Opinion
05-21-00846-CV
01-30-2024
A-RENT TEST EQUIPMENT, LLC, Appellant v. SHERMCO INDUSTRIES, Appellee
On Appeal from the 44th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-20-16200.
Before Justices Molberg, Reichek, and Breedlove
MEMORANDUM OPINION
KEN MOLBERG, JUSTICE
A-Rent Test Equipment, LLC appeals the trial court's order partially granting a protective order for Shermco Industries and denying certain discovery sought by A-Rent. A-Rent filed a petition for writ of mandamus making the same challenge, and we consolidated the two proceedings in this cause. For the reasons explained below, we affirm the trial court's order and deny the petition for writ of mandamus as moot in this memorandum opinion. See Tex. R. App. P. 47.4.
Background
A-Rent sued Electrical Controller Products Company (ECP) and others in district court in Harris County. A-Rent claimed ECP failed to pay for and return electrical test equipment ECP rented from A-Rent and sub-rented to its customers, including Shermco.
During the discovery process, A-Rent subpoenaed Shermco, which was not a party to the Harris County suit, seeking "all documents, including but not limited to invoices, receipts, purchase orders, bills of lading, shipment records, check-in/check-out records, logs, and correspondence, related to each of the [fifty-one items of equipment Shermco] rented or acquired [by sublease] from [ECP or related entities], from February 1, 2020 to the present." A-Rent also sought all documents indicating the current location of each of the same fifty-one pieces of equipment Shermco rented or acquired from ECP. A-Rent later withdrew this latter request at the hearing on the protective order.
The separate items included transducers, cables, gas analyzers, ratiometers, and other items.
In response to the subpoena, Shermco filed an original petition for protective order in a Dallas district court under rule of civil procedure 176.6. Shermco argued ECP, not Shermco, was in the best position to provide the information sought by A-Rent and that there was "no reason for A-Rent's discovery against Shermco, other than as an unfair competitive tactic to harass Shermco and to obtain competitive information from Shermco." Thus, Shermco argued, the subpoena subjected it to undue burden, unnecessary expense, harassment, and annoyance pursuant to rule 192.6(b). Shermco also argued the subpoena improperly demanded confidential business information, namely, the prices, terms, and uses of its equipment; was overly broad and not reasonably tailored to any possible need in the litigation; wrongly attempted to force Shermco to produce documents more than 150 miles from Harris County; and was unenforceable for lack of proper witness fee and lack of payment for document production. Included with the petition was the declaration of Kim Drake-Loy, Shermco's Chief Legal and Risk Officer, in which she stated "the documents sought in A-Rent Test Equipment's discovery subpoena to Shermco Industries are confidential business information that are not meant to be disclosed to other companies and are subject to a non-disclosure agreement with [ECP]." Drake-Loy subsequently filed an additional unsworn declaration with the court, stating that documentation relating to what equipment was rented from ECP by Shermco would have been received from or provided to ECP; Shermco returned to ECP each item listed in A-Rent's discovery subpoena; and Shermco no longer had any of the rental items listed in the subpoena.
A-Rent responded, arguing Shermco failed to show the discovery sought by A-Rent was obtainable from another more convenient source, or that the subpoena subjected it to undue burden, unnecessary expense, harassment, or annoyance.
At the hearing on the petition, Shermco made two main arguments. First, it contended A-Rent could obtain from ECP itself documentation of what Shermco rented or acquired from ECP-the party to the Harris County lawsuit. Second, it argued that because it had returned the equipment in question to ECP, "it would be much easier to ascertain the current location of these items from ECP[.]" Shermco argued rule of civil procedure 192.4 protected it against the discovery sought by A-Rent because the request was duplicative and could be obtained from another, more convenient source, namely ECP. Shermco also contended the documents sought by A-Rent contained confidential business information that could give A-Rent a competitive advantage "by knowing how Shermco prices its rental equipment with ECP" and that "putting out the ECP prices that we rent the equipment" at "could potentially put [Shermco] at a disadvantage." Shermco argued the court should also consider tailoring the first request. Shermco argued it was entitled to a protective order under rule 192.6.
In response, A-Rent argued there was a "developing dispute about nonpayment of rental amounts owed by ECP to A-Rent for the equipment it rented[.]" A-Rent conceded "there may be similar documentation in the hands of both Shermco and ECP[,]" but stated "you never know what one has and what another has, what one may have in addition to or different from the other, and what one may find in its search for documents and end up producing in the discovery process." A-Rent clarified that, after its subpoena issued, the equipment in question was returned to ECP from Shermco, and then from ECP to A-Rent, so there was no longer "any dispute . . . about evidence regarding the current location . . . of the equipment." Accordingly, A-Rent withdrew its request for documents relating to the location of the equipment.
The trial court denied Shermco's request for protection based on duplication. The court stated it understood why A-Rent needed invoices, receipts, and purchase orders but questioned A-Rent why it needed bills of lading, shipment records, check-in and check-out logs, and correspondence. A-Rent responded that it was not prepared to articulate "any different basis for each of those items," but argued that Shermco's petition was supported only by conclusory statements and presented no evidence. The trial court noted Shermco had objected to the document request as overly broad, "so I have to rule on that objection," and asked A-Rent why it was not overly broad. Pointing to the Harris County suit between A-Rent and ECP, A-Rent responded, "[W]e filed a lawsuit for claims of breach of contract and conversion and other things about getting our money and our equipment back," and ECP countersued asserting claims for breach of contract, misrepresentation, tortious interference, and unfair competition, claims which involve "all sorts of details and facts regarding the underlying events: not just the rentals, but the refusal to pay, the refusal to return the equipment, the extent to which Shermco may have been involved in any of this." A-Rent argued that simply because a document request seeks documents that may not be relevant does not mean the request is improper.
The court further inquired how the requested items "are going to lead to admissible evidence in your case." A-Rent responded that documents regarding rental amounts, payments, and anything about discussions between Shermco and ECP regarding the rentals and amounts owed could potentially implicate the facts relevant to claims on both sides-not just its claims, but ECP's broader counterclaims against A-Rent.
A-Rent argued that, without further briefing on why Shermco claimed the items sought were not discoverable, it was not prepared to make further argument. A-Rent argued Shermco's assertions in support of its request for a protective order were "merely conclusory." A-Rent argued it was Shermco's burden to show it was entitled to relief. Shermco responded that it had not "heard really any real argument defending or answering [the court's] question of why the things that are actually listed in the subpoena aren't overbroad."
The trial court granted Shermco's petition for protective order and denied discovery, "except as to invoices, receipts, and purchase orders for the specific items listed in the Subpoena." This appeal followed.
Discussion
A. Appeal or mandamus
After bringing its direct appeal, A-Rent filed a petition for writ of mandamus when we initially questioned our jurisdiction over the appeal. On our own motion, we consolidated the mandamus proceeding into this one. Thus, before we reach the merits of the question before us, we must determine whether we have jurisdiction to hear this matter as an appeal or whether mandamus is instead the proper remedy.
An order or judgment is final for purposes of appeal if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). Put somewhat differently, a judgment which settles all the legal issues and rights between the parties is final and appealable "though further proceedings may be necessary in the execution of it or some incidental or dependent matter may still remain to be settled." Hinde v. Hinde, 701 S.W.2d 637, 639 (Tex. 1985). Because the law does not require that a final judgment be in any particular form, whether a judicial decree is a final judgment must be determined from its language and the record in the case. Lehmann, 39 S.W.3d at 195.
The trial court's order here is final and appealable because it disposed of all issues between the parties. In this proceeding, Shermco, which is not a party to the lawsuit in Harris County, sought a protective order under Texas Rule of Civil Procedure 176 by filing an independent action in Dallas County. The parties presented no other claims or issues in this proceeding. Thus, when the trial court granted Shermco relief in part, denied other relief, and rendered a protective order, no issues or claims remained pending before the court.
Shermco points to our decision in Icon Benefit Administrators II, L.P. v. Mullin, 405 S.W.3d 257 (Tex. App.-Dallas 2013, no pet.), arguing the protective order is not a final, appealable order. But in that case, the underlying lawsuit between the parties had concluded and the appellant purported to appeal the trial court's postjudgment decision whether the public disclosure of an audit was prohibited by a pretrial protective order. Id. at 261. We said there that "the final judgment was the trial court's November 2010 order dismissing with prejudice all claims and counterclaims raised by the parties," and an order entered over a year later declaring that disclosure of the audit was not prohibited by protective order and denying the motion to enforce the protective order was not a final judgment. Id. Consequently, review of the postjudgment order was properly by petition for writ of mandamus. Id. at 261-62.
Here, by contrast, Shermco is not a party to the Harris County lawsuit, no part of which is before us. In this proceeding, Shermco filed a petition for protective relief, and the trial court disposed of the issues raised by the petition in issuing a protective order. Therefore, A-Rent properly appeals from a final order. Cf. Allibone v. Freshour, No. 03-17-00357-CV, 2017 WL 5663607, at *1 (Tex. App.-Austin Nov. 21, 2017, pet. filed) (mem. op.) (direct appeal of protective order sought independently of lawsuit). Accordingly, we conclude the protective order is a final order, and we have jurisdiction over this appeal.
Because we review the protective order by appeal, we deny A-Rent's petition for writ of mandamus as moot. See In re H.E.B. Grocery Co., 492 S.W.3d 300, 304 (Tex. 2016) (orig. proceeding) (per curiam) (mandamus relief will not be granted when there is a remedy by appeal); Centennial Psychiatric Assocs., LLC v. Cantrell, No. 14-17-00380-CV, 2017 WL 6544283, at *4-5 (Tex. App.-Houston [14th Dist.] Dec. 21, 2017, no pet.) (mem. op.).
B. Protective order
The scope of discovery is generally within the trial court's discretion, "but the trial court must make an effort to impose reasonable discovery limits." In re Graco Children's Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (orig. proceeding). "A person commanded to appear at a deposition, hearing, or trial, or to produce and permit inspection and copying of designated documents and things, and any other person affected by the subpoena, may move for a protective order under Rule 192.6(b) . . . ." Tex.R.Civ.P. 176.6(e). Such a motion may be made either in the court in which the action is pending or in a district court in the county where the subpoena was served, and it must be made before the time specified for compliance. Id. Rule 192.6(b) provides that a trial court, in order to protect the movant from undue burden, unnecessary expense, harassment, annoyance, or invasion of personal, constitutional, or property rights, may order in the interest of justice (1) the requested discovery not be sought in whole or in part; (2) the extent or subject matter of discovery be limited; (3) the discovery not be undertaken at the time or place specified; (4) the discovery be undertaken only by such method or upon such terms and conditions or at the time and place directed by the court; or (5) the results of discovery be sealed or otherwise protected, subject to the provisions of Rule 76a. Id.
The discovery rules "explicitly encourage trial courts to limit discovery when 'the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.'" In re Alford Chevrolet-Geo, 997 S.W.2d 173, 181 (Tex. 1999) (orig. proceeding) (quoting Tex.R.Civ.P. 192.4(b)).
A party seeking protection must show facts of a particular, specific, and demonstrable injury sufficient to justify a protective order. Blankinship v. Brown, 399 S.W.3d 303, 312 (Tex. App.-Dallas 2013, pet. denied). The party may not simply make conclusory allegations that the requested discovery is unduly burdensome or unnecessarily harassing but must produce some evidence supporting its request for a protective order when sought on that basis. Id. To decide whether a protective order is appropriate, a trial court balances the parties' competing interests. Eurecat US, Inc. v. Marklund, 527 S.W.3d 367, 376 (Tex. App.-Houston [14th Dist.] 2017, no pet.). We review a trial court's decision to grant a protective order for an abuse of discretion. Buholtz v. Gibbs, No. 05-18-00957-CV, 2019 WL 3940973, at *5 (Tex. App.-Dallas Aug. 21, 2019, pet. denied) (mem. op.). A trial court abuses its discretion by limiting discovery in the absence of some evidence supporting the request for a protective order. Id.
On the record before us, we conclude the trial court did not abuse its discretion in limiting the scope of discovery. Shermco produced some evidence that A-Rent's requested discovery was unduly burdensome. Drake-Loy stated in her declaration that documents covered by the subpoena included confidential business information not meant to be disclosed and were subject to a non-disclosure agreement with ECP. She further stated, in her second declaration, that documentation relating to equipment rented from ECP was "received from or provided to ECP," and that Shermco returned to ECP each item listed in the subpoena and no longer had any items listed in the subpoena. Thus, Shermco provided some evidence that the party to the litigation, ECP, possessed any documents sought by A-Rent, and that requesting from Shermco "all documents" relating to the items listed in the subpoena was unduly burdensome.
Moreover, the trial court allowed discovery of invoices, receipts, and purchase orders relating to the items listed in the subpoena, and in response to Shermco's arguments, A-Rent failed to articulate any basis for discovery of additional documents beyond invoices, receipts, and purchase orders. See Assoun v. Gustafson, 493 S.W.3d 156, 167 (Tex. App.-Dallas 2016, pet. denied) (concluding trial court did not abuse discretion in limiting third-party discovery when appellant "could not document any particular reason for the production of additional documents"). A-Rent's contention that you "never know . . . what one may find in its search for documents" does not suffice, because unlike depositions and interrogatories, "requests for document production may not be used simply to explore." In re Volt Power, LLC, No. 12-23-00047-CV, 2023 WL 2804430, at *9 (Tex. App.-Tyler Apr. 5, 2023, no pet.) (mem. op.) (quoting Dillard Dep't Stores, Inc. v. Hall, 909 S.W.2d 491, 492 (Tex. 1995)).
Given the above, we cannot conclude the trial court erred in exercising its discretionary weighing of "the burden or expense of the proposed discovery" versus its "likely benefit" when it partially granted Shermco's petition for protective order. See Alford, 997 S.W.2d at 181.
Conclusion
The trial court's order is affirmed.
JUDGMENT
In accordance with this Court's opinion of this date, the order of the trial court is AFFIRMED.
It is ORDERED that appellee SHERMCO INDUSTRIES recover its costs of this appeal from appellant A-RENT TEST EQUIPMENT, LLC.
Judgment entered.