TRIAL COURT’S PREEMPTIVE SANCTIONS IN QUESTIONING WITNESS IN UNDERINSURED MOTORIST CLAIM HELD TO BE ABUSE OF DISCRETION

August 22, 2011

The Dallas Court of Appeals recently concluded that a trial court’s limitation of deposition questions to an insured seeking underinsured motorist benefits regarding the any diagnosis and treatment received after his deposition in the tort underlying case,  combined with a preemptive sanction of $100 for every question asked that was covered in the prior deposition, was an abuse of discretion.

In In re State Auto Property & Casualty Insurance Company, 2011 WL 3528266 (Tex. App. – Dallas, August 12, 2011), the insured settled with the other party after giving his deposition but before trial.  He pursued underinsured motorist benefits and State Auto sought discovery and the insured’s deposition. The insured filed a motion to quash seeking to limit the deposition to developments that occurred after the first deposition.  The trial court agreed, even imposing preemptive sanctions for any questions previously asked in the underlying liability case. State Auto filed a petition for writ of mandamus.

The Dallas Court of Appeals observed that State Auto was not a party to the underlying lawsuit and defense counsel for the other party was not affiliated, nor did they communicate with State Auto in any way. Accordingly, the court concluded that the trial court’s order denying discovery prevented State Auto from developing or presenting viable claims.  This was found to be an abuse of discretion for which an appellate remedy would be inadequate and the Dallas court conditionally granted State Auto’s petition for writ of mandamus directing the trial court to vacate its order on the motion to quash and for preemptive sanctions.