 559 (Tex.1992) (orig. proceeding). Of course, the
average private individual is highly unlikely to have
audited financial statements readily available.
[11] See id.; see also Wal-Mart Stores, Inc. v. Alexander,
868 S.W.2d 322, 331 (Tex.1993) (Gonzalez, J.,
concurring) (surveying numerous cases precluding
discovery into federal income-tax returns).
[12] For example, in appropriate cases, some trial courts
use a docket-control order to schedule and hear
summary-judgment motions on predicate
exemplary-damage issues in advance of allowing pre-trial
discovery on net worth. This approach could limit
discovery disputes and the potential cost of compliance to
only what is necessarily justified by the facts and claims
of the case. Similarly, trial courts may wish in certain
cases to allow only the threshold discovery of net-worth
amounts by way of limited disclosure at one stage of
pre-trial, and delay discovery as to underlying facts or
methods of calculation of those amounts-potentially
much more invasive and complicated-until a later point
when necessary.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
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