PLAINTIFF’S TRIAL BRIEF REGARDING FINDINGS ON ACTUAL DAMAGES
Plaintiffs file this trial brief and would respectfully show the Court as follows:
Defendant argues that because compensatory damages are barred by the workers’ compensation statute, exemplary damages in this case are limited to $200,000 under section 41.008 of the Texas Civil Practice & Remedies Code. Nothing in the language of the statute or the relevant case law supports such a conclusion. Under the express mandatory provisions of section 41.008, the jury must determine the amount of economic and non-economic damages. The maximum amount of exemplary damages is calculated based on those amounts.
ARGUMENTS AND AUTHORITIES
In 1987, the supreme court held as a matter of judicial economy that a plaintiff in a gross negligence case against an employer should not be required to secure jury findings on the amount of actual damages. Wright v. Gifford-Hill & Co., Inc., 725 S.W.2d 712 (Tex. 1987). At the time Wright was decided, the Legislature had not enacted any limitations on exemplary damages in cases involving the gross negligence of an employer. Under the law as it existed in 1987, the amount of compensatory damages was not a factor in determining the amount of exemplary damages. Consequently, the Texas Supreme Court held that “an exact amount of actual damages is not necessary” and would be “a waste of the jury’s time and efforts.” Id. at 714. Therefore, “[i]n the interest of judicial economy,” the court ruled that a plaintiff was not required to secure jury findings on the amount of actual damages. Id. The court did not hold that the Legislature was prohibited from requiring such findings in the future.
In 1995, the Legislature did exactly that. The Legislature amended Tex. Civ. Prac. & Rem. Code § 41.008 to make it applicable in cases involving employers. See Acts 1995, 74th Leg., ch. 19, § 1. Under the statute, which is now applicable to cases against employers, the trier of fact “shall determine the amount of economic damages separately from the amount of other compensatory damages.” Tex. Civ. Prac. & Rem. Code § 41.008(a) (emphasis added). This determination of damages is then factored into a formula for setting limits on exemplary damages. This formula provides that:
Exemplary damages awarded against a defendant may not exceed an amount equal to the greater of:
- (A)two times the amount of economic damages; plus (B)an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or
Tex. Civ. Prac. & Rem. Code 41.008(b) (emphasis added). Under the plain language of the statute, a plaintiff is entitled to recover the greater amount. Because the amount of actual damages is now necessary to determine the cap, plaintiffs are entitled and indeed required to obtain jury findings on actual damages, even though those damages may not be recovered. Hall v. Diamond Shamrock Ref’g Co., L.P., 82 S.W.3d 5, 23-24 (Tex. App. – San Antonio 2001), rev’d on other grounds, 168 S.W.3d 164 (Tex. 2005). Under the language of section 41.008, the plaintiff “should be permitted to introduce evidence and obtain jury findings as to the amount of economic and noneconomic damages.” Id.
The central confusion in Defendants’ argument is a confusion between the compensatory damages found by the jury, which is what section 41.008(b) addresses, versus the compensatory damages that can actually be collected by a plaintiff, which section 41.008(b) does not address at all. The Texas Supreme Court explained this distinction quite cogently in Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1 (Tex. 1991). In Stewart, which involved a claim subject to the Insurance Code’s punitive treble damages provision, the jury found actual damages of $200,000. The plaintiff had already received $400,000 in settlements, so the remaining defendant argued that its treble damages were zero. Id. at 8. The Supreme Court explained the flaw in this reasoning:
There are two questions to be addressed. The first is whether there are any actual damages, and the second is whether these actual damages are recoverable by the plaintiff. The jury found actual damages of $200,000. Merely because actual damages are established by the jury does not necessarily mean that the plaintiff may recover them. The Insurance Code provides for the trebling of actual damages, not for the trebling of recoverable damages.
Id. at 9. Likewise, section 41.008(b) addresses damages found by the jury, not recoverable damages.
This distinction was applied in the context of exemplary damages caps in Beverly Enterprises of Texas Inc. v. Leath, 829 S.W.2d 382 (Tex. App. – Waco 1992, no writ). The court held that for purposes of determining the statutory exemplary damages cap, the court must look to the entire amount of damages, before any offsets for the defendant’s pretrial payments to the plaintiff. The court explained that “[p]retrial payments do not reduce the amount of ‘actual damages’ suffered by an injured party; they simply reduce the amount of damages which are recoverable by that party after a trial.” Id. at 387; see also I-Gotcha, Inc. v. McInnis, 903 S.W.2d 829, 840 (Tex. App. – Fort Worth 1995, writ denied) (explaining that purpose of using “actual damages” as a statutory baseline is to ensure that the amount of punitive damages are reasonably related to “the total amount of harm that occurred”). Similarly, the workers’ compensation statute does not negate the actual damages suffered by the decedent; the statute simply prevents the recovery of those damages.
On its face, Defendant’s interpretation of the statute is unreasonable. If the Legislature had intended to impose an absolute $200,000 cap in cases against employers, it could easily have done so. Instead, the Legislature deliberately chose to apply the existing statutory formula to cases against employers. The only logical explanation is that the Legislature intended for exemplary damages against employers to be calculated based on the economic and non-economic damages as found by the jury. Defendants have offered no plausible reason for this Court to disregard the mandatory language of section 41.008.
In all cases involving exemplary damages claims, section 41.008 requires that the amount of exemplary damages be limited based on the amount of economic and non-economic damages found by the jury. The Defendant’s request for an absolute $200,000 limit has no basis in the law.