*1 REPUBLIC INSURANCE
COMPANY, Relator, DAVIS, Paul R.
The Honorable
Jr., Respondent. Judge, D-2369.
No.
Supreme Court of Texas.
June
Rehearing Overruled June Houston, Walker, Terry
Jerry O. Tot- V. Austin, tenham, Schaffer, W. Dean A. Hall, Antonio, for relator. San Wendell Wham, Jr., McCaffrey, Mark Patrick DeShazo, Austin, Houston, Gary F. W. Houston, Ellis, III, Stephen L. Richard Hubbard, Dallas, Margaret Uhlig, F. Jan Austin, Soifer, Douglass, Gregory David C. Houston, Williams, Longley, Aus- Joe K. D. tin, respondent.
OPINION ENOCH, Justice. calls for the reso
This mandamus First, the “of does of two issues. lution waiver, by this enunciated fensive use” Ap Court court Fifth (Tex.1985),apply peals, 686 S.W.2d Second, privilege? does ex communications subsequent litigation? We con tend “offensive use” clude waiver, potentially applicable while attorney-client privilege, apply does case. conclude that the We also privilege does extend to communication any lawsuit which does not involve claims precipitated the communication. Be cause the trial court abused discretion *2 edged pro- owed ordering production pro- of documents it the reinsurance by attorney-client privilege, however, tected ceeds; we compet- was faced with conditionally grant the writ of mandamus.1 ing enjoined pay- it was from demands as anyone ing them to but the Receiver. Re-
I. public pay pro- to the reinsurance offered Republic (“Repub- Insurance Company registry pending ceeds into the of the court lic”) policies certain reinsured issued dispute. sought Republic resolution of the County National Mutual Fire Insurance (1) a declaration it did not have an (“National Company County”). One of obligation proceeds pay to reinsurance policies those was issued to Culver Con- Culver, Canal, plaintiffs, to the Trevino (“Culver”). policy provided crete Davis; (2) Reginald sole obli- and/or $500,000 primary coverage, with the gation of National was to Receiver $50,000 being by Republic. first reinsured County; (3) any duty it did not and owe Davis, employee, Reginald A Culver was Culver, Canal, plaintiffs, the Trevino involved in an accident in The truck Reginald conjunction Davis in with and/or driven Reginald Davis struck and killed or separate from reinsurance contract. Ezequiel representa- Trevino. Trevino’s Republic injunction against an suits, tives and filed survivors two Canal, Culver, plaintiffs, Trevino and eventually consolidated, against were Cul- Reginald preventing them from mak- Davis Reginald ver and Davis. Prior the con- ing any proceeds. claim the reinsurance suit, clusion of the Trevino National Coun- Culver, plaintiffs, Regi- The and Trevino ty placed receivership. into was against nald Davis filed counterclaims Re- County National was declared public. allege The counterclaims claims placed liquidation insolvent and into and Act, Deceptive under the Trade Practices receivership. As a of National Coun- Code, the Insurance and common law. The ty's liquidation, a temporary perma- and Culver, Reginald plaintiffs, Trevino and injunction nent was prohibiting any- issued Republic Davis is liable for contend one County with assets of National from $19,000,000judgment. disposing of those assets. The reinsurance contract County, is an asset of National that, fact, allege The counterclaims Republic enjoined and was disposing from Republic took over the direct administra- proceeds anyone the contract to tion and of certain National settlement except County. the receiver of National County policies, including policy issued against Trevino lawsuit Culver Culver, therefore, and Republic became and Reginald ultimately Davis resulted covering the primary policy insurer on the $19,000,000 judgment being entered allege that, Culver. The Trevinos also de- against Reginald Culver Davis. After spite knowing that the value of claims entered, the Trevino against asserted the Trevinos Culver Culver, plaintiffs, Davis, Reginald and Ca- Reginald Davis exceeded the limits on nal Company Insurance all made demands having op- policy, despite Culver’s Republic proceeds. on for the reinsurance portunity poli- to settle those claims within limits, cy
Republic
Republic wrongfully
refused to
filed
ac-
County.
tion in
Republic
Travis
acknowl-
settle the case.2
order,
has,
effect,
original respondents
signing
Judge
in this mandamus
Davis
Judge
Judge
action were
Joe
adopted
signed
Judge
Dibrell and
Peter
the orders
Dibrell.
Lowry. Judge
initially
M.
Dibrell
ordered the
Judge
respon
been
Davis has
substituted as
production of the documents which are the sub
dent.
case, however,
ject
dispute.
of this
Judge Lowry’s
docketed
court.
case was
Reginald
2. All
action that
causes of
Culver
eventually transferred to the 200th District
against Republic have
Davis could assert
been
Court, Judge
presiding.
Sep
Paul R. Davis
On
assigned
to the Trevinos
order of the trial
Judge
signed
tember
Davis
order
court.
requiring Republic
produce
Insurance to
all
subject
Judge
By
documents
Dibrell’s orders.
counterclaims,
opportunity
Republic did not have
After the initiation of the
reaching
plaintiffs
Consequently,
without
object.
the Trevino
served
request
production
question
objection
of documents.
of whether an
request.
objections to the
asserted
has
required, we conclude
*3
in this context.
not waived error
discovery objections
The
were heard be-
Judge
fore
Joe
referred the
Dibrell who
special
special
dispute to a
master. The
III.
report
heard
master
evidence and issued
attorney-client privilege
The
as embodied
9,
trial
to the
court on March
503(b) secures the free
in Tex.R.Civ.Evid.
special master
recommended that some
attorney and
flow of information between
produced despite the fact
documents be
client, and it assures that the communica-
Republic
established
the docu-
v.
will not later be disclosed.
tion
West
attorney-client
protected
ments were
(Tex.1978).
Solito,
Al-
563 S.W.2d
special
report
The
master’s
con-
discovery
though the aim of the modern
Republic
its
although
cluded that
met
bur-
process
yield
complete
full and
infor-
privi-
attorney-client
den to establish the
regarding
dispute,
mation
the issues
lege,
under
had been waived
importance
recognize
courts
special
recom-
Ginsberg. The
master also
attorney-client
com-
privilege. Confidential
documents, for which
mended that certain
promote
legal
munications
effective
servic-
Republic
party communication
asserted the
promotes
This in turn
the broader so-
es.
special
privilege,
produced. The
master
be
administra-
cietal interest of
effective
determined that the
communication
Upjohn
v.
justice.
tion of
Co.
United
inapplicable
privilege was
because the com-
383, 389,
States,
101 S.Ct.
449 U.S.
munication had
in connection with
occurred
(1981).
682,
its counsel received need openness and the tween the desire for report on March 1992. The same attorney-client rela confidentiality in 11, 1992, signed day, Judge March Dibrell scope attor by restricting the tions special an order that tracked the master’s County ney-client privilege. Duval See recommendations. Co., 663 v. Alamo Lumber Ranch Co. (Tex.App. S.W.2d — Amarillo II. n.r.e.); ref’d In re LTV Securities writ We must first determine whether (N.D.Tex. Litigation, 89 F.R.D. Republic preserved complaints its for our privi 1981) (stating object spe review. did not to the broadly no more lege is to be construed report cial before the trial court master's purpose). necessary its than to effectuate adopted report. parties real whether determine This case calls for us to interest contend that has waived ever can party’s for information need any special objection it had to the master’s outweigh associated benefits report object because failed to attorney-client privilege. report prior adoption by the trial court.3 A. record reflects that the trial court seek informa- in interest
adopted special report parties before real master’s report. copy protected tion received its that is n.r.e.); appeals suggest ref'd Novot (Tex.App. writ 3. Some decisions courts of — Dallas (Tex.App.— special Novotny, object ny must master’s that a report dism’d). adopts Because See [1st Dist.] before the trial court it. Mar Houston issue, Martin, pass on we do not (Tex.App.— tin we do not reach Co., 1990, writ); objection is re McCrory question whether an Texarkana & Inc. Avery Mays quired. Constr. privilege. They contend that our decision Hosp., Yale-New Haven 192 Conn. (1984)). establishes a waiver “offen- 470 A.2d The facts in sive use” of the privilege.4 Ginsberg Gaynier mandated that Mrs. ei- We must determine whether there is a psychotherapist ther her waive attorney- offensive use of the relief, pursue her claim for affirmative privilege, is, if there whether or maintain her her abandon Relator its attorney-client privilege. waived cause of action. Id. at 107-08.
Ginsberg involved trespass
try
title
suit.
claimed that he owned a
B.
building by virtue of two deeds. One deed
Five
courts
have considered
*4
Gaynier
was from a Mr.
Ginsberg
to
con-
the issue of
in the
waiver
offensive use
veying his
building.
interest
After
five,
attorney-client context. Of those
four
died,
Gaynier
Ginsberg
Mr.
Gay-
had Mrs.
applied
hold that the offensive waiver
ratifying
nier execute a deed
the deed her
attorney-client
privilege; the fifth held
signed.
husband
Ginsberg, 686 S.W.2d at
that the offensive waiver was limited to the
facts of Ginsberg
applicable
and
was
years
Gaynier
Almost ten
later Mrs.
attorney-client
privilege.
brought
trespass
try
action,
title
apply
The first case to
the Ginsberg of
claiming
forged
the first deed was
and that
fensive use waiver
she
fraudulently
sign
induced to
privilege
Rearick,
was DeWitt and
Inc. v.
second deed.
deposition
Id. At
she testi-
Ferguson,
Mrs.
resisted disclosure of
employees
$400,000
Inc. and two of its
records on the
basis
the psychotherapist-
damages.
Rearick,
in actual
DeWitt
patient privilege.
rejected
This Court
attempted
her
upon
Inc.
to determine the basis
claim privilege.5
so,
In doing
this court which the sisters had settled their suit. Id.
relied on the notion that
plaintiff can- The sisters
they
upon
testified that
settled
“[a]
not use one hand to seek affirmative
counsel; however,
relief
they
advice of
re-
in court and with the other lower an iron
divulge
fused to
the basis and theories
against
curtain of silence
perti-
otherwise
upon
made,
which the settlement was
as-
proper questions
nent and
serting
the attorney-client privilege.
Id.
bearing upon
right
his
Rearick,
maintain his DeWitt and
responded
Inc.
action.” Id. at 108 (quoting Pavlinko v.
sisters’
privilege by arguing
claims of
West,
4. This issued confronted the
support
court in
its
on Fifth Amendment cases. See
S.W.2d at
but the issue was not reached as
Ginsberg,
Id.
167.
at
attorney-client privi-
the
court found that
appeals
The court of
concluded that
lege
un-
for certain documents
was waived
review,
filing
required the
the bill of
Id. at 188.
Ginsberg
der the
rationale.
prove
in the
wife to
any
entered without
First,
divorce
disagreed.
appeals
The court of
part,
on
her
negligence
her
the wife waived
that this case
appeals
the court of
noted
at 168. The
privilege.
Id.
proof of a defense
was not one in which
appeals
presented
court of
noted that this
discovery
if the
might
precluded
be
attorney-client priv-
an offensive use of
permitted.
Although the documents
Id.
review,
By filing the bill of
the wife
ilege.
knowledge and
might
reveal Cantrell’s
knowledge
knowledge
placed her
and the
mind,
litiga-
in the
factors
state of
relevant
agent
attorney directly
of her
in is-
—her
—
tion,
litigated
can be
without
those factors
sue.
Id.
undermining
attorney-client privilege.
Id. The
on to determine that
court went
The court in Public
Comm’n v.
Util.
Ginsberg holding
limited to the
Lighting &
must be
Houston
Power
sought
plaintiffs
recently,
mandamus
6.
the court
in Westh
now
Most
,
Tennant,
Today,
(Tex.App.—
in this
we overrule the
C. other offensive use factors. case to next examine facts this We waiv- determine whether offensive use court its discretion trial abused guidelines er were met. We conclude Republic produce documents ordering case has been no there protected attorney-client privilege. Packer, See Walker (Tex.1992). seeking Republic is not affirmative Republic declaratory judg relief. did file action, declaratory IV. but a necessarily an action for affir action is argues that the trial court and relief.12 The Civil Practice mative by ordering pro- its discretion abused De provides Remedies Texas Code protected by par- of documents duction claratory Judgments Act is “remedial” privilege. Republic con- ty communication 37.- only. Tex.Civ.Prac. § Rem.Code & is- party cedes that the communications at 002(b). “to That act serves settle generated contemplation sue were not uncertainty inse to afford relief from They or in course of this suit. were status, curity respect rights, with refers to as generated what Id. “The legal purpose other relations.” litigation involving the “pending, parallel” statute], as [declaratory judgment of facts and some same nucleus terms, its own is to declare evidenced parties. Republic urges that these same status, rights, rela existing legal or other party privileged communications should be Burrows, tions.” Emmco Ins. Co. v. in this suit. (Tex.Civ.App. Tyler — privilege is party communication writ) omitted). (emphasis The statute 166b(3)(d). rule reads in found in rule ground as an cannot be invoked affirmative part: recovery rights or or revise alter such rep- agents Communications between Id. legal relations. employees of a resentatives or the a declaration of its obli- seeks to the action or communications between gations respect pro- the reinsurance agents, repre- party’s and that *7 that it requests ceeds. It also a declaration made when sub- employees, sentatives or plaintiffs, the owed no duties to Trevino sequent the occurrence or transaction Culver, Canal, Reginald Finally, or Davis. and in con- upon is which the suit based injunction prohibit
it an would seeks prosecution, investiga- with nection the parties filing from a same lawsuit suit, particular tion or defense of uni- proceeds. the reinsurance recover anticipation prosecution or in fying factor seeks is relief part the claims made defense pending litigation is, reality, in that all of it in defensive exempt from [are reject the of the nature. We contentions discovery]. Republic’s parties real in interest de- 166b(3)(d) (emphasis added). Tex.R.Civ.P. seeking is claratory judgment type requires language result in an of this rule affirmative relief would communication, to privi Because reach be offensive use waiver. we seeking leged, during anticipation is or in of the the conclusion that not occur Inc., Scientific, jurisdictions rea Russell Curtin 493 Other have followed Hearn’s v. Matheson 456, (S.D.Tex.1980). See, F.Supp. Turner, 458 soning. e.g., Conkling v. F.2d 883 Cir.1989); 431, (5th Forge Valley 434 Co., Lorenz hold, concurring dis- 12. We do not as the 1095, (7th Cir.1987); 815 Ins. F.2d 1099 senting opinion implies, that action under Servs., Syndicate Business Inc. v. 809 GAB Declaratory Judgment may Act never consti- (11th Cir.1987); 762 n. 11 In re Consol. F.2d There be occasions tute affirmative relief. Litig. Concerning Disposition Int'l Harvester's relief when a couches affirmative in Steel, (N.D.Ill. F.Supp. Wis. 666 1150-51 form of a action. In such case, 1987); Deposit Corp. may apply. Federal Ins. v. United the offensive States, (S.D.W.Va.1981); F.Supp. 527 This is not such an occasion. 950-51
165 particular disagree paragraph suit I with the last privilege which the is states, holdings majority Our where the asserted. have consis- Part III-B been time, See language tent with the rule. three are of the the first “factors” which Turbodyne Corp. Heard, “rigorous” corresponding than the more (Tex.1986); Robinson v. Harkins feder- 804 elements for offensive-use waiver in Co., (Tex.1986). & 711 Hearn al statement courts. recognize litigant (E.D.Wash.1975), Rhay, repeat While we that a F.R.D. must be able to fashion a to each adequate: defense is suit, ignore express cannot lan- we (1) assertion guage Party of the rule. communications act, an affirmative as fil- result of such generated in connection or in an- with (2) suit, by the asserting party; ticipation particular of the in antici- suit or act, through this affirmative the assert- pation of the part claims made put ing party protected information litigation pending which the is by making it issue relevant are not privileged. asserted (3) case; application
# [*] [*] [*] [*] [*] would have denied the opposing party access to information vital to his defense. are confident We that the trial court will See, Turner, vacate the order e.g., Conkling v. September dated F.2d proceed it will Valley (5th Cir.1989); and that Lorenz v. accordance with opinion. (7th A will Forge writ of Ins. mandamus 815 F.2d only issue if it Inc. v. Cir.1987); does not. GAB Business Servs. Syndicate n. 11 809 F.2d Concurring and dissenting opinion by (11th Cir.1987). This court should GAMMAGE, J., DOGGETT, joined by J. adopt an more even restrictive standard determining when offensive use GAMMAGE, Justice, concurring and has occurred. dissenting. disagree I strongly majority’s with the I agree parts with I majori- and II of the perspective Declaratory Judgment ty opinion. Republic given must be “seeking Act counterclaim as not affirma- opportunity object special mas- tive the statute states is relief.” report ter’s before be can held to nothing, “remedial” means since a number objection have waived agree to it. .1 are “remedial” been statutes which part III-A and most of III-B of the held affirmative relief.1 The to authorize opinion. majority This court’s authority majority cites a no- opinion sets forth an use” ex- “offensive Burrows, case, Emmco Ins. Co. v. ception to certain privileges, logical (Tex.Civ.App. Tyler — conclusion from our opinions own well —as *8 writ), declaring no refers to “exist which as opinions the better-reasoned of our status, ing rights, legal or other relations.” of attorney- courts —is Declaratory hardly describes Ginsberg subject client is Judgment Act. agree I doctrine. also IV of the opinion. majority Declaratory Judgment requires communica- Act particular is controversy an actual re- tions limited to the will be anticipation suit or suits in solved between parties of which the it two before United v. communications are made. Servs. Ins. Co. apply. can Life See, Hale, e.g., 258, (1951) (insurance Corp. reg Nuclear Am. 355 S.W.2d v. Tex. 803 239 of (N.D.Tex.), statutes); F.Supp. aff’d, ulatory Dep't 197 F.2d 479 1045 Castaneda v. Texas of 5472e, Cir.1973) (former (5th Agric., contrac (Tex.App. Corpus article 831 S.W.2d — statute, Act, Tex.Prop. (Whistle denied) tor’s trust fund now codified writ Christi Blower’s 162.001-.033, 6252-16a, §§ but remedial creates art. Code Tex.Civ.Stat.Ann. has a remedial Ann. action); Witty Cap. purpose); cause of v. Gen. Property American National Farmers Union Distrib., Inc., (Tex. 1987) (Tex. Degollado, 727 S.W.2d Cos. Co. v. 844 S.W.2d nature"); (wrongful denied) (Texas death App. statute "is remedial writ Workers’ — Austin remedial). Ins. Com’rs Compensation Board v. Great S. Ins. Act of Life (Tex.1965); declaratory judgment action—as the suit Delaney, 396 S.W.2d itself debt would be. City collect contested Eng’rs Board San Water Antonio, 111, 114-15, 283 155 Tex. there is Disagreeing with the conclusion (1955); Harrington, 724-25 Cobb use,” disagree I no “offensive 360, 369-70, 713- 144 Tex. 190 S.W.2d protect majority documents the would few (1945). authorizes, at trial court’s It special protected. should be master discretion, attorney’s prevailing fees judges several district who re- 37,009. party. Tex.Civ.Prac. & Rem.Code § properly this matter concluded that viewed fact, sought Republic originally In attor the at- Ginsberg offensive use waived counterclaim, though it fees in ney’s its torney as these docu- request. The court’s later withdrew peti- Accordingly, deny I would ments. declaratory judgment in a entirety. tion for writ of mandamus mandatory prohibitory or may include a Pletcher, 727 S.W.2d injunction. Davis v. J., DOGGETT, joins concurring in this (Tex.App. Antonio — San dissenting opinion. n.r.e.); Tex.Civ.Prac. & Rem.Code ref’d losing party may subject the 37.011. It § injunctive contempt order. subsequent Garland, City Valley Oil Co. v. (Tex.Civ.App. 335-36 — Dallas writ).2 why is There no reason apply seek should a relief, just
ing declaratory judgment as types relief. The does to suits for other Texas, Appellant, The STATE every consequences can be bit as devastat declaratory judg ing litigant under a action.3 SANCHEZ, Appellee. Enrique Juan Black, In Abor v. No. 168-91. (Tex.1985),although admittedly in a venue context, the use of a this court condemned Texas, Appeals Court Criminal declaratory “preemp- judgment action as a En Banc. plaintiff’s strike” on a claim. tive just a cause to make such 23, 1993. June preemptive plaintiffs’ strike to defeat liability through grounds party-stand- issue as a raised attempt liability by cut off
action. This every is procedural declaration bit as
much an “offensive use” under judgment. money a suit to recover a
as way, a to declare one does
Put another suit debt because some
not owe contested every defense” to debt
“affirmative *9 use” in the Gins-
bit as much an “offensive though brought it is aas
berg sense—even jority holding subsequent action concludes a was that a in- 2. The actual appropriate. opinion meaning junction Jus- use” within the is never "offensive sets forth decisions from other tice Guittard merely Ginsberg. at 164 n. 12. I having jurisdictions De- enacted the Uniform declaratory many point out that in instances claratory Judgments Act to demonstrate use.” amounts to “offensive contempt enforcement sanction. view, quali- my Republic’s cause suit as one such instance. fies claims, Contrary majority I do not to what the imply imply that the ma- and do not intend to