in Re National Lloyds Insurance Company
449 S.W.3d 486 (2014)
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Rule of Law:
A discovery request for unrelated third-party insurance claim files is overbroad and impermissible if it is not reasonably calculated to lead to the discovery of admissible evidence regarding the plaintiff's specific claim, even if the request is limited by time and geographic scope.
Facts:
- In 2011 and 2012, storms caused damage to Mary Erving’s home in Cedar Hill.
- Erving filed two separate claims with her homeowner’s insurer, National Lloyds Insurance Company.
- National Lloyds retained two adjusting firms, Team One Adjusting, LLC, and Ideal Adjusting, Inc., to inspect Erving's property.
- Following the inspections, National Lloyds paid Erving on both of her claims.
- Erving believed that National Lloyds had undervalued her claims and had not paid her the full amount she was owed for the storm damage.
Procedural Posture:
- Mary Erving sued National Lloyds Insurance Company in a Texas trial court, alleging breach of contract, bad faith, fraud, and statutory violations.
- During discovery, Erving requested claim files of other National Lloyds policyholders.
- National Lloyds objected to the requests as overbroad and irrelevant.
- Erving filed a motion to compel, which the trial court granted in a limited form, ordering production of claim files from the same storms and city handled by the same adjusting firms.
- National Lloyds, the defendant, filed a petition for a writ of mandamus with the court of appeals, seeking to overturn the trial court's order.
- The court of appeals, an intermediate appellate court, denied relief to National Lloyds.
- National Lloyds then sought mandamus relief in the Supreme Court of Texas.
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Issue:
Does a trial court abuse its discretion by ordering an insurer to produce unrelated third-party claim files when a plaintiff seeks the information to establish a comparative 'baseline' to prove their own claim was undervalued?
Opinions:
Per curiam - Per Curiam
Yes. A trial court abuses its discretion by ordering the production of information that is not relevant or reasonably calculated to lead to the discovery of admissible evidence. How an insurer handled the claims of unrelated third parties is not probative of its conduct regarding the plaintiff's specific claims of undervaluation. Each claim involves numerous unique variables, such as pre-existing damage, the type and extent of damage, and when the claim was filed, making a comparison between claims an 'impermissible fishing expedition.' Even when a discovery order is narrowed by time and geography, it is still overbroad if the underlying information sought is not relevant to the subject matter of the case.
Analysis:
This decision significantly clarifies the scope of discovery in Texas insurance litigation by reining in plaintiffs' attempts to access an insurer's broader claim-handling practices. It establishes that a plaintiff cannot simply allege their claim was undervalued and then demand access to other policyholders' files to search for a pattern or comparison data. The court's holding protects insurers from overly broad 'fishing expeditions' that are burdensome and implicate the privacy of third-party insureds, forcing plaintiffs to focus discovery requests on evidence directly relevant to their own specific claim and adjustment process.
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