IN RE JERRY A. BULLIN, INDIVIDUALLY, CJB PARTNERS, LTD., AND ITS GENERAL PARTNER CJB PARTNERS MANAGEMENT, LLC, AND BRE GROUP, LTD IN RE TEXAS PRIVATE SCHOOLS FOUNDATION, INC. D/B/A ALLEN ACADEMY
Chief Justice Gray, Justice Davis, and Justice Scoggins.
cause number 10-16-00271-CV, relators, Jerry A. Bullin,
individually, CJB Partners, Ltd., and its general partner CJB
Partners Management, LLC and BRE Group, Ltd. (collectively
"Bullin"), contend that the trial court abused its
discretion by ordering the production of
adjusted-gross-income ("AGI") and taxable-income
("TI") figures for tax years 2008, 2012, and 2013.
In a competing petition for writ of mandamus in cause number
10-16-00343-CV, relator, Texas Private Schools Foundation,
Inc. d/b/a Allen Academy, contends that the trial court
abused its discretion by denying its request to compel Bullin
to produce AGI and TI figures for tax years 2009, 2010, and
original submission, we denied both petitions for writ of
mandamus. See generally In re Bullin (In re Tex. Private
Sch. Found., Inc.), Nos. 10-16-00271-CV &
10-16-00343-CV, 2017 Tex.App. LEXIS 7352 (Tex. App.-Waco Aug.
2, 2017, orig. proceeding) (mem. op.). However, since our
denial of the mandamus petitions, the parties have filed
motions for rehearing, as well as motions to transfer
in-camera records from a previous mandamus petition involving
the same parties. See generally In re Bullin, No.
10-15-00423-CV, 2016 Tex.App. LEXIS 2604 (Tex. App.-Waco Mar.
10, 2016, orig. proceeding) (mem. op.). In the current
proceedings, the parties submitted records that included
Bullin's heavily-redacted tax returns that did not reveal
his AGI or TI for the relevant time periods. But, in the
prior proceeding, the in-camera records contained
Bullin's partially redacted tax returns that disclosed
AGI, TI, and charitable-contribution figures, but redacted
other information. Therefore, for the purpose of analyzing
the motions for rehearing, we granted the parties'
motions to transfer the in-camera records from the prior
Bullin mandamus proceeding. And after reviewing the record,
we grant Bullin's motion for rehearing, withdraw our
memorandum opinion and judgments issued August 2, 2017, and
substitute the following in their place. We conditionally
grant Bullin's petition for writ of mandamus and dismiss
as moot Allen Academy's petition for writ of mandamus.
relief is available only to correct a "clear abuse of
discretion" when there is no adequate remedy by appeal.
Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992)
(orig. proceeding). Clear abuse of discretion occurs when a
trial court "reaches a decision so arbitrary and
unreasonable as to amount to a clear and prejudicial error of
law." Id. at 839 (citing Johnson v. Fourth
Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig.
proceeding)). When reviewing factual issues, the reviewing
court may not substitute its judgment for that of the trial
court. Id. at 839-40. Even if the reviewing court
would have decided the issue differently, it cannot disturb
the trial court's decision unless the decision if shown
to be arbitrary and unreasonable. Id. at 840.
scope of discovery is much broader than the scope of
admissible evidence. In re Exmark Mfg. Co., 299
S.W.3d 519, 528 (Tex. App.-Corpus Christi 2009, orig.
proceeding); see In re Pilgrim's Pride Corp.,
204 S.W.3d 831, 835 n.8 (Tex. App.-Texarkana 2006, orig.
proceeding) ("Relevance should not be confused with
admissibility. Admissibility is not required for information
to be discoverable." (citing Tex.R.Civ.P. 192.3(a);
Axelson, Inc. v. McIlhany, 798 S.W.2d 550, 553 (Tex.
1990))). Nevertheless, the determination of the scope of
discovery is generally within the trial court's
discretion. Dillard Dep't Stores, Inc. v. Hall,
909 S.W.2d 491, 492 (Tex. 1995). Discovery requests, however,
must be reasonably tailored to include only matters that are
relevant to the case. Texaco, Inc. v. Sanderson, 898
S.W.2d 813, 815 (Tex. 1995). When the trial court orders
discovery exceeding the scope permitted by the rules of
procedure, it abuses its discretion. In re CSX
Corp., 124 S.W.3d 149, 152 (Tex. 2003) (orig.
are entitled to seek discovery "regarding any matter
that is not privileged and is relevant to the subject matter
of the pending action." Tex.R.Civ.P. 192.3(a).
Information is relevant if it tends to make the existence of
a fact that is of consequence to the determination of the
action more or less probable than it would be without the
information. Tex. R. Evid. 401.
returns are treated differently than other types of financial
records, as evidenced by the Texas Supreme Court's
expressed "reluctance to allow uncontrolled and
unnecessary discovery of federal income tax returns."
Hall v. Lawlis, 907 S.W.2d 493, 494-95 (Tex. 1995)
(citing Sears, Roebuck & Co. v. Ramirez, 824
S.W.2d 558, 559 (Tex. 1992) (per curiam)). This is because
federal income tax returns are considered private and the
protection of that privacy is of constitutional importance.
Maresca v. Marks, 362 S.W.2d 299, 301 (Tex. 1962).
The sacrifice of such privacy should be "kept to a
minimum, and this requires scrupulous limitation of discovery
to information furthering justice between the parties which,
in turn, can only be information of relevancy and materiality
to the matters in controversy." Id. Therefore,
unlike when other types of financial information are sought,
after a resisting party objects to the production of tax
returns, the burden shifts to the party seeking to obtain the
documents to show that the tax returns are both relevant and
material to the issues in the case. El Centro del Barrio,
Inc. v. Barlow, 894 S.W.2d 775, 779 (Tex. App.-San
Antonio 1994, no writ); see Hall, 907 S.W.2d at 494.
Allen Academy sought AGI, TI, and charitable-contribution
figures from Bullin's tax returns for the tax years 2008
through 2013. The purpose for the request was to show that
"'notes' actually representing charitable
donations were executed by Allen Academy at Bullin's
request for his 'tax and accounting purposes' with no
expectation of repayment." After a hearing, the trial
court ultimately concluded that Allen Academy was entitled to
the AGI, TI, and charitable-contribution figures from
Bullin's tax returns for tax years 2008, 2012, and 2013,
but not for tax years 2009, 2010, and 2011. In his mandamus
petition, Bullin argues that the trial court abused its
discretion by requiring him to produce AGI and TI figures
from his tax returns for tax years 2008, 2012, and 2013. In
essence, Bullin contends that none of the AGI and TI figures
for tax years 2008 through 2013 should be produced, whereas
Allen Academy asserts that the figures should be produced for
all of the relevant tax years.
mandamus record shows that Bullin contributed large sums of
money to Allen Academy. Many of these contributions were
initially loans, as documented by the numerous promissory
notes contained in the mandamus record. Allen Academy
acknowledges that it executed promissory notes with Bullin;
however, Allen Academy argues that it is not liable on the
notes because Bullin expressed that he would later forgive