                                       In The

                                Court of Appeals

                    Ninth District of Texas at Beaumont

                               __________________

                               NO. 09-19-00285-CV
                               __________________

       IN RE SAM HOUSTON ELECTRIC COOPERATIVE, INC.
__________________________________________________________________

                          Original Proceeding
             253rd District Court of Liberty County, Texas
                     Trial Cause No. CV1510279
__________________________________________________________________

                          MEMORANDUM OPINION

      Relator Sam Houston Electric Cooperative, Inc. (“SHEC”) filed a petition for

writ of mandamus, in which it asks this Court to compel the trial court to vacate its

order compelling the depositions of its Board of Directors and to grant its motion for

protection from the depositions. We conditionally grant the writ of mandamus.

                                 BACKGROUND

      Joe D. Berry (“Berry”), individually, on behalf of the surviving heirs and

children of Lester B. Berry (“Lester”), as next friend of Kevin M. Berry, and as

administrator of the Estate of Lester B. Berry, filed this suit against SHEC, alleging


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that SHEC shut off power to the home of Lester B. Berry without proper notice,

“causing horrendous suffering to and ultimately the awful death of Lester Berry.”

According to Berry, Lester was disabled and required an oxygen concentrator around

the clock, and to work properly the oxygen concentrator needed a constant supply

of electricity. Berry asserted causes of action for negligence, gross negligence,

survival, and wrongful death.

       In his second amended petition, Berry purported to assert a class action “as

representative of all others similarly situated,” and he added individual defendants,

who he alleged were current officers, directors, advisory directors, or advisory

directors-at-large of SHEC. Berry pleaded, among other things, that SHEC had

breached its fiduciary duties by failing to return margins periodically to its members

as required by statute, and that rather than operating as a nonprofit entity, SHEC was

confiscating each member’s equity. Additionally, Berry asserted that SHEC had

failed to retire capital credits.

       SHEC and the individual defendants moved to compel arbitration and to stay

the class action claims pending arbitration. The trial court signed an order denying

the motion, and the defendants appealed. On appeal, this Court reversed the trial

court’s order and remanded the cause for entry of an order compelling arbitration

and staying further proceedings as to the class action claims pending arbitration. Sam

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Houston Elec. Coop. v. Berry, No. 09-16-00346-CV, ___ S.W.3d ___, 2017 WL

4319849, at *7 (Tex. App.—Beaumont Sept. 28, 2017, no pet.) (not yet released for

publication). The trial judge signed an order severing the class action from the

wrongful death and survival claims.

      Berry then filed a motion in the wrongful death and survival portion of the

lawsuit to compel the depositions of the members of SHEC’s Board of Directors. In

the motion, Berry asserted that he had a right to take the depositions because the

Board grants an applicant membership into SHEC and the Board would have

knowledge of Lester’s membership. Attached to the motion to compel was, among

other things, a letter from defense counsel stating that no deposition dates would be

offered because members of the Board “have no personal knowledge relevant to this

lawsuit.”

      SHEC responded to the motion to compel and argued that the plaintiffs were

“effectively ignoring the court ordered severance of the class action claims from the

current survival and wrongful death actions.” SHEC alleged that the depositions

were unrelated to the pending lawsuit and constituted an abuse of process.

Additionally, SHEC asserted that the plaintiffs had not explained the relevance of

the Board members’ depositions and that the depositions were impermissible under

the apex doctrine. According to SHEC, the deposition notices constituted “an

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attempt to obtain discovery related to the severed putative class action – not the

wrongful death allegations currently pending before the Court.” SHEC asserted that

depositions of SHEC’s corporate representatives had been scheduled. The

mandamus record reflects that Berry’s counsel passed on the depositions of two

corporate representatives, whose depositions had been scheduled for June 13, 2019.

      Attached to SHEC’s response were the affidavits of the Board members, in

which they claimed that they lacked personal involvement with the acceptance of

Lester’s membership and in which they explained that they were generally involved

with strategic decision making at a high level, but they were not involved with or

personally aware of SHEC’s day to day operations and had no knowledge about the

circumstances surrounding Lester’s death or his relationship with SHEC. SHEC also

filed a motion to quash the depositions.

      Berry responded and asserted that he has a right to take the depositions of the

Board members “because it is permitted by the rules, despite the Board of

Directors[’] status as a nonparty in this case.” In addition, Berry asserted that the

requested depositions were reasonably calculated to lead to the discovery of

admissible evidence. According to Berry, each individual member of SHEC’s Board

“has unique and superior personal knowledge of the information sought, for

example[,] determining whether an applicant . . . is approved for a membership and

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disbursements of capital credits.” Berry argued that (1) SHEC’s documents

produced in response to written discovery requests clearly associated SHEC’s Board

of Directors to membership approval and control of capital credits, and (2) and each

individual board member has greater knowledge about the approval of applications

than the corporate representatives because applications must be approved by the

Board before membership is extended.

      Berry asserted that the individual Board members possessed greater

knowledge about the quality and quantity of capital credits because the Board

determines whether to pay capital credits. According to Berry, the apex doctrine does

not protect high-level corporate officials who have firsthand or personal knowledge

of particular facts. Berry contended that the Board members’ affidavits did not

sufficiently deny knowledge of relevant facts, but instead “simply states each

individual is not involved with the day to day operations of SHEC and was not

personally involved [in] the acceptance of Plaintiff’s membership.” Finally, Berry

asserted that less intrusive means of discovery were not required because the Board

members possessed “unique and superior personal knowledge of discoverable

information.” Berry’s fifth amended petition did not include the Board members as

parties to the lawsuit.



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      At the hearing on the motion to compel, SHEC’s counsel argued that the

Board members make policy and upper level decisions, but they have no superior or

unique knowledge about Lester’s death. SHEC’s counsel asserted that, once a

motion for protection has been filed, Berry must show that the Board members have

superior or unique knowledge and must make a good-faith effort to obtain the

discovery through less intrusive methods. SHEC’s counsel argued that the

depositions of the corporate representatives, which had been scheduled, did not

occur because Berry canceled them. In addition, SHEC’s counsel stated that Berry

had not shown that the Board members had any superior or unique knowledge and

pointed out that Berry’s response repeatedly mentioned capital credits, which are

unrelated to a cause of action for wrongful death.

      Berry’s counsel argued that because the Board had to approve every member

of the cooperative, he is entitled to depositions to find out “what knowledge they

had[]” and “if they reviewed the application.” According to Berry’s counsel, “if it is

as [SHEC is] saying and representing, it will be a very short deposition, because if

they don’t know anything, they don’t know anything. But we’re entitled to take their

deposition to find out what they know.” Berry’s counsel asserted that because the

Board had to approve applications for membership in the cooperative, Berry has a

right to take the depositions of the Board members. When SHEC’s counsel asked

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the trial judge to clarify for the record the unique or superior knowledge on which

the court was relying in granting the motion to compel, the following colloquy

occurred:

       [THE COURT]: He’s elicited sufficient facts that he wants to ask questions
of these board members, . . . he certainly has a right to take the deposition.

      ...

     [SHEC’s counsel]: So this Court has no finding of a unique or superior
knowledge?

      [THE COURT]: . . . I don’t need to make a finding today.

      [SHEC’s counsel]: Well, Your Honor, that’s what Crown says, that you do.

      [THE COURT]: Then appeal it.

      ...

      [THE COURT]: Your Motion to Compel is granted.

SHEC then filed an application for writ of mandamus. Berry did not file a response.

                                    ANALYSIS

      Mandamus will issue to correct a clear abuse of discretion when there is no

other adequate remedy at law. In re Alcatel USA, Inc., 11 S.W.3d 173, 175 (Tex.

2000) (orig. proceeding). A trial court abuses its discretion when its ruling is ‘“so

arbitrary and unreasonable as to amount to a clear and prejudicial error of law.”’ In

re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (orig. proceeding). A trial court has

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no discretion in determining what the law is or applying the law to the facts. Walker

v. Packer, 827 S.W.2d 833, 840 (Tex. 1992). “Mandamus relief is appropriate when

a trial court allows an apex deposition to go forward in violation of the standard

governing such discovery.” In re Miscavige, 436 S.W.3d 430, 435 (Tex. App.—

Austin 2014, orig. proceeding).

      “An apex deposition is the deposition of a corporate officer at the apex of the

corporate hierarchy.” AMR Corp. v. Enlow, 926 S.W.2d 640, 642 (Tex. App.—Fort

Worth 1996, orig. proceeding). The apex deposition rule applies when a party seeks

to depose a corporate president or other high-level corporate official. Crown Cent.

Petroleum Corp. v. Garcia, 904 S.W.2d 125, 128 (Tex. 1995). “To initiate the apex

protections, the party seeking to avoid deposition must move for protection and

attach an affidavit from the relevant corporate official denying any knowledge of

relevant facts.” In re Miscavige, 436 S.W.3d at 436.

      Once the party opposing the deposition has filed a motion for protection

accompanied by an affidavit from the official denying knowledge of relevant facts,

the trial court must first determine whether the party seeking the deposition “has

arguably shown that the official has any unique or superior personal knowledge of

discoverable information.” Crown Cent., 904 S.W.2d at 128. A person has unique

or superior personal knowledge if he is “the only person with personal knowledge

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of the information sought” or “arguably possesses relevant knowledge greater in

quality or quantity than other available sources.” In re Alcatel USA, 11 S.W.3d at

179. “If the party seeking the deposition cannot show that the official has any unique

or superior personal knowledge of discoverable information, the trial court should

grant the motion for protective order and first require the party seeking the deposition

to attempt to obtain the discovery through less intrusive methods.” Crown Cent., 904

S.W.2d at 128.

      As discussed above, SHEC filed a motion for protection and provided

affidavits from the individual Board members Berry sought to depose. In their

affidavits, the Board members stated they were not personally involved with the

acceptance of Lester Berry’s membership, that they lacked personal knowledge of

the facts surrounding Lester’s “passing” and they were not involved in the “day to

day operations” including “member communications or service termination.” The

record reflects that the trial court did not determine that the Board members

possessed unique or superior personal knowledge. There is no indication in the

record before us that the trial court determined that the Board members were the

only individuals with personal knowledge of the information sought or that the

Board members might possess relevant knowledge greater in quality or quantity than

other available sources. See In re Alcatel USA, 11 S.W.3d at 179. We agree with

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SHEC that the trial court abused its discretion by compelling the depositions of

SHEC Board members when Berry did not show that the Board members had unique

or personal knowledge about Berry’s alleged wrongful death cause of action. In

addition, potential knowledge of capital credits, which Berry advanced as one of the

subjects of the depositions, is not reasonably calculated to lead to the discovery of

admissible evidence in the underlying wrongful death cause of action. See Tex. R.

Civ. P. 192.3(a) (providing that the general scope of discovery includes unprivileged

information that is relevant to the subject of the action, as long as the information

sought is reasonably calculated to lead to the discovery of admissible evidence); Tex.

R. Evid. 401 (stating that evidence is relevant if it has any tendency to make a fact

of consequence more or less probable than it would be without the evidence).

       The trial court abused its discretion by ordering the depositions of SHEC’s

Board members without following the procedures set forth in Crown Central and its

progeny. We conditionally grant the writ of mandamus and order the trial court to

vacate its orders compelling the depositions of the members of SHEC’s Board of

Directors and orders denying the motions for protection against the apex depositions.

The writ will issue only if the trial court fails to do so.

       PETITION CONDITIONALLY GRANTED.

                                                              PER CURIAM

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Submitted on September 9, 2019
Opinion Delivered October 3, 2019

Before McKeithen, C.J., Kreger and Johnson, JJ.




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