U–Haul Int'l, Inc. v. Waldrip
| Decision Date | 31 August 2012 |
| Docket Number | No. 10–0781.,10–0781. |
| Citation | 380 S.W.3d 118,55 Tex. Sup. Ct. J. 1345 |
| Parties | U–HAUL INTERNATIONAL, INC. d/b/a U–Haul, U–Haul Co. of Texas, Inc. d/b/a U–Haul of Dallas, and East Fork Enterprises, Inc. d/b/a Jot 'Em Down, Inc., Petitioners, v. Talmadge WALDRIP, Bernice Waldrip, Dinah Simington, and Anne Waldrip–Boyd, Respondents. |
| Court | Texas Supreme Court |
OPINION TEXT STARTS HERE
George S. Christian, Austin, TX, for Amicus Curiae Texas Civil Justice League.
Christopher J. Pruitt, Brown Pruitt Peterson & Wambsganss PC, Fort Worth, TX, for Other interested party Boyd, Larry.
Dryden Liddle, San Rafael, CA, for Other interested party LawFinance Group, Inc.
David N. Kitner, Strasburger & Price, L.L.P., Dallas, TX, Creighton R. Magid, Dorsey & Whitney LLP, Washington, DC, for Other interested party U-Haul Co. of Arizona.
Christopher J. Pruitt, Brown Pruitt Peterson & Wambsganss PC, David E. Keltner, Kelly Hart & Hallman LLP, James Estes Griffis, Brown Pruitt Peterson & Wambsganss, Fort Worth, TX, Creighton R. Magid, Dorsey & Whitney LLP, Washington, DC, David N. Kitner, Strasburger & Price, L.L.P., Thomas S. Leatherbury, Vinson & Elkins LLP, Dallas, TX, Lisa Bowlin Hobbs, Kuhn Hobbs PLLC, Matthew Ploeger, Vinson & Elkins L.L.P., Austin, TX, for Petitioners U–Haul International, Inc.
Charles E. Schuerenberg, Schuerenberg & Grimes, Ted B. Lyon, Jr., Marquette William Wolf, Ted Lyon & Associates, P.C., Mesquite, TX, Charles W. McGarry, Law Office of Charles McGarry, Jeffrey S. Levinger, Levinger PC, Joseph Carl Cecere, Hankinson LLP, Dallas, TX, for Respondents Waldrip, Talmadge.
After being seriously injured in an accident by a U–Haul truck, Talmadge Waldrip 1 sued several U–Haul corporate entities and an independent dealer on theories of negligence and gross negligence, alleging that the accident was the result of a systematic pattern of poor inspection and repair practices, and incompetence.
Following a three-week trial, a jury found U–Haul International, Incorporated d/b/a U–Haul (UHI) and U–Haul Company of Texas, Incorporated d/b/a U–Haul Company of Dallas (UHT) both negligent and grossly negligent and East Fork Enterprises, Incorporated d/b/a Jot judgment in part and affirm in part and remand the case for a new trial on the negligence claims against the defendants.
Talmadge Waldrip was severely injured while exiting a U–Haul truck that rolled backwards onto him, allegedly due to problems with the truck's parking brake and transmission. U–Haul argues that its maintenance and safety procedures were adequate and the problems with the truck were not the result of faulty inspection or maintenance. Waldrip contends that U–Haul's failure to discover the problems with the truck's parking brake and transmission systems was due to negligence and gross negligence in its inspection and maintenance program.
The truck at issue in this case, identified as JH6097T, was a standard transmission jumbo hauler. The vehicle could roll backwards when idle unless the transmission was in gear or the parking brake was applied, or both. Waldrip testified that the truck rolled, despite his putting it in first gear and applying the parking brake. The jury found for Waldrip on all grounds and awarded actual damages of $21,425,000, of which it apportioned 50 percent to UHI, 49 percent to UHT, and 1 percent to JED. The jury also found UHI and UHT grossly negligent and awarded punitive damages of $42 million against UHI and $21 million against UHT. The plaintiffs did not submit a question on the gross negligence of JED in their proposed jury charge. After applying the statutory cap on punitive damages, the trial court entered judgment against UHI and UHT, ordering each to pay $11,760,000 in punitive damages as well as its share of the actual damages award. The court of appeals overturned the exemplary damages award against UHI, but otherwise affirmed the trial court's judgment, including actual damages. U–Haul filed a petition for review in this Court. 3
UHI is an equipment rental company based in Phoenix, Arizona with 49 subsidiaries operating in the United States and Canada. These subsidiaries, including UHT, operate U–Haul-owned rental centers, as well as oversee the operations of independent dealers, including JED, that rent U–Haul equipment. Of the more than 15,000 U–Haul rental locations across the United States and Canada, 14,000 of those locations are independent dealers. At the time of trial, U–Haul's fleet comprised more than 100,000 trucks.
As U–Haul's vehicle-inspection and maintenance policies for the fleet's parking brakes and transmissions are at issue, we will briefly review them. UHI is responsible for developing and maintaining the company's policies for inspecting, repairing, and maintaining the vehicles. UHT is responsible for enforcing and implementing UHI's policies in Texas. UHI has promulgated maintenance and repair policies relevant to this case. First, the preventive maintenance (PM–5) inspection is scheduled for every 5,000 miles and includes a functional and visual parking brake inspection, an inspection of the transmission-fluid level, a check for signs of leakage, and a test drive of the truck by another person to include a check of the parking brake. A PM–5 inspection is performed by a trained mechanic.4
Also relevant to this case is the vehicle-safety certification required by UHI in addition to the PM–5. UHI requires that all trucks undergo a safety certification at specified chronological intervals. The required frequency of these certifications is in dispute.5 Safety certifications include a functional and visual parking brake test.6 Area Field Managers (AFMs) were employed by UHT and other UHI subsidiaries and charged with performing safety inspections on the trucks at independent dealers. The record indicates that AFMs are not mechanics and perform operational functions distinct from U–Haul's mechanics.
A third relevant UHI policy is the receipt and dispatch tag program (R & D tag). With every rental, U–Haul records customer feedback on the truck's performance using the R & D tag to collect information. When a customer returns a truck to either an independent dealer or company-owned location, U–Haul agents 7 are required to ask the customer about any problems with the truck, including brake, engine, or electrical problems, and the agent records this information on the R & D tag, which is a UHI form. The agent must sign the tag to certify that the truck is ready for rental.8
UHI also requires an annual inspection per the United States Department of Transportation (DOT) guidelines. The parties dispute, however, whether federal law requires U–Haul to conduct this inspection.9 If any safety issues are discovered during an inspection or the R & D-tag process that cannot be repaired on-site, U–Haul policy requires that the truck be grounded and the information entered into the company computer system in the Downed Equipment Tracker (DET) database until the repairs are completed. UHI maintained this computer database for all of the trucks in U–Haul's fleet.
Talmadge Waldrip was injured in September 2006 when the parking brake or the transmission on the truck his daughter rented malfunctioned and the truck rolled over him as he attempted to exit it. At the time of the accident, JH6097T was an eighteen-year-old U–Haul jumbo hauler with a manual transmission and an odometer reading of more than 233,000 miles. At the time of the accident, JH6097T had an inoperable parking brake and a damaged transmission. The parties disagree on the extent and cause of these conditions, and whether they caused the accident.
In the years before Waldrip's accident, JH6097T had been driven throughout North America. When the accident happened, the truck was on its third transmission. The rear transmission seal had been replaced three times since 2001. The entireparking brake system had been replaced as well, but evidence presented by Waldrip at trial indicated that parking brake problems persisted.
In September 2005, a year before Waldrip's accident, the truck was grounded and placed in the DET database after a customer reported that the parking brake light stayed on and the truck had “no parking brake,” according to language entered in the database. The parties dispute exactly what “no parking brake” means. U–Haul contends that the notation “no parking brake” meant only that the indicator light was not working, a conclusion it argues is buttressed by the truck passing subsequent parking-brake inspections. Waldrip asserts that “no parking brake” meant that the parking brake itself was not functioning. U–Haul did not perform repairs on the parking brake at that time. James Anderson, the U–Haul employee who repaired the parking-brake light, testified that he inspected the parking brake and found it to be functioning.
While in Dallas prior to the accident, the truck passed safety certifications three times—in November 2005, January 2006, and March 2006. The November 2005...
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