Owens-Illinois, Inc. v. Estate of Burt

• Decision Date: 27 April 1995
• Docket Number: 94-0262,Nos. 94-0259,INC,OWENS-ILLINOI,s. 94-0259
• Citation: 897 S.W.2d 765
• Parties: 38 Tex. Sup. Ct. J. 548 , Fibreboard Corp., Keene Corp. and Pittsburgh-Corning Corp., Petitioners v. ESTATE OF Otis BURT, Mable Burt, and Ronald Burt et al., Respondents., Fibreboard Corp., Keene Corp. and Pittsburgh-Corning Corp., Petitioners v. Erma Rae FRILEY, Individually and as Representative of the Estate of Joseph Friley, Respondents.
• Court: Texas Supreme Court

Page 765

897 S.W.2d 765

38 Tex. Sup. Ct. J. 548

OWENS-ILLINOIS, INC., Fibreboard Corp., Keene Corp. and Pittsburgh-Corning Corp., Petitioners v. ESTATE OF Otis BURT, Mable Burt, and Ronald Burt et al.,

Respondents.

OWENS-ILLINOIS, INC., Fibreboard Corp., Keene Corp. and Pittsburgh-Corning Corp., Petitioners v. Erma Rae FRILEY, Individually and as Representative of the

Estate of Joseph Friley, Respondents.

Nos. 94-0259, 94-0262.

Supreme Court of Texas.

Argued Nov. 16, 1994.

Decided April 27, 1995.

James H. Powers, Houston, Thomas M. Peterson, Meredith N. Landy, San Francisco, CA, Richard L. Scheer, David W. Starnes, Beaumont, James D. Miller, Paul J. Larkin, Jr., Kerrie C. Dent, Washington, DC, Kenneth C. Baker, Shelley Van Natter, Houston, Neil J. Kiely, Washington, DC, Catherine Masters Epstein, Chicago, IL, G. Luke Ashley, Jeffrey S. Boyd, Dallas, Michael K. Rose, Beaumont, John Cummings, San Francisco, CA, Nicholas S. Baldo, and R. Lyn Stevens, Beaumont, for petitioners.

John E. Williams and Richard N. Countill, Houston, for respondents.

ON APPLICATION FOR WRIT OF ERROR TO THE COURT OF APPEALS FOR

THE FIRST DISTRICT OF TEXAS

Justice HIGHTOWER delivered the opinion of the Court, in which all Justices join.

In these cases, we consider the appropriate method of calculating prejudgment interest under Cavnar v. Quality Control Parking, 696 S.W.2d 549 (Tex.1985), in personal injury and wrongful death cases involving an asbestos-related injury or disease or other latent injury or disease. Mable Burt, Individually and as Representative of the Estate of Otis Burt, Decedent, Ronald Burt, Kathy Hunter, Gloria Polumbo, and Erma Rae Friley, Individually and as Representative of the Estate of Joseph Friley, Decedent sued Owens-Illinois, Inc., Keene Corporation, Pittsburgh Corning Corporation and others. After a jury trial, the trial court rendered judgment for Plaintiffs. The court of appeals reversed and remanded. 870 S.W.2d 556. We hold that under Cavnar v. Quality Control Parking, prejudgment interest in personal injury and wrongful death cases involving an asbestos-related injury or disease or other latent injury or disease accrues from a date six months after the date the defendant received notice of the claim or the lawsuit was filed, whichever occurs first. We reverse that portion of the court of appeals' judgment concerning prejudgment interest for the Burt and Friley Plaintiffs and render judgment that Mable Burt, as Representative of the Estate of Otis Burt, recover prejudgment interest from and after September 22, 1985 until the date of the trial court's judgment, that Mable Burt, Individually, recover prejudgment interest on the sum of $17,100.00 from and after September 22, 1985 until the date of the trial court's judgment and that Erma Rae Friley, Individually and as Representative of the Estate of Joseph Friley recover prejudgment interest from and after July 27, 1985 until the date of the trial court's judgment.

On March 22, 1985, Otis and Mable Burt sued Owens-Illinois, Inc., Keene Corporation, Pittsburgh Corning Corporation (collectively "Owens-Illinois") and others for negligence, strict liability and other causes of action. After Mr. Burt's death, Mable Burt as Representative of the Estate of Otis Burt and family members were added as plaintiffs (collectively "Burt Plaintiffs" or "Plaintiffs"). On January 27, 1986, Joseph and Erma Rae Friley sued Owens-Illinois, Inc., Keene Corporation Pittsburgh Corning Corporation and others for negligence, strict liability and other causes of action. After Mr. Friley's death, Erma Rae Friley as Representative of the Estate of Joseph Friley was added as a plaintiff (collectively "Friley Plaintiffs" or "Plaintiffs"). These cases and others were grouped for trial. After a jury trial, the trial court rendered judgment for the Plaintiffs. Concerning prejudgment interest, the trial court ordered that the Estate of Otis Burt recover prejudgment interest from and after September 22, 1985 until the date of the judgment (August 7, 1991), that Mable Burt recover prejudgment interest on the sum of $17,100.00 from and after September 22, 1985 until the date of the judgment (August 7, 1991) ¹ and that the Friley Plaintiffs recover prejudgment interest from and after July 27, 1985 ² until the date of the judgment (August 7, 1991). Concerning prejudgment interest, the court of appeals held that accrual of prejudgment interest commences six months from the plaintiffs' last day of exposure to asbestos in the workplace. Since the record did not contain any evidence of the last day that Mr. Burt and Mr. Friley were exposed to asbestos in the workplace, the court of appeals reversed their judgments and remanded their causes to the trial court.

I.

Owens-Illinois argues that under Cavnar v. Quality Control Parking, 696 S.W.2d 549 (Tex.1985), prejudgment interest in personal injury and wrongful death cases involving an asbestos-related injury or disease or other latent injury or disease should accrue from a date six months after the date the defendant received notice of the claim or the lawsuit was filed. We agree.

In Cavnar v. Quality Control Parking, this court held that "[i]n wrongful death and non-death personal injury cases, interest shall begin to accrue on both pecuniary and non-pecuniary damages from a date six months after the occurrence of the incident giving rise to the cause of action." 696 S.W.2d at 555. Concerning survival actions, we held that "the decedent's estate is entitled to prejudgment interest either from the date of death or ...", if "the decedent lingers for more than six months after the date of the occurrence of the incident that gave rise to the cause of action, interest shall begin to accrue from a date six months after the cause of action accrues." Id. In permitting an award of prejudgment interest in wrongful death and personal injury cases, this court sought to accomplish several objectives--(1) encourage prompt and full compensation for plaintiffs, (2) expedite settlements and trials, and (3) remove incentives for defendants to delay as long as possible without creating incentives for plaintiffs to delay. Id. at 554. ³ "We recognize[d] that damages are typically incurred intermittently throughout the prejudgment period" and even though a "plaintiff is not entitled to recover prejudgment interest on damages until those damages have actually been sustained," Cavnar, 696 S.W.2d at 554, "a system which would force litigants to determine precisely when each element of a plaintiff's damages award was incurred would impose an onerous burden on both the trial bench and bar." Id. at 555. Furthermore, we acknowledged that "[s]ince no statute controls the award of prejudgment interest in personal injury cases, the Cavnars must rely upon equitable considerations in order to prevail on their prejudgment interest claim." Id. at 552.

In 1987, the legislature added section 6 to article 5069-1.05 of the Revised Civil Statutes of Texas. Section 6 requires that "[j]udgments in wrongful death, personal injury and property damage cases must include prejudgment interest." TEX.REV.CIV.STAT. art. 5069-1.05, § 6(a) (Supp.1995). Section 6 further states that

prejudgment interest accrues on the amount of the judgment during the period beginning on the 180th day after the date the defendant receives written notice of a claim or on the day the suit is filed, whichever occurs first, and ending on the day preceding the date judgment is rendered.

Id. However, section 6 applies only to actions commenced on or after its effective date (September 2, 1987), or to new trials or retrials following an appeal in an action commenced before the effective date. Act of June 16, 1987, 70th Leg., 1st C.S., ch. 3, § 3(a), 1987 Tex.Gen.Laws 51, 52. Since the Plaintiffs commenced their actions in 1985 and 1986, section 6 is not applicable and Cavnar controls the disposition of this case.

II.

In most cases, the application of Cavnar is uncomplicated because "the occurrence of the incident giving rise to the cause of action" will be self evident. However, in an asbestos-related injury or disease or other latent injury or disease case, the literal application of Cavnar is impossible because the injury or disease is not necessarily the result of any particular incident and there are potentially long latency periods between exposure and manifestation of harm. Although we cannot literally apply Cavnar in an asbestos-related injury or disease or other latent injury or disease case, we can consider the objectives this court sought to accomplish in Cavnar when determining when prejudgment interest begins to accrue. There are at least four possibilities under Cavnar of when prejudgment interest begins to accrue--six months ⁴ after (1) the date a worker was first exposed to asbestos in the workplace, (2) the last date a worker was exposed to asbestos in the workplace, (3) the date a worker knew or should have known that he or she had an asbestos-related injury or disease and (4) the date the defendant received notice of the claim or the lawsuit was filed, whichever occurs first.

The...