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Texas Supreme Court Weekly Update July 16, 2021

On Behalf of | Jul 16, 2021 | Texas Supreme Court Weekly Update

Over the last several weeks the court has issued several opinions and grants. This blog discusses two opinions which addresses issues of particular interest.

First, in WWLC Investment L.P. v. Sorab Miraki, the Texas Supreme Court considered whether there was proper service on a limited partnership when process was served on an employee who was described as CEO, president, and owner. WWLC Investment (Plaintiff), a Texas limited partnership, was seeking a bill of review to vacate a default judgment against it by Miraki (Defendant). Plaintiff contends that process was not properly served. The evidence established that the Defendant only served an employee who was described as CEO, president, and owner. But a limited partnership’s agents for service of process are its registered agent and its general partner. The trial court denied all relief because they believed that the employee that was served had to be considered Plaintiff’s general partner. The court of appeals affirmed.

The Texas Supreme Court disagreed and held that the Plaintiff demonstrated that it was not properly served. The Court reasoned that unlike service on a corporation, service on a limited partnership Is not authorized to be made through an officer. Although the trial court in this case found that the person served was the only person involved with the Plaintiff, this fact alone does not qualify the employee as a general partner of the Plaintiff. A general partner of a limited partnership is defined as someone who is admitted to a limited partnership as a general partner according to the governing documents of the partnership.

Next, in In re USAA General Indemnity Co., the Texas Supreme Court considered (1) whether the trial court abused its discretion when it ordered the USAA corporate representatives to be deposed before the injured driver got a judicial determination of preconditions establishing the insurer’s liability or (2) whether the requested deposition topics are overly broad. This case involved principal issues in an underinsured motorist claim between an insurance carrier, USAA, and its insured, Wearden. In this case, the insured sued its insurance carrier to recover benefits under his policy’s underinsured-motorist provisions; however, the insured  claimed no bad-faith or other extracontractual claims. The insurance carrier claimed an affirmative defense that the insured did not comply with all the conditions necessary to recover. They also claimed that the liability of the driver who hit the insured’s vehicle and the nature and extent of the damages have not been established by judgment or agreement. The trial court denied the insurance carrier’s motion to quash, and then the appellate court denied the insurance carrier’s mandamus petition.

The Texas Supreme Court held that the insured is entitled to depose the carrier’s corporate representative, but the deposition topics exceeded the scope of the deposition. The insurance carrier claims that the trial court abused its discretion by not quashing the insured’s deposition notice because none of their employees have relevant information pertaining to the wreck at issue. But when insurance carriers investigate their insureds’ claims, they are bound to uncover pertinent information regarding the insured and the insured’s defense, and thus the insured argues that he should be able to learn what the insurance carrier knows about the wreck. The Court reasoned that entitlement to underinsured motorist benefits is a prerequisite to extracontractual bad-faith claims. A plaintiff cannot obtain discovery on an unasserted, abated, or unripe bad faith claim under the guise of investigating a claim for benefits. Because of the narrow scope of the crash in dispute, the Court concluded that some of the insured’s noticed deposition topics exceed the scope of appropriate discovery. However, the Court confirmed that information that the insurance carrier has that is not privileged and is relevant to the existence and amount of damages at issue is discoverable information. The Court noted that an insurance carrier may establish that proportionality concerns foreclose the deposition, but that here the carrier failed to do so. Therefore, the Court held that the trial court abused its discretion by denying the carrier’s motion to quash the overbroad deposition topics.

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