In Re Dwight Capital, LLC v. the State of Texas
04-25-00081-CV
Tex. App.Jul 2, 2025Background
- Terravista, owner of a multi-family apartment HUD Portfolio, hired Dwight Capital to obtain HUD-backed refinancing and bridge loans between 2017–2019.
- Terravista claims Dwight Capital improperly delayed HUD financing, coerced acceptance of unfavorable bridge loans, and colluded to seize management, causing bankruptcy and asset sales.
- Dwight Capital argues a 2019 settlement resolved disputes, but Terravista asserts the settlement is invalid and filed suit alleging fraud, breach of contract, and other claims.
- In discovery, Terravista sought seven categories of documents from Dwight about regulatory actions, including a 2022 $16 million HUD settlement.
- The trial court compelled production of all requested categories; Dwight Capital sought mandamus relief, claiming the requests were overbroad, irrelevant, or unduly burdensome.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Overbreadth of RFPs 48 & 49 | Documents about other agency actions are relevant to the case | Not limited to relevant subject matter; covers unrelated matters | Order as to RFPs 48 & 49 is overbroad; mandamus relief granted as to those requests. |
| Scope of RFPs 46 & 47 | Actual/threatened HUD actions are directly relevant | Bundled with RFPs 48/49 objections, no separate justification | Orders for RFPs 46 & 47 are reasonable; mandamus relief denied. |
| Relevance of HUD 2022 Settlement (RFPs 50, 51, 52) | Potential overlap in facts/claims makes settlement discoverable | No connection to Terravista or its allegations; confidential | Orders for RFPs 50, 51, 52 are proper; mandamus relief denied. |
| Discovery Burden/Confidentiality | Needed for the case; no undue burden shown | Disclosures are sensitive, burdensome | Defendant failed to preserve/establish these objections below; relief denied. |
Key Cases Cited
- In re Sw. Bell Tel. Co., 235 S.W.3d 619 (Tex. 2007) (mandamus standard and clear abuse of discretion)
- In re Nat’l Lloyds Ins. Co., 449 S.W.3d 486 (Tex. 2014) (overbroad discovery is an abuse of discretion)
- In re CSX Corp., 124 S.W.3d 149 (Tex. 2003) (scope and liberal standard for discovery)
- In re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999) (purpose and limits of discovery)