ACCEPTED
06-14-00064-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
5/13/2015 1:57:22 PM
DEBBIE AUTREY
CLERK
No. 06-14-00064-CV
FILED IN
6th COURT OF APPEALS
TEXARKANA, TEXAS
In The Sixth Court Of Appeals 5/13/2015 1:57:22 PM
Texarkana, Texas DEBBIE AUTREY
Clerk
JOYCE STEEL ERECTION, LTD.,
Appellant
V.
GORDON RAY BONNER,
Appellee
FROM THE 202ND JUDICIAL DISTRICT COURT, BOWIE COUNTY, TEXAS
CAUSE NO. 11C0822-202
HONORABLE LEON F. PESEK JR., PRESIDING
APPELLANT’S REPLY BRIEF
NORTON ROSE FULBRIGHT US LLP NORTON ROSE FULBRIGHT US LLP
J. Jeffery Richardson Rosemarie Kanusky
State Bar No. 16864450 State Bar No. 00790999
jeff.richardson@nortonrosefulbright.com rosemarie.kanusky@nortonrosefulbright.com
2200 Ross Avenue, Suite 3600 300 Convent, Suite 2100
Dallas, Texas 78201 San Antonio, Texas 78205
Telephone: 214.855.8121 Telephone: 210.270.9362
Facsimile: 214.855.8200 Facsimile: 210.270.7205
Counsel for Joyce Steel Erection, Ltd.
Table Of Contents
Table Of Contents .....................................................................................................2
Index Of Authorities .................................................................................................3
Introduction ...............................................................................................................4
Argument...................................................................................................................4
I. The trial court miscalculated the amount of prejudgment
interest. .................................................................................................4
II. The trial court miscalculated the amount of recoverable
damages. ...............................................................................................7
Conclusion ................................................................................................................9
Certificate Of Compliance & Service .....................................................................11
2
Index Of Authorities
Page(s)
Cases
Battaglia v. Alexander,
177 S.W.3d 893 (Tex. 2005) ........................................................................4, 5, 6
Brainard v. Trinity Universal Ins. Co.,
216 S.W.3d 809 (Tex. 2006) ............................................................................5, 6
Galbraith Eng’g Consultants, Inc. v. Pochucha,
290 S.W.3d 863 (Tex. 2009) ................................................................................ 7
Pilgrim’s Pride Corp. v. Cernat,
205 S.W.3d 110 (Tex. App.—Texarkana 2006, pet. denied) ...........................7, 8
Roberts v. Williamson,
111 S.W.3d 113 (Tex. 2003) ............................................................................6, 8
Tow v. Speer,
CIV.A. H-11-3700, 2015 WL 1058080 (S.D. Tex. Mar. 10, 2015) ..................... 6
Statutes
TEX. CIV. PRAC. & REM. CODE (2015)
§ 33.004(i) .............................................................................................................8
§ 33.012.................................................................................................................8
§ 33.012(a) ............................................................................................................7
§ 33.012(b) ............................................................................................................7
§ 33.013.................................................................................................................8
§ 33.013(a) ............................................................................................................8
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Introduction
This appeal involves two issues of de novo review. The first issue questions
whether the “amount of damages to be recovered by the claimant” used in
Section 33.012(a) of the Civil Practice and Remedies Code can be misread, as
Bonner does, as the “amount awarded by the jury.” The second issue questions
whether the trial court failed to follow Supreme Court precedent and apply the
declining principal formula to the calculation of prejudgment interest.
Argument
I. The trial court miscalculated the amount of prejudgment interest.
Bonner concedes that if the declining principal formula applies to the
calculation of prejudgment interest in this case, then “the correct amount of the
judgment would be $1,937,467.32.” Appellee’s Brief at 18. Bonner erroneously
contends, however, that the declining principal formula cannot apply because there
is no separate jury finding making Joyce Crane jointly and severally liable. Id. at 7,
16, 17.
According to Bonner, the declining principal formula is “specifically limited
… to the situation where the non-settling defendant is jointly and severally liable.”
Appellee’s Brief at 17 (emphasis removed, citing Battaglia v. Alexander, 177
S.W.3d 893, 907 (Tex. 2005)). Battaglia says no such thing.
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Under section III of the Battaglia opinion, the Supreme Court found no trial
court error in holding the defendant associations jointly and severally liable based
on the jury’s finding of joint venture. 177 S.W.3d at 904. Under section IV of the
opinion, the Supreme Court held “the timing of settlement payments must be taken
into account.” Id. at 907.
Additionally, “[a] settlement payment should be credited first to accrued
prejudgment interest as of the date the settlement payment was made, then to
‘principal,’ thereby reducing or perhaps eliminating prejudgment interest from that
point in time forward.” Id. at 908 (emphasis added). The Court never limited its
declining principal formula to the joint and several context.
If there was any doubt about whether the Supreme Court’s holding was
limited to cases involving joint and several liability, then the Court removed that
doubt in Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 811 (Tex. 2006),
which involved a single defendant without joint and several liability. The
unanimous Court held that, “to satisfy the purpose of prejudgment interest,
settlements must be credited periodically, according to the date they are received.”
Id. at 816.
Furthermore, the Court held, the settlement credit “is applied first to accrued
prejudgment interest and then to principal.” Id. at 817 (emphasis added). “This
approach, known as the ‘declining principal’ formula, is the proper way to apply
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credits in the calculation of prejudgment interest.” Id. at 816 (emphasis added); see
also Tow v. Speer, CIV.A. H-11-3700, 2015 WL 1058080, *15 (S.D. Tex. Mar. 10,
2015) (likewise applying Battaglia in the absence of joint and several liability).
Bonner’s novel joint and several liability requirement has no basis in the
case law. It also makes no sense in light of what Bonner asked the trial court to do.
Bonner did credit the settlement payments periodically, as required by the first part
of the declining principal formula. But Bonner failed to follow the second half of
the formula by crediting the payments first to accrued prejudgment interest.
7CR3903 (calculation for the initial judgment); 7CR4040 (calculation for the
amended judgment). The trial court made the same fundamental mistake that
should now be corrected. 7CR3934-35; 7CR4042-43.
Bonner’s real complaint seems to be that the settlement payments were made
by parties “that the jury specifically found were not responsible.” Appellee’s Brief
at 18. The Supreme Court, however, has not made any exceptions to its declining
principal formula. See Brainard, 216 S.W.3d at 816; see also Roberts v.
Williamson, 111 S.W.3d 113, 123 n.7 (Tex. 2003) (“[A] defendant may
incidentally benefit from a claimant’s favorable settlement with others.”).
The trial court here did not follow the Supreme Court’s declining principal
formula in its entirety. At a minimum, the judgment must be modified to reflect a
proper calculation.
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II. The trial court miscalculated the amount of recoverable damages.
Bonner contends that the proportionate responsibility statute is “simple.”
Appellee’s Brief at 12. The Supreme Court disagrees. Galbraith Eng’g
Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 868 (Tex. 2009) (describing
chapter 33 of the Civil Practice and Remedies Code as “a complex statutory
scheme”).
Bonner also argues — without citing a single supporting case or even the
pertinent section of the proportionate responsibility statute — that the “jury’s
determination of the amount of damages gives the trial court its starting point for
all subsequent damage calculations and reductions.” Appellee’s Brief at 10.
Bonner then mischaracterizes Joyce Crane’s issue regarding Section 33.012 of the
Civil Practice and Remedies Code as an attempt to create a statutory ambiguity. Id.
at 12.
To the contrary, Section 33.012 is not ambiguous. Pilgrim’s Pride Corp. v.
Cernat, 205 S.W.3d 110, 117-18 (Tex. App.—Texarkana 2006, pet. denied)
(declining to find ambiguity when holding that Section 33.012 “imposes limits on
what a claimant may recover”). Section 33.012 repeatedly refers to the “amount of
damages to be recovered by the claimant.” TEX. CIV. PRAC. & REM. CODE
§ 33.012(a), § 33.012(b). The section does not refer to the “amount of damages
7
found by the jury,” although the legislature could have used that simple phrase if
that had been its intent.
Nor is Joyce Crane trying to create a conflict between Sections 33.012 and
33.013, as Bonner suggests. See Appellee’s Brief at 12; see also Pilgrim’s Pride,
205 S.W.3d at 118 (“Section 33.013 limits the liability of a particular defendant
who is not jointly and severally liable.”). Instead, Section 33.012 should be
construed according to its plain terms.
Section 33.012’s reference to the “amount of damages to be recovered by the
claimant ” should be construed to exclude the amount of damages attributable to
the responsible — but not liable — third party. TEX. CIV. PRAC. & REM. CODE
§ 33.012, § 33.004(i). Doing so results in a take-nothing judgment in Joyce Crane’s
favor.
On other facts not present here (such as different awards or allocation of
responsibility), the limit “on the amount of liability” stated in Section 33.013
would come into play. TEX. CIV. PRAC. & REM. CODE § 33.013. Significantly,
Section 33.013 specifically refers to the “damages found by the trier of fact.” Id.
§ 33.013(a). The legislature’s use of that explicit phrase in Section 33.013 signals
its intent to mean something else in Section 33.012 when it says the “amount of
damages to be recovered by the claimant.” See Roberts, 111 S.W.3d at 123
8
(“[D]amages under these two sections are the same only when the claimant has not
settled and shares no responsibility.”).
The judgment should be reversed because properly applying the
proportionate responsibility statute and pertinent settlement credits yields a take-
nothing judgment in favor of Joyce Crane.
Conclusion
For all the foregoing reasons and those stated in its opening brief, Joyce
Crane requests a take-nothing judgment in its favor and release of its surety, or
alternatively, reformation of the judgment to reflect the proper calculation of
prejudgment interest (which reduces the judgment to $1,937,467.32). Joyce Crane
prays for all other relief to which it may be entitled.
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Respectfully submitted,
NORTON ROSE FULBRIGHT US LLP
By: /s/ Rosemarie Kanusky
State Bar No. 00790999
rosemarie.kanusky@nortonrosefulbright.com
300 Convent, Suite 2100
San Antonio, Texas 78205
Telephone: 210.224.5575
Telecopier: 210.270.7205
and
NORTON ROSE FULBRIGHT US LLP
J. Jeffery Richardson
Jeff.Richardson@Nortonrosefulbright.com
2200 Ross Avenue, Suite 3600
Dallas, Texas 78201
Telephone: 214.855.8121
Facsimile: 214.855.8200
Counsel for Appellant,
Joyce Steel Election, Ltd.
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Certificate Of Compliance & Service
I certify that this brief complies with type-face and type-volume
requirements. The document contains 1,485 words excluding the table of contents
and index of authorities.
I certify that a copy of this brief was emailed to the following:
Robert L. Clements John R. Mercy
Robert@clementslaw.com jmercy@texarkanalawyers.com
Kelly R. Clements MERCY CARTER TIDWELL, L.L.P
Kelly@clementslaw.com 1724 Galleria Oaks Drive
CLEMENTS & CLEMENTS Texarkana, Texas 75503
731 N. St. Paulus Ave. Counsel for Appellee,
Dallas, Texas 78214 Gordon Ray Bonner
Counsel for Appellee,
Gordon Ray Bonner
Paul A. Bezney Brent L. Watkins
paul@ahblaw.net bwatkins@skeltonslusher.com
J. Kevin Kindred Skelton Slusher Barnhill
kevin@ahblaw.net Watkins Wells, PLLC
Adkerson, Hauder & Bezney, P.C.. 1616 South Chestnut
1700 Pacific Avenue, Ste. 4450 Lufkin, Texas 75901
Dallas, Texas 75201 Counsel for Intervenor,
Counsel for Appellant, American Interstate Insurance
Joyce Steel Election, Ltd. Company
/s/ Rosemarie Kanusky
May 13, 2015
41669667
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