In re Park Cities Bank
409 S.W.3d 859
| Tex. App. | 2013Background
- Anderton and Cawley formed partnerships to develop The Cascades; Bellwood borrowed ~$13.8M from Park Cities Bank (the Bank) and Anderton/others guaranteed the note.
- Relations soured; Bank notified Bellwood of default in Feb 2009 for unpaid 2008 taxes; Bank paid $114,456.46 in taxes on June 30, 2009; BOT (an entity formed by Cawley) issued a check to the Bank that same day.
- Bank later sold the loan to BOT, BOT foreclosed and obtained a deficiency judgment against Anderton; Anderton sued Relators (Bank and related parties) alleging fraud among other claims.
- Anderton served 65 requests for production; Relators asserted attorney-client, work-product, and common-interest privileges and filed privilege logs and a protective-order motion; the trial court overruled most privilege claims and ordered production without extensive in camera review.
- Relators sought mandamus; the appellate court reviewed whether the trial court abused discretion by (a) finding no anticipation of litigation for much of the relevant period and (b) ordering production without in camera review, and also considered waiver of non-privilege objections.
Issues
| Issue | Plaintiff's Argument (Anderton) | Defendant's Argument (Relators) | Held |
|---|---|---|---|
| Whether Relators waived privilege by not timely objecting to RFPs | Relators failed to make specific written objections within 30 days, so privileges waived | No time limit for asserting privilege; privilege not waived by missing general objection deadline | Privilege claims not waived for failure to timely object; no waiver of privilege |
| Whether documents are protected by work-product and attorney-client privileges | Anderton invoked crime-fraud exception and argued documents not privileged or waiver occurred | Relators produced affidavits establishing prima facie privileges for many log entries; documents prepared in anticipation of litigation and confidential communications | Trial court abused discretion by ordering production of documents identified as privileged without at least in camera review; mandamus granted to vacate order |
| Whether crime-fraud exception applies to overcome privileges | BOT payment, Bank’s demand for reimbursement, and loan sale show scheme; exception should apply | Testimony shows BOT check presumed purchase, not reimbursement; Anderton failed to show fraud nexus to privileged documents | Anderton failed to make prima facie showing of crime-fraud exception or nexus; exception not established |
| Whether non-privilege discovery objections were waived by general/prophylactic objections or by filing a protective order | Anderton: general objections and reservation were insufficient; objections waived | Relators: filing motion for protective order preserves objections and avoids waiver | Court held general/prophylactic objections and reservation to assert later were waived; filing a protective order did not excuse compliance with Rule 193 timing |
Key Cases Cited
- In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) (mandamus standards for discovery disputes)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus relief when trial court exceeds discretion and appeal inadequate)
- In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218 (Tex. 2004) (prima facie showing and in camera review for privilege claims)
- In re Weekley Homes, L.P., 295 S.W.3d 309 (Tex. 2009) (limits on compelled discovery and mandamus availability)
- In re Monsanto Co., 998 S.W.2d 917 (Tex.App.-Waco 1999) (work-product and privilege burden-shifting principles)
- Nat’l Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) (anticipation of litigation standard for work product)
- Trevino v. Ortega, 969 S.W.2d 950 (Tex. 1998) (anticipation of litigation can precede actual notice)
- In re Small, 346 S.W.3d 657 (Tex.App.-El Paso 2009) (crime-fraud exception requires prima facie showing and nexus)