IN RE: Jerry Box

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Court of Appeals of Texas, Corpus Christi-Edinburg.

IN RE: Jerry Box

NUMBER 13–16–00016–CV

Decided: February 19, 2016

Before Justices Rodriguez, Garza, and Benavides


Relator, Jerry Box, filed a petition for writ of mandamus contending that the trial court abused its discretion by ordering him to produce documents that are not relevant to the underlying lawsuit.  We deny the petition for writ of mandamus.

I. Background

In the underlying suit, the Box Family Limited Partnership (“Partnership”) brought suit against Joe David Castro regarding a lending dispute.  In response, Castro brought suit against Box and others for predatory lending, including causes of action for usury, wrongful foreclosure, wrongful eviction, intentional infliction of emotional distress, abuse of process, fraud, civil conspiracy, and for fraudulent liens under Chapter 12 of the Texas Civil Practice and Remedies Code. See generally Tex. Civ. Prac. & Rem.Code Ann. §§ 12.001–.007 (West, Westlaw through 2015 R.S.).  Specifically, in his “Second Amended Original Answer, Counter–Claim, and Third Party Petition and Application for Injunctive Relief,” Castro filed a counterclaim against the Partnership and a third party complaint against Box and Rick Saenz, Jr., Gerardo Chapa Arredondo, Everardo Villarreal, Sr., Raul Flores, and Albert Closner.  To simplify the allegations in this cause, Castro generally alleges that the defendants obtained a usurious lien on his home in violation of his homestead rights, wrongfully foreclosed that lien, made additional loans to him to repurchase the home, fraudulently conveyed the property between themselves to drive up the price, and ultimately sold the property back to him at an inflated price including additional fraudulent brokerage fees or liens at closing.

In pursuit of his claims, Castro propounded requests for production to Box seeking several categories of documents.  The requests for production at issue in this original proceeding seek:  (1) documents reflecting all loans made by Box which were closed by San Jacinto Title Services of Texas, LLC.;  (2) documents reflecting monies paid to Closner through real estate closings where Box is a lender in the transaction;  (3) communications between Box and Closner from August 1, 2011 through July 31, 2015;  and (4) communications between Box and an employee of San Jacinto Title Services of Texas, LLC from August 1, 2011 through July 31, 2015.  Box objected to each request for production on grounds that “it seeks documents that are neither relevant nor reasonably calculated to lead to the discovery of relevant evidence and would be extremely burdensome to produce.”

After a hearing, the trial court ordered Box to produce documents responsive to these requests.  This original proceeding ensued.  By one issue, Box contends that these documents are irrelevant because they regard loans to third parties.  This Court requested and received a response to the petition for writ of mandamus from Castro, and further received a reply thereto from Box. The parties to this original proceeding also furnished this Court with supplemental letter briefs.

II. Standard of Review

To be entitled to mandamus relief, a relator must demonstrate that the trial court clearly abused its discretion and the relator has no adequate remedy by appeal.  In re Lee, 411 S.W.3d 445, 463 (Tex.2013) (orig.proceeding);  In re Reece, 341 S.W.3d 360, 364 (Tex.2011) (orig.proceeding);  In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex.2004) (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).  The adequacy of an appellate remedy must be determined by balancing the benefits of mandamus review against the detriments.  In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex.2008) (orig.proceeding).  Because this balance depends heavily on circumstances, it must be guided by the analysis of principles rather than the application of simple rules that treat cases as categories.  In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex.2008) (orig.proceeding).  We evaluate the benefits and detriments of mandamus review and consider whether mandamus will preserve important substantive and procedural rights from impairment or loss.  In re Prudential Ins. Co. of Am., 148 S.W.3d at 136.

A discovery order that compels production beyond the rules of procedure is an abuse of discretion for which mandamus may be the proper remedy.  In re Nat'l Lloyds Ins. Co., 449 S.W.3d 486, 488 (Tex.2014) (orig.proceeding) (per curiam);  In re Deere & Co., 299 S.W.3d 819, 820 (Tex.2009) (per curiam);  In re Weekley Homes, L.P., 295 S.W.3d 309, 322 (Tex.2009) (orig.proceeding);  In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex.1998) (orig.proceeding);  see, e.g., In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex.1998) (orig.proceeding);  Walker v. Packer, 827 S.W.2d 833, 843 (Tex.1992) (orig.proceeding).

III. Discovery

The Texas Rules of Civil Procedure allow a party to obtain discovery regarding any matter that is not privileged and is relevant to the subject matter of the pending action, even if it would be inadmissible at trial, as long as the information is reasonably calculated to lead to the discovery of admissible evidence.  Tex.R. Civ. P. 192.3(a);  see In re CSX Corp., 124 S.W.3d 149, 152 (Tex.2003) (orig.proceeding).  Information is relevant if it tends to make the existence of a fact that is of consequence to the determination of the action more or less probable than it would be without the information.  Tex.R. Evid. 401.  The phrase “relevant to the subject matter” is to be “liberally construed to allow the litigants to obtain the fullest knowledge of the facts and issues prior to trial.”  Ford Motor Co. v. Castillo, 279 S.W.3d 656, 664 (Tex.2009);  see In re Nat'l Lloyds Ins. Co., 449 S.W.3d at 488;  In re HEB Grocery Co., 375 S.W.3d 497, 500 (Tex.App.—Corpus Christi 2012, orig. proceeding).  The comments to Rule 192 state that “[w]hile 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.”  Tex.R. Civ. P. 192 cmt. 1;  see also 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 at 713.

“[T]he ultimate purpose of discovery is to seek the truth, so that disputes may be decided by what the facts reveal, not by what facts are concealed.”  In re Colonial Pipeline Co., 968 S.W.2d 938, 941 (Tex.1998) (orig.proceeding) (per curiam) (quoting Jampole v. Touchy, 673 S.W.2d 569, 573 (Tex.1984) (orig.proceeding)).  The scope of discovery rests largely within the discretion of the trial court.  In re Graco Children's Prods., Inc., 210 S.W.3d 598, 600 (Tex.2006) (per curiam);  In re CSX Corp., 124 S.W.3d at 152;  In re Colonial Pipeline Co., 968 S.W.2d at 941;  Dillard Dep't Stores, Inc. v. Hall, 909 S.W.2d 491, 492 (Tex.1995) (orig.proceeding);  Ginsberg v. Fifth Ct. of Apps., 686 S.W.2d 105, 108 (Tex.1985) (orig.proceeding).

Accordingly, when considering whether a trial court has clearly abused its discretion with regard to a discovery order, the reviewing court may not substitute its judgment for the judgment of the trial court.  See Walker, 827 S.W.2d at 839–40.  “Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court's decision unless it is shown to be arbitrary and unreasonable.”  Id. at 840.  “When a trial judge exercising an otherwise discretionary authority has only one course to follow and one way to decide, however, the discretion vested in the court is for all practical purposes destroyed.”  In re Goodyear Tire & Rubber Co., 437 S.W.3d 923, 927–28 (Tex. App.—Dallas 2014, orig. proceeding).  Thus, when challenging matters ordinarily committed to the broad discretion of the trial court, a relator in a mandamus proceeding must establish that the trial court could reasonably have reached only one decision.  Walker, 827 S.W.2d at 839–40;  In re VERP Inv., LLC, 457 S.W.3d 255, 260 (Tex.App.—Dallas 2015, orig. proceeding).

IV. Analysis

As stated previously, Box contends that the requests for production are irrelevant to any claim made by Castro because they involve transactions with third parties.  Box contends that Castro is not entitled to “fish through documents involving only unrelated incidents on the mere suspicion that those documents might reveal a pattern of conduct.”  See, e.g., In re Nat'l Lloyds Ins. Co., 449 S.W.3d at 488;  Dillard Dep't Stores, Inc., 909 S.W.2d at 492.  As stated previously, Box's only objections to the requests for production were relevance and burdensomeness, and Box does not pursue his burdensome objection in this Court.

Here, Castro alleges that Saenz and Closner, while acting as Box's agents, committed torts against him, and that the defendants generally conspired with each other to commit the wrongful acts at issue in this lawsuit.  Castro contends that the documents he seeks are relevant and reasonably calculated to lead to the discovery of admissible evidence because they will support a determination that Box had a principal-agent or conspiratorial relationship with one or more of the other defendants to engage in predatory lending.  Stated otherwise, Castro is asserting that the documents are relevant to the extent and scope of Box's alleged agency relationship with the other defendants.  In support of his arguments that the documents are relevant, Castro introduced evidence that Box paid allegedly illegal fees to the other defendants, or imposed allegedly illegal liens in favor of the other defendants in this case, in connection with the transactions on Castro's property.  Box's testimony did not clarify the purpose or genesis for these payments.  Further, the evidence adduced at the hearing included contradictory testimony from the defendants regarding the number of other lending transactions in which they had participated together.

Under proper circumstances, it is permissible to seek and obtain discovery regarding alleged conspiracies.  See, e.g., In re Master Flo Valve Inc., No. 14–15–00956–CV, 2016 WL 316491, at *4 (Tex.App.—Houston [14th Dist.] Jan. 26, 2016, orig. proceeding) (concluding that the trial court did not abuse its discretion in ordering discovery pertaining to complaints of conspiracy and tortious interference);  Smith, Wright & Weed, P.C. v. Stone, 818 S.W.2d 926, 928 (Tex.App.—Houston [14th Dist.] 1991, orig. proceeding) (concluding that the trial court abused its discretion in quashing a deposition where relator alleged a conspiracy in obtaining a default judgment and “[i]f such a conspiracy did exist, that would definitely have a major impact in the current case,” thus whether the deponent's “testimony is admissible or will lead to discoverable evidence cannot be determined until his deposition is taken”);  Palo Duro Pipeline Co., Inc. v. Cochran, 785 S.W.2d 455, 457 (Tex.App.—Houston [14th Dist.] 1990, orig. proceeding) (holding that the trial court did not abuse its discretion in ordering the production of settlement agreements as relevant where the requesting parties alleged a conspiracy regarding gas purchasing and the settlement agreements included data regarding gas purchasing);  cf.  In re Xeller, 6 S.W.3d 618, 626 (Tex.App.—Houston [14th Dist.] 1999, no pet.) (concluding that requests for production relating to conspiracy allegations were overbroad, vague, and constituted attempts to “fish” through the relators' files).

Under the specific circumstances at issue in this case, considering both the pleadings and the evidence before the trial court, we conclude that the trial court acted within its broad discretion in ordering the production of the documents at issue as relevant to Castro's pleaded theories regarding conspiracy and agency.  See Walker, 827 S.W.2d at 839–40;  In re VERP Inv., LLC, 457 S.W.3d at 260.  The documents at issue are reasonably calculated to lead to the discovery of admissible evidence insofar as they may indicate the number and nature of the transactions between the parties.  The documents are further relevant concerning the accuracy of the conflicting testimony regarding the number of transactions entered between some of the parties.  In producing these documents, we caution the parties to ensure that the privacy rights of third parties, if any, in these documents are fully protected.

V. Conclusion

The Court, having examined and fully considered the petition for writ of mandamus, the response, the supplemental briefing, and the applicable law, is of the opinion that Box has not met his burden to obtain mandamus relief.  State ex rel. Young, 236 S.W.3d at 210.  Therefore, the petition for writ of mandamus is DENIED.  See Tex.R.App. P. 52.8(a).



Memorandum Opinion by Justice Rodriguez 1 FN1. See Tex.R.App. P. 52.8(d) (“When denying relief, the court may hand down an opinion but is not required to do so.”);  Tex.R.App. P. 47.4 (distinguishing opinions and memorandum opinions).

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