law-punitive-damages | exemplary damages | gross negligence |
PUNITIVE DAMAGES AWARDS | EXEMPLARY DAMAGES
The purposes of punitive damages are to deter and punish culpable conduct. Horizon/CMS
Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000); see TEX. CIV. PRAC. & REM. CODE §
41.001(5) (providing that exemplary damages, including punitive damages, are “damages awarded as
a penalty or by way of punishment”).
The Legislature has set out several factors to be considered when determining the amount of
exemplary damages. These include the nature of the wrong, the character of the conduct involved,
the wrongdoer’s degree of culpability, and the situation and sensibilities of the parties. Id. § 41.011.
Evidence about what Mrs. Guerra planned to do with any punitive damages was not relevant to
proving any of these factors or to penalizing or punishing SCI. See TEX. R. EVID. 401; see also
Honeywell v. Sterling Furniture Co., 797 P.2d 1019, 1021 (Or. 1990) (“[I]nstructing a jury that a
portion of any punitive damage award will be used to pay the plaintiff’s attorney or to contribute to a
worthy cause, such as help for victims of crime, does nothing to further or even to inform the jury as to
the proper goals of punitive damage awards. Instead, the instruction distracts the jury from the
appropriate line of analysis that this Court has said a jury should follow in cases involving potential
awards of punitive damages . . . .”). SCI v. Guerra, No. 09-0941 (Tex. Jun 17, 2011)(Johnson)
In Nabours v. Longview Sav. & Loan Ass’n, 700 S.W.2d 901, 903 (Tex. 1985), the Texas Supreme
Court reaffirmed the general rule that in order to recover punitive damages, a plaintiff must “allege,
prove and secure jury findings on the existence and amount of actual damages sufficient to support
an award of punitive damage.” In discussing the argument made in a dissenting opinion which is
similar to the argument being made by Long, the Texas Supreme Court asserted that in every case in
which punitive damages have been allowed incident to equitable relief, “the equitable relief has
involved the return of property to the injured party.” Id. at 904 n.3. The court rejected the contention
that bare injunctive relief would support a punitive damages award. Id. The court also noted that in
the case cited by appellant in support of his argument, the jury “made findings of the fair market value
of the property returned to the plaintiff.” Id. at 904-05.
In Re Columbia Med. Center of Las Colinas, Inc., No. 09-0733 (Tex. Mar. 12, 2010)(per curiam)
(exemplary damages reduced by mandamus after post-appeal final judgment)
IN RE COLUMBIA MEDICAL CENTER OF LAS COLINAS, INC. D/B/A LAS COLINAS MEDICAL
CENTER; from Dallas County
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally grants the writ of mandamus.
Per Curiam Opinion [pdf]
View Electronic Briefs in 09-0733 IN RE COLUMBIA MED. CTR. OF LAS COLINAS, INC.
Punitive damages awards that are statutorily capped are required to be recalculated when the actual
damages against which they are measured are reduced on appeal. See, e.g., Gunn Infiniti, Inc. v. O’
Byrne, 996 S.W.2d 854, 861 (Tex. 1999) (vacating mental anguish damages because of legally
insufficient evidence and reforming the judgment to reflect recalculated Deceptive Trade Practices Act
damages at three times economic damages); Gen. Chem. Corp. v. de la Lastra, 852 S.W.2d 916, 924
(Tex. 1993) (remanding for a recalculation of the punitive damages cap because wrongful death
damages must be excluded); see also Seminole Pipeline Co. v. Broad Leaf Partners, Inc., 979 S.W.2d
730, 760–61 (Tex. App.—Houston [14th Dist.] 1998, no pet.) (“Because the award for . . . mental
anguish is vacated, the punitive damage cap and prejudgment interest must be recalculated.”).
Indeed, the Hogues do not dispute that an order expressly requiring a reduction of the punitive
damages award would have been proper. The question presented here, though, is whether our
judgment had that effect.
Although our judgment did not expressly address the amount of punitive damages, the statute
capping punitive damages as measured against economic damages requires a reduction in punitive
damages as a matter of law. See Gen. Chem. Corp, 852 S.W.2d at 924. We hold that, regardless of
whether an appellate court judgment expressly commands it, trial courts must give effect to statutory
caps on damages when the parties raise the issue. Accordingly, to give full effect to our judgment
vacating a portion of economic damages, the trial court was required to reduce the punitive damages
award in compliance with the statutory cap. By failing to do so, the trial court abused its discretion.
A corporation is liable for punitive damages if it authorizes or ratifies an agent’s malice. Mobil Oil Corp.
v. Ellender, 968 S.W.2d 917, 921 (Tex. 1998). “In Texas for purposes of legal proceedings, subsidiary
corporations and parent corporations are separate and distinct ‘persons’ as a matter of law.” Valero
South Tex. Processing Co. v. Starr County Appraisal Dist., 954 S.W.2d 863, 866 (Tex. App.—San
Antonio 1997, pet. denied). Accordingly, a subsidiary corporation could be an agent of its parent if the
evidence supported such a finding.
Fairfield Ins. Co. v. Stephens Martin Paving, LP, No. 04-0728 (Tex. Feb. 15, 2008)(Justice
Wainwright) (insurance coverage and indemnification of punitive damages arising from gross
The Court answers the question certified by the United States Court of Appeals for the Fifth Circuit.
Justice Hecht delivered a concurring opinion, in which Justice Brister, Justice Medina, and Justice
Justice Johnson delivered a concurring opinion.
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