Wal-Mart Stores, Inc. v. Alexander

• Decision Date: 08 December 1993
• Docket Number: No. D-2388,WAL-MART,D-2388
• Citation: 868 S.W.2d 322
• Parties: STORES, INC., Individually and Wal-Mart Stores, Inc. D/B/A Sam's Wholesale Club, Petitioners, v. Sarah ALEXANDER and Sam Alexander, Respondents.
• Court: Texas Supreme Court

Page 322

868 S.W.2d 322

WAL-MART STORES, INC., Individually and Wal-Mart Stores Inc. D/B/A Sam's Wholesale Club, Petitioners, v. Sarah ALEXANDER and Sam Alexander, Respondents.

No. D-2388.

Supreme Court of Texas.

Dec. 8, 1993.

Rehearing Overruled Feb. 2, 1994.

J. Preston Wrotenbery, Houston, Kelly M. Crawford, David R. McAtee, Dallas, for petitioners.

Jeffrey L. Jackson, San Benito, Melchor, Chavez, Brownsville, for respondents.

PHILLIPS, Chief Justice, delivered the opinion of the Court, in which Justices GONZALEZ, HIGHTOWER, HECHT, CORNYN, and ENOCH join.

Sarah Alexander was injured when she fell in front of Wal-Mart's store. The primary issues are whether Wal-Mart had a duty to maintain the area where Mrs. Alexander fell, and, if so, whether there is any evidence that Wal-Mart was grossly negligent. We conclude that although Wal-Mart did have a duty to maintain the area, there is no evidence that its failure to do so constituted gross negligence. We therefore affirm the court of appeals' judgment as to actual damages and reverse as to punitive damages. 827 S.W.2d 420.

I

On January 21, 1989, Sarah Alexander, then 77 years old, fell and broke her hip after tripping over a 5/8"' ridge at the base of a concrete ramp leading from the parking lot to the sidewalk in front of the Sam's Wholesale Club in Brownsville. The Sam's store was owned by Wal-Mart Stores, Inc. ("Wal-Mart"), but Wal-Mart leased the building from Roy L. Martin & Associates ("Martin"). The leased premises included only the area inside the exterior walls, and thus did not include the sidewalk or the ramp area.

The ramp did not exist when the lease was executed. Wal-Mart subsequently built the ramp on its own initiative and at its own expense, apparently for shopping carts. Although the base of the ramp was apparently flush with the parking lot when the ramp was completed, the parking lot subsequently settled after Martin repaved it. The resulting ridge existed by the time the store opened in October 1988.

It is undisputed that Wal-Mart's management knew about the ridge well before Mrs. Alexander's accident. Willie Enriquez, the store's sales manager, stumbled over the ridge in November 1988. Although he apparently did not fall or injure himself, he did scuff his shoes. Enriquez, who considered the ridge a serious safety hazard, informed Robert Guerra, the store's general manager, about the problem. Guerra acknowledged that the ridge had on occasion caused bottles to be jostled from shopping carts, but he did not consider it a safety hazard prior to Mrs. Alexander's accident because no one had ever fallen. Enriquez also testified that he informed Wal-Mart district management in Houston about the ridge in late December 1988 or early January 1989. Wal-Mart repaired the ridge in February 1989, after Mrs. Alexander's accident, at an estimated cost of $400.00.

Mrs. Alexander sued Wal-Mart and Martin for actual and punitive damages, and her husband brought claims for loss of consortium and loss of household services. The Alexanders settled their claims against Martin prior to trial for $60,000. Against Wal-Mart, the jury awarded Mrs. Alexander $285,000 in actual damages and $400,000 in punitive damages, and Mr. Alexander $105,000 in actual damages. The trial court reduced Mrs. Alexander's actual damage award by $100,000, after concluding that the jury had awarded this amount for loss of consortium, to which she was not entitled. The trial court otherwise rendered judgment on the jury's verdict, after offsetting the amount of Martin's settlement. The court of appeals affirmed.

II

Wal-Mart first argues that it owed no duty to Mrs. Alexander concerning the dangerous condition created by the ridge. While acknowledging the general rule that an occupier of premises owes a duty to use ordinary care to keep the premises in a reasonably safe condition for invitees, see J. Weingarten, Inc. v. Razey, 426 S.W.2d 538, 539 (Tex.1968), Wal-Mart contends that it was not the occupier of the area where Mrs. Alexander was injured. Wal-Mart leased from Martin only the area from the exterior walls of its store inward; Martin retained possession of the parking lot, sidewalks, and other common areas. The lease between Wal-Mart and Martin provided as follows:

"The maintenance by Lessor is to include, without limitation, the following: (a) Maintaining the surfaces of all sidewalks, paved and parking areas in a smooth and evenly-covered condition...."

Since Martin retained possession of the area where Mrs. Alexander fell, and under the lease had an express duty to maintain that area, Wal-Mart contends that it owed no duty.

Wal-Mart's argument is without merit. On its own initiative and at its own expense, Wal-Mart built the ramp after leasing the premises. By so doing, it assumed actual control of the ramp area. A lessee is responsible for those areas adjacent to the demised premises which it actually controls. See Atchison, Topeka and Santa Fe Ry. v. Smith, 563 S.W.2d 660, 665-66 (Tex.Civ.App.--Waco 1978, writ ref'd n.r.e.); Howe v. Kroger Co., 598 S.W.2d 929, 930 (Tex.Civ.App.--Dallas 1980, no writ) ("[T]he phrase 'occupier of premises,' as interpreted by Texas courts, means the party in control of premises."). See also Restatement (Second) of Torts § 328E (1965) (possessor of land includes a person "in occupation of land with intent to control it" regardless of whether the occupation is rightful between the possessor and some third person).

Wal-Mart relies on Johnson v. Tom Thumb Stores, Inc., 771 S.W.2d 582 (Tex.App.--Dallas 1989, writ denied), and Howe v. Kroger Co., supra, to support its argument. These cases are not on point, however, as they merely hold that a lessee has no responsibility for premises defects in common areas that the lessee does not control. 771 S.W.2d at 584-85; 598 S.W.2d at 931. While conceding that it built the ramp where Ms. Alexander fell, Wal-Mart argues that it was not responsible for creating the ridge between the ramp and the parking lot which actually caused the fall. Wal-Mart offered evidence that no ridge existed when it completed the ramp. Rather, it contends, the uncontradicted proof established that the ridge formed only after Martin repaved the lot and the new pavement settled from automobile traffic. Our holding, however, is premised not on a factual determination that Wal-Mart created the hazard, but rather on a legal conclusion that it had a duty of reasonable care to maintain the safety of the ramp once it built and exercised control over it.

Wal-Mart argues that the lease expressly imposed a duty on Martin to maintain the parking lot and sidewalks, and that Wal-Mart's installation of the ramp did not relieve Martin of this duty. As Martin is not a party to this appeal, it is unnecessary for us to determine what duty it owed to Mrs. Alexander. Even if Martin did owe a duty of care as the lessor, however, Wal-Mart's duty based on its actual control of the ramp area would remain.

III

A

Wal-Mart next argues that there is no evidence to support the jury's finding of gross negligence. The common-law definition of gross negligence is set forth in Burk Royalty Co. v. Walls, 616 S.W.2d 911, 920 (Tex.1981):

Gross negligence, to be the ground for exemplary damages, should be that entire want of care which would raise the belief that the act or omission complained of was the result of a conscious indifference to the right or welfare of the person or persons to be affected by it.

Without objection from either party as to the form of the definition, the trial court defined gross negligence for the jury in accordance with Burk Royalty. ¹ This definition, which is unique to Texas, combines the two recognized tests for gross negligence in American jurisprudence: "entire want of care" and "conscious indifference." See Williams v. Steves Industries, Inc., 699 S.W.2d 570, 572-73 (Tex.1985); John Roberson, Comment, Exemplary Damages for Gross Negligence: a Definitional Analysis, 33 Baylor L.Rev. 619, 622 (1981). The "entire want of care" test focuses on the objective nature of defendant's conduct, distinguishing gross negligence as being different in degree or quantity from ordinary negligence. Williams, 699 S.W.2d at 572; Roberson, supra at 622. The "conscious indifference" test focuses on the defendant's mental state, and thus "stresses a qualitative distinction from ordinary negligence." Roberson, supra at 622. ² Under this approach, the actor, although not actually intending to cause harm, must have proceeded with knowledge that harm was a "highly probable" consequence. See Prosser and Keeton on the Law of Torts, § 34, at 213 (5th ed. 1984).

In Burk Royalty, the Court emphasized the conscious indifference component, observing as follows:

What lifts ordinary negligence into gross negligence is the mental attitude of the defendant; that is what justifies the penal nature of the imposition of exemplary damages. The plaintiff must show that the defendant was consciously, i.e., knowingly, indifferent to his rights, welfare, and safety. In other words, the plaintiff must show that the defendant knew about the peril, but his acts or omissions demonstrated that he didn't care.

616 S.W.2d at 922. Because of this requirement of conscious indifference, gross negligence can never be the result of "momentary thoughtlessness, inadvertence, or error of judgment." Id. at 920. The Court noted, however, that this mental component may be proved indirectly through a defendant's conduct. Id. at 922.

After Burk Royalty, we continued to emphasize the conscious indifference component of the gross negligence definition. See, e.g., International Armament Corp. v. King, 686 S.W.2d 595, 597 (Tex.1985); Trenholm v. Ratcliff, 646 S.W.2d 927, 933 (Tex.1983); Neely v. Community Properties, Inc., 639 S.W.2d 452 (Tex.1982). In Williams v. Steves Industries, Inc., 699 S.W.2d 570 (Tex.1985), however, we made clear that the test for gross negligence...