Mirta Zorrilla v. Aypco Construction II, LLC and Jose Luis Munoz
469 S.W.3d 143
| Tex. | 2015Background
- Zorrilla contracted Aypco Construction II, LLC, and its owner Munoz for May 2007 construction work on two residences in Edinburg, Texas.
- Disputes centered on whether modifications and additional work were authorized, including a guest house and work at a second property, Plazas del Lago.
- Zorrilla paid most invoices through April 2007 but stopped paying May invoices, claiming work was unauthorized or exceeded the original estimate.
- Aypco/p jury found fraud (defrauded by Zorrilla) and awarded economic damages of $56,654.15 and $250,000 in exemplary damages, plus other relief.
- The trial court and court of appeals upheld most remedies, including liens and prejudgment interest, but the cap on exemplary damages was disputed.
- Zorrilla argued the statutory cap on exemplary damages should apply automatically as a matter of law and not require pleading, while Aypco argued it required pleading as an affirmative defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Section 41.008(b) cap on exemplary damages is an affirmative defense/avoidance | Zorrilla contends cap must be pleaded; it is not automatic. | Aypco maintains cap is not an affirmative defense/avoidance, so pleading is unnecessary. | Cap is not an affirmative defense or avoidance; applies automatically. |
| Whether the exemplary damages cap applies to this case and how | Cap should reduce the $250,000 award to $200,000 or less. | Cap may not apply or may be waived if not pleaded; court should review. | Exemplary damages capped at $200,000. |
| Whether prejudgment interest under the Prompt Payment Act is correct | Interest rate should reflect contract terms or standard rate; 6% argued. | Prompt Payment Act rate (1.5% per month) is appropriate based on evidence of an agreement. | 1.5% per month prejudgment interest affirmed. |
| Validity of liens (statutory and constitutional) foreclosed on the properties | Foreclosure rests on existence of a debt and contract; homestead issues may block liens. | Lien foreclosure supported by evidence of contract and fraud findings; homestead issue not proven. | Foreclosure of liens affirmed; homestead challenge rejected for Plazas del Lago. |
| Whether the fraud verdict and breach-of-contract proofs support exemplary damages | Fraud findings support damages; breach issues underpin remedies. | Evidence insufficient on breach/excuse and contract formation; cap vindicated. | Fraud verdict sustained; but cap on exemplary damages final as to amount. |
Key Cases Cited
- Haase v. Glazner, 62 S.W.3d 795 (Tex. 2001) (fraud damages depend on contract formation; benefit-of-the-bargain not available for unenforceable promises)
- In re Columbia Med. Ctr. of Las Colinas, 306 S.W.3d 246 (Tex. 2010) (exceptional cap-busting conduct; cap applies unless proven otherwise)
- MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132 (Tex. 2014) (Rule 94 pleading requires notice of defenses; discussion of affirmative defenses and avoidances)
- Shoreline, Inc. v. Hisel, 115 S.W.3d 21 (Tex. App.—Corpus Christi 2003) (statutory exemplary damages cap pleaded/waived discussion in later cases)