C & H Nationwide, Inc. v. Thompson
| Decision Date | 22 June 1994 |
| Docket Number | No. D-1326,D-1326 |
| Citation | 903 S.W.2d 315 |
| Parties | C & H NATIONWIDE, INC., Edward Stanton Webber, and Ecotech International, Inc., Petitioners, v. Linda Gail THOMPSON, Individually and as Executrix of the Estate of Gary Wayne Thompson et al., Respondents. |
| Court | Texas Supreme Court |
Randall D. Wilkins, Houston, James K. Peden, III, Dallas, H. Lee Lewis, Jr., Houston, Edward J. Hennessy, Houston, for petitioners.
Lee L. Kaplan, Andrew Schirrmeister, III, Dale Harvill, Houston, for respondents.
PHILLIPS, Chief Justice, delivered the opinion of the Court as to Parts I, II, III, & V, in which GONZALEZ, HIGHTOWER, HECHT, CORNYN, ENOCH and SPECTOR, Justices, join, and an opinion as to Part IV, in which HIGHTOWER and SPECTOR, Justices, join.
Our prior opinions are withdrawn and the following is substituted. 1
In this wrongful death case we consider how liability is to be allocated among defendants under our Comparative Responsibility Law, TEX.CIV.PRAC. & REM.CODE ch. 33. We also conclude that the evidence in this case is insufficient to support an award of damages for lost inheritance, and that prejudgment interest may be awarded on future damages under TEX.REV.CIV.STAT.ANN. art. 5069-1.05, § 6(a) (Vernon 1986 & Supp.1994). The judgment of the court of appeals is reversed, 810 S.W.2d 259, and the case is remanded to the trial court for further proceedings.
Jerry Wayne Thompson was driving down the highway when a 40' piece of pipe weighing 1100 pounds fell off a truck coming toward him and hit his car. Thompson was killed. His wife and children brought this action to recover damages for Thompson's injuries and death. They sued four groups of defendants:
the lessor and driver of the truck, C & H Nationwide, Inc. and Edward Stanton Webber, respectively--collectively, "C & H";
the owners of the pipe, Shell Oil Company and Shell Western E & P, Inc.--collectively, "Shell";
the company from which the pipe was shipped, Energy Coatings Company; and
the company Shell hired to monitor the handling and loading of the pipe at the Energy Coatings facility, Ecotech International, Inc.
Before trial, Shell paid plaintiffs $3 million in full and final settlement of plaintiffs' claims against it. C & H also paid plaintiffs $3 million (in four installments) prior to trial, but not in full settlement of plaintiffs' claims. C & H's payments were made in accordance with a letter agreement between counsel for plaintiffs and C & H which stated that:
the money paid by C & H "will be treated as an advance toward any judgment which might be entered" against C & H or its insurers;
plaintiffs' pleadings would be amended to claim no more than $8.5 million actual damages because "in fairness" no greater amount should be sought, given the degree of responsibility C & H bore for the accident, as indicated by discovery;
plaintiffs' pleadings would also be amended to drop any claims of gross negligence or punitive damages against C & H because C & H was out of business and "the development of the case" had indicated that C & H "in all likelihood [was] not guilty of any conduct giving rise to a claim for punitive damages;
plaintiffs would indemnify C & H from liability in excess of $8.5 million on account of any claim by another defendant; and
plaintiffs would not settle with any other defendants without C & H's approval.
The agreement between counsel for C & H and the plaintiffs concluded:
The jury found each group of defendants negligent, allocating responsibility for causing the accident 50% to C & H, 30% to Ecotech, 15% to Shell, and 5% to Energy Coatings. The jury assessed the following damages:
pecuniary loss $1,600,000
loss of companionship and society 2,400,000
mental anguish 3,000,000
loss of inheritance 200,000
Thompson's pain and suffering before death 1,000,000
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In addition, the parties stipulated to funeral expenses of $5,720.35. Plaintiffs' damages thus totaled $8,205,720.35. The jury was not asked to, and therefore did not, segregate damages incurred in the past from those to be incurred in the future.
The court calculated prejudgment interest based upon a "principal" equal to the total damages found or stipulated--$8,205,720.35--reduced by settlement payments or offers from time to time during the period of accrual. Thompson was killed on November 18, 1987, and this action was filed ten days later. The trial court determined that prejudgment interest accrued from May 18, 1988, 180 days after suit was filed, until January 23, 1990, the date of judgment. C & H made its first payment of $100,000 to plaintiffs on May 6, 1988, and the trial court credited it against the "principal" as of May 18. C & H made its other three payments, one of $900,000 and two each of $1 million, on January 25, February 13, and February 17, 1989, respectively. The trial court found that Energy Coatings made written settlement offers to plaintiffs in the amount of $250,000 on April 3, 1989, and $750,000 on July 21, 1989. Although the court found that these offers terminated when jury selection began on September 26, 1989, the court did not accrue interest on these amounts after that date. The trial court found that Ecotech made a written settlement offer to plaintiffs in the amount of $100,000 on July 10, 1989, and that this offer remained extant to the date of judgment. Shell paid plaintiffs $3 million on July 20, 1989. Based upon these findings, the trial court calculated prejudgment interest at the rate of 10% per annum as follows:
PAID OR
DATE DAYS INTEREST OFFERED "PRINCIPAL"
11/18/87 $8,205,720.35
11/20/87
05/06/88 $ 100,000.00
05/18/88 $8,105,720.35
01/25/89 252 $ 559,627.82 $ 900,000.00 $7,205,720.35
02/13/89 19 $ 37,509.23 $1,000,000.00 $6,205,720.35
02/17/89 4 $ 6,800.79 $1,000,000.00 $5,205,720.35
04/03/89 45 $ 64,180.11 $ 250,000.00 $4,955,720.35
07/10/89 98 $ 133,057.70 $ 100,000.00 $4,855,720.35
07/20/89 10 $ 13,303.34 $3,000,000.00 $1,855,720.35
07/21/89 1 $ 508.42 $ 500,000.00 $1,355,720.35
01/23/90 186 $ 69,086.02
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The total interest thus calculated amounted to $884,073.43.
All three defendants that remained liable to plaintiffs--C & H, Ecotech, and Energy Coatings--elected under TEX.CIV.PRAC. & REM.CODE § 33.014(a) 1 to have the damages recovered by plaintiffs reduced by "the sum of the dollar amounts of all settlements", id. § 33.012(b)(1). 2 Accordingly, the trial court reduced plaintiffs' damages by the $6 million they received from Shell and C & H. Defendants disagreed, however, over how this reduction should affect their respective liabilities. We describe this disagreement in more detail below. In brief, Ecotech and Energy Coatings argued that the entire $6 million should be credited to plaintiffs' damages before liability was apportioned among the defendants. The credit would thus be shared by all three defendants, basically in proportion to the percentage of fault assigned each of them by the jury. C & H argued that Ecotech and Energy Coatings should not benefit from its payments to plaintiffs. Instead, C & H contended that plaintiffs' damages should be reduced only by the $3 million paid by Shell, and that liability apportioned among defendants. C & H argued that the $3 million it paid should be credited solely against its own liability. The trial court accepted Ecotech and Energy Coatings' argument and rejected C & H's.
Based on the jury's allocation of responsibility, the trial court held that C & H and Ecotech are jointly and severally liable to the plaintiffs for all damages awarded by the judgment, and that Energy Coatings is liable for 5/85ths of the judgment. C & H was given a right of contribution against Ecotech for 30/85ths of the judgment, and C & H and Ecotech were each given a right of contribution against Energy Coatings for 5/85ths of the judgment. The trial court denied Ecotech and Energy Coatings contribution against C & H.
The court of appeals reversed only one part of the trial court's judgment. 810 S.W.2d 259. The appeals court held that prejudgment interest should have been assessed on the difference between the total damages awarded and the settlement credit, or $2,205,720.35, rather than on the total damages awarded by the jury, or $8,205,720.35. The court remanded the case to the trial court to recalculate prejudgment interest. In all other respects the trial court's judgment was affirmed.
We first consider the proper allocation of liability among defendants under the Comparative Responsibility Law, TEX.CIV.PRAC. & REM.CODE §§ 33.001-.016.
C & H argues that the lower courts did not properly credit its pretrial payments to plaintiffs against its own liability. The trial court made the following calculation:
Total damages $8,205,720.35
Less payments from Shell -$3,000,000.00
Less payments from C & H -$3,000,000.00
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Judgment damages for plaintiffs $2,205,720.35
C & H's percent of fault (50%)
relative to the total for all
defendants but Shell (85%) x 50/85
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Amount C & H must pay before
entitled to contribution $1,297,482.56
The court of appeals affirmed this calculation, holding that C & H's payments, like Shell's, were "settlements" to be credited against plaintiffs' total damages under section 33.012(b)(1). C & H contends that its payments to plaintif...
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