Holland v. Lovelace
352 S.W.3d 777
Tex. App.2011Background
- PCC was an Oklahoma workers' compensation insurer regulated by the OID; the Officers controlled PCC and PGA.
- OID found PCC impaired in 2001 and supervised it; eventual receivership and liquidation occurred on March 14, 2002.
- A 2004 suit was filed by then-Insurance Commissioner Fisher against the Officers, MHM, and others for damages related to PCC's insolvency; Holland later replaced Fisher as plaintiff.
- A five-week jury trial concluded the Officers breached fiduciary duties; MHM allegedly participated negligently; ERISA-related damages were disputed.
- The jury awarded Holland $5M past and $5M future damages, but the trial court reduced to $30,000 after applying proportionate credits and ERISA adjustments.
- On appeal, Holland challenges jury misconduct, RPP designations, peremptory challenges, damages sufficiency, and ERISA preemption; the Officers appeal on limitations and discovery-rule issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jury misconduct denial of new trial | Holland argues misconduct biased the verdict. | Defendants argue no probable injury; trial court acted within discretion. | No reversible error; denial affirmed |
| Designation of OID as responsible third party | OID negligent; should be designated for fault. | OID immunity/preclusion; no basis for designation. | Remains unresolved on remand; issue resolved in favor of Holland for other issues |
| Peremptory challenges | Antagonism existed; distribution improper. | Antagonism shown; no abuse of discretion. | Trial court did not err; Holland's challenge rejected |
| Damages manifestly too small; evidentiary support | Verdict lacked rational basis; evidence supported higher damages. | Jury within discretion; damages supported by expert testimony. | Reversed and remanded for new trial on Officers |
| ERISA preemption and damages | ERISA damages not properly precluded; standing issues addressed. | ERISA preemption should reduce damages by $4.2M. | ERISA damages improperly subtracted; issue resolved in plaintiff's favor |
Key Cases Cited
- Golden Eagle Archery, Inc. v. Jackson, 24 S.W.3d 362 (Tex. 2000) (misconduct inquiry requires injury-in-fact; burden on movant)
- Pharo v. Chambers Cnty., 922 S.W.2d 945 (Tex. 1996) (probable injury standard for jury misconduct; injury is required)
- Sharpless v. Sim, 209 S.W.3d 825 (Tex.App.-Dallas 2006) (no presumed harm from admonitory instruction violations)
- Keilman v. Maybank, 851 S.W.2d 914 (Tex.App.-Dallas 1993) (damages must have rational basis; cannot be pulled from hat)
- Fleet v. Fleet, 711 S.W.2d 1 (Tex.1986) (separate inquiry for specific acts of breach proper)
- Parallax Corp. v. City of El Paso, 910 S.W.2d 86 (Tex.App.-El Paso 1995) (jury may depart from expert valuations with other trial evidence)