Ellis County State Bank v. Keever

Carillo, Corp. 848 S.W.2d 83 Fruehauf merely clarified that trial vacate, “ungrant,”

court could the new grant

trial plenary power period. within the evidentiary facts there were

grounds raised in Porter’s motion new

trial, only Judge and that had heard Vick ease, Judge do not make granting

Purcell’s order void. new trial 18; Texaco,

See see Tex.R.Civ.P. also Inc. v. (Tex. Co., 768,

Pennzoil 846-47

App. [1st Dist.] writ refd — Houston cert, dism’d, n.r.e.), U.S. S.Ct. (1988). Further, 99 L.Ed.2d 686 while justify

official misinformation

setting judgment appeal, aside on ipso make the order facto relating to or affected the misinformation Rosser,

void. See Hanks (Tex.1964). hearing Without oral ar

gument, majority grants leave conditionally to file and issues the writ of Tex.R.App.P.

mandamus. 122. BANK, Tracy

ELLIS STATE COUNTY Hastings, Jr., A. John Harris, Petitioners,

Don KEEVER, Respondent.

Glenn

No. D-3413.

Supreme Court of Texas.

Argued Sept. 1993. June

Decided

Rehearing Sept. Overruled underlying a the evidence

the of judgment. trial court and out of the indictment This suit arises February In Keever. arrest Glenn $6,000 90-day note for a Keever executed Milford, by secured First State Bank with Shortly equipment. office interest in his an date, Chapter for Keever filed before due bankruptcy protection. June purchased Harris all of assets Don note, Bank, including Keever’s First State County the Ellis State renamed the bank and Bank. ensuing hotly dispute the parties

The Tracy that when events. Keever testified to president, first called vice bank note, repayment of the Keever discuss proceeding bankruptcy informed her of attorney’s name provided his and and contin- ease number. Fletcher nevertheless telephone and to Keever about note ued Dallas, Cooper, petitioners. Brent R. for asserting a de- registered him a letter sent Wood, Dallas, respondent. Robert E. for making payment formal for fault and demand collateral. Keever in full return GONZALEZ, Justice, delivered the telephoned to in- that he Fletcher testified opinion of the court which members meeting her scheduled form of a creditors’ join in I and the Court sections II. meeting, the 1987. At that for October turn bankruptcy instructed Keever to court HIGHTOWER, DOGGETT, GAMMAGE According to the to the collateral Bank. over SPECTOR, JJ., join in III and and sections Keever, to Fletcher failed November 1987 IV. up the appointment pick to collater- keep an C.J., HECHT, PHILLIPS, and CORNYN John A. Has- al. In the summer ENOCH, JJ., join in sections V VI. Jr., attorney made tings, for an rehearing for motions overruled. through bankruptcy arrangements Keever’s opinions previously issued collateral; again, collect following in this case are and the withdrawn keep appointment. failed Bank place. are substituted their ver- significantly different The Bank has which, failing after prosecution, In this of the events action malicious sion ordinary respond past to number of due notices burden of determine that finally agreed to telephone messages, Keever by preponderance the evidence remains note, payment sign a new more make a appropriate rather than the extraordi- Fletcher made a formal nary convincing of clear and evi- later refused. then burden August, dence; for the plaintiff is not enti- demand collateral we hold written until not advised Keever tled filing in bankruptcy to the of the earlier damages, and we remand this cause October at- Following unsuccessful they May. several with instructions that collateral, Hastings punitive damage points tempts to retrieve Bank’s reconsider the grand sought appointment light the standards we articulated Moriel, an indictment Keever Ins. 879 to seek Transportation Co. making (Tex.1994). After hindering a creditor. further de- secured We at- appointment, Hastings continued to this obligate courts cline bankruptcy affirming tempt negotiate with Keever’s when supportive detail attorney regarding prove prose- the collateral. Mean- must the elements of malicious while, Keever relocated the collateral vio- preponderance cution agreement security lation of the without convincing rather than clear and evidence. notifying bringing mat- Bank. While writing This contention conflicts with our grand County ter to the attention the Ellis firmly “[n]o doctrine more established jury 1987, in December the Bank until waited that fact than issues of are resolved from a pursue November 1988 to an indictment preponderance of the evidence.” Sanders v. against hindering Keever for a credi- secured Harder, 593, 206, 148 Tex. 209 upon testimony tor.1 Based of Fletcher (1950) title). (trespass try a century Over Hastings, and Keever was indicted on No- ago rejected this Court view 29, 1988.2 Keever vember turned himself police into December 2. Arrested and by facts established [must] be evidence bail,3 pled until incarcerated he made Keever certainty with absolute ... that ex- guilty, eventually and had his indictment all their cludes reasonable doubt of exis- quashed by Declining the district court. tence, if a as it were case of murder or reindictment, seek the district indi- treason, not a applicable [this] is rule cated that she had not learned of the bank- this civil other cause. ruptcy arraignment, contradicting until the Hastings they claims of Fletcher and (1877) Dawson, 138, Sparks v. 47 Tex. 145 grand jury filing. had informed the of this (fraudulent conveyance). Seeking to avoid a subsequent prosecution his malicious blurring of the distinction civil and between Fletcher, against Harris, Hastings, action cases, regularly criminal have found we re- Bank, and the Keever testified as a a versible error when trial court instructed a result suf- indictment arrest he jury greater that a met. burden must be See post-traumatic fered from stress disorder Deewes, 29, v. Bluntzer Tex. 15 S.W. verdict, jury depression. on a Based (reversible charge requir- error in judgment trial court for Keever rendered ing preponderance “a ... the evidence defendants, against all and awarded Keever certainty satisfy your as will punitive damages, pre- actual and as as well minds”); Wylie Posey, 71 Tex. S.W. judgment interest.4 The court of (1888) (reversible charge error as reversed requiring preponderance “a sufficient of the punitive damages, but other- evidence, to the extent of a cer- reasonable wise affirmed. 870 S.W.2d tainty”). Only extraordinary circum-

I. Prosecution— Malicious stances, such as when we have been mandat-

Burden Proof burden, impose ed a onerous more pre- Court abandoned the well established The defendants contend the trial instructing plaintiff ponderance erred in of the evidence standard.5 litigation, applied preponderance civil we Code 1. TexPenal standard: grand jury 2. An initial indictment on November jurisdictions make a Some courts in other dis- typographi- dismissed because of a clear tinction between standard of cal error. convincing and the civil usual stan- evidence; preponderance dard of the process 3. This took less than an hour and in- however, Texas Courts review evidence arrested, formally being finger Keever volved legal two standards: factual booked, printed, led handcuffed and chained sufficiency. requirement of clear and con- lawn, across the courthouse and incarcerated. vincing merely method evidence is another requiring supported that a cause of action be $110,600 damages, In addition actual by factually sufficient evidence. $1,000,- imposed punitive damages Turner, (Tex. 1977). trial court State $25,000 against against 000 $260,000 Concerned that an "individual’s interest $250,000 against Hastings, and proceeding of a civil outcome commitment process Harris. weight gravity that due re such quires justify proof the state to confinement example regard principal preponderance 5. A to civil is with more substantial than mere evidence," which, Supreme proceedings in other commitment as in United States explained the Only recently again we mean- prosecution is no different. Malicious upon by relying ing admonitions of such to the im Though has been made reference explain that a Sanders satisfactory” portance “positive, clear and satisfactory” proof represents “clear and from proof6, “issues of fact are resolved great Andrews v. caution in preponderance the evidence.” exercise admonition to (Tex.Civ. sup- Dewberry, weighing the evidence n.r.e.) (ap App. plant writ d usual Worth ref standard — Fort pre preponderance evidence. regarding instruction proving a ponderance of standard the evidence Cahill, 643, 645 n. 2 Rhodes action). Texas is cer (Tex.1990) (adverse possession). tainly regard; we have not not alone regard to the standard What said with jurisdiction aware of other been made cases in prosecution of review for malicious required an enhanced burden has (Tex. 509, Green, 510 v. 524 S.W.2d Meadows proof prosecution in a malicious action. 1975) curiam), applicable also the (per is trial court: explained This occasional convincing of clear and requirement by suggestion that must be established facts of stat- merely is another method evidence “but an convincing “clear and evidence” as ing sup- action must be that a cause of judge great to the to exercise admonition ported by factually sufficient evidence. Sanders, weighing caution in the evidence.” in Carl v. 227 209. As noted S.W.2d Here, charged judge correctly the trial (Tex.Com. 238, Settegast, 237 S.W. jury apply the traditional burden originate App.1922), type admonitions of by That bur- preponderance of the evidence. early usage with reference to from their merely change because trial den does chancery: courts of judges admonished to set the verdict judge trial if the aside and order a new merely in so far as these rules address “positive, is not persuaded that the evidence to the conscience of the chan- themselves satisfactory.” clear and province pass exercising cellor in his reject Nor our state’s well estab- upon weight facts or need we they place jurisprudence lished in order to assure rea- jurisprudence, have no our report jury given protection to citizens who under which ... a trial is as a sonable activity right, province prosecuting authorities. matter of and the criminal by demanding goal to This can be satisfied where evidence is sufficient the issues to them is abso- full satisfaction elements have submitted facts, subject as that determining prosecution lute tort such probable to initiate trial court and Court of lacked review defendant See, prosecution and acted with malice. Appeals. Civil Bogart gift. Addington presumption of v. See commanded us do otherwise. v. rebut Somer, 1804, 1810, curiam). 418, 427, Texas, (per 762 S.W.2d 577 441 U.S. 99 S.Ct. 60 (1979). remand, adopted On L.Ed.2d 323 Ortiz, Corp. convincing v. 753 S.W.2d Shamrock "clear and evidence” standard in Diamond 1988, 238, (Tex.App. Corpus writ Addington, 241 Christi See State v. 588 S.W.2d cases. — Indus., G.M., 569, denied); (Tex. 1979); Browning-Ferris also Inc. v. see In the Interest 596 570 926, Lieck, 846, 1980) (Tex.App. Corpus (Tex. (relying Adding 845 S.W.2d 935 847 S.W.2d — 1992, ("clear ton, granted) establishing convincing writ and convinc clear Christi Medina, Stores, involuntary ing”); Inc. 814 applies to the ter Wal-Mart evidence standard 1991, 71, (Tex.App. Corpus parental rights); 73 Christi also Brown v. mination of See — denied) Co., 220, (Tex. (same); Dillaberry, Ada Oil 223 writ Co. 764 S.W.2d Edwards Transfer 902, (Tex.Civ.App. 1988) (“[flor consistency,” applying legislative 440 S.W.2d — Houston dism'd) 1969, ("positive, clear Family [14th Dist.] Codes writ in the and Probate commands satisfactory”); Montgomery Ward & Co. v. paternity must be clear con established 906, Kirkland, (Tex.Civ.App.— wrongful 225 S.W.2d vincing claim evidence to a under n.r.e.) (same). 1949, statute). writ ref'd Apparently other such San Antonio death cases, however, required any approval these Court’s without None of circumstance regarding writing change instruction burden of a discussion of court proof. convincing required to evidence is clear Calabria, e.g., Compton 945, Co., 629, Pool v. Ford Motor 715 S.W.2d writ) (Tex.App. 1991, (Tex.1986). see also urge defendants here — Dallas Shamrock, Diamond 753 S.W.2d at 241. we extend this to cases in which One accused of malicious appeals upholds court of the trial court rightly aided presumption “an initial judgment. appellate While an reasonably a defendant good acted and in outlining sometimes find such an support- faith and therefore had useful, cause.” ive evidence to be we decline to man- Dahl, 917, Akin v. 661 S.W.2d Requiring date this. detailing of all evi- denied, cert. 466 U.S. 104 S.Ct. supporting 80 dence is not consis- L.Ed.2d 460 Protection is also af perceive tent with justifi- Pool. We no other forded to one who makes a full and fair imposing cation for this additional burden on prosecuting attorney. disclosure to the See appeals. the court of Indus., Zavaleta, Browning-Ferris Inc. v. III. No Evidence 827 S.W.2d (Tex.App. Corpus — denied); Christi writ Thomas v. Cisne clearly presenting Rather than ros, 317 (Tex.Civ.App briefing point a no concerning their . —Aus n.r.e.); tin writ refd Ada Oil Co. v. liability, lumped gen the defendants have (Tex.Civ. Dillaberry, eralized of the evidence conten App. 1969, [14th Dist.] writ together tion argument with their for the — Houston dism’d). Pool n view these alternative safe extension of detailing of the evidence guards honestly good those who and in requirement. construction,7 With liberal we report faith activity, criminal we believe the argument believe this can be construed as properly trial court following acted the law urging Harris, no evidence that individually, concerning applicable the standard of gave either participated any or decision to changing rather than it. give testimony incomplete false or make an grand jury. disclosure to In reviewing the Appeals Detailing II. Court of point, “no evidence” this court “must consid Supportive Evidence— er tending evidence and inferences Damages Actual support jury’s finding, viewed most favorably support finding, of the and disre discourage To a “court of gard contrary evidence and inferences.” merely substitut[ing] [from] Stores, Inc., E-Z Hamer v. Mart 825 S.W.2d jury,” require every that of the opin we (Tex.1992); $11,011.00, 458 State v. involving ion judg reversal of a trial court curiam); (per S.W.2d 783 Garza v. insufficiency grounds ment on factual must Alviar, (Tex.1965). Ap S.W.2d detail the evidence relevant to the issue in plying here, stringent agree standard we clearly why consideration and state there is no support evidence to jury’s finding factually is insufficient or is finding against individually. Harris so great weight and preponder manifestly unjust; ance as to why complaint joint- The more urged indefinite conscience; clearly defendants, shocks the or ly by demon remaining Further, courts, strates bias. Hastings, those and the relates to a claim their opinions, regard should state in what that Keever failed to establish one element of contrary greatly outweighs evidence probable lack of —a support the evidence in proceedings.8 of the verdict. cause to initiate This element Pool, 633, (quoting Holley They argue 7. See probable 715 S.W.2d at v. 8. also cause was estab- Watts, (Tex.1982)): 629 S.W.2d statutory lished as a matter of law virtue of a presumption: practice liberally It is our construe the section, points just, purposes person pre- of error in order to obtain a fair For of this is equitable adjudication rights of the of the sumed to have intended to hinder enforcement litigants.... if, wording security part We look not at interest or lien when error, points argument security but to the of the debt secured interest or due, point under each to determine as best we can lien was he failed: due; party. the intent of the pay then prosecution cases.” in malicious by proof that the de review may be demonstrated (Hecht, J., concurring and misrepresentations to at material fendant made S.W.2d Compton, 811 prosecuting approach apparently officer. See dissenting). This Beach, 950; at Fisher by any com- S.W.2d never been discussed writ); (Tex.App. no Terk history jurispru- of Texas mentator — Dallas (Tex.Civ. Deaton, 154, 155 dence, implied urged even as nor was it Andrews, writ); App. Paso today’s by the Bank. Until for reversal basis — El testimony heard ei- writing, appellate has addressed review concerning misrepresentations written sufficiency of the legal or the the factual ther attorney9 as Hastings made to district at trial. presented evidence attorney.10 as to Keever his Simi well course, is, of consti- role of this Court grand jury larly, Fletcher did tell Const, V, § art. tutionally limited. Tex. appointments his that Keever and about recently Browning-Ferris As we wrote bankruptcy for the Bank to made (Tex.1993): Reyna, 865 up collateral.11 pick proper appli- only to ensure the We review reasonably A conclude that mis- could legal standards other courts cation by Hastings and Fletcher representations there some whether determine of a lack of constituted evidence provides legal for a basis evidence which Accordingly, cause. the court of finding.... If more than a scintilla evi- properly concluded that there was some exists, the claim sufficient such evidence dence, circumstantial, both direct and law, go any challenges as a matter of Hastings falsely Fletcher and testified before weight merely to to be accorded grand jury misrepre- material made Indeed, might evidence. County Attor- sentations to the Ellis District discounted, serving we been well have had ney. ourselves, judicial- be jurors cannot now as ly We are erased from record. Heightened Scrutiny Appellate IV. into empowered to convert some evidence Agreeing that with we should no evidence. higher impose neither a at burden Matthews, 161 Tex. detailing also Omohundro appeal, trial nor a on See (“The (1960) 410-11 suggests fu- Justice Hecht nevertheless that evidence, far in so as meas- might through appli- ture be actions resolved is a “higher evidentiary uring weight preponderance, and cation a standard of (2) demand, ("[M]ere party property to if to deliver a secured the secured had made refusal § party the Penal possession property to is not an offense under to deliver of the secured Code.”). party. the secured 32.33(c) § Even if one Code Tex.Penal advising the that Keever After district 9. presumption a assumes that this statute creates very response” to a "a violent collection had cause, probable presumption that is rebutta- letter, Hastings had admitted at trial Keever misrepresentation a ble. If one makes to response and had never even received no such authority prosecuting in in order to secure an the letter. dictment, rely presumption cannot he on to have In this law known not been violated. jury Hastings grand at conceded trial 10. from record there is some evidence Keever, provided had sent to letters he Has could have concluded that regarding misrepresentations which contained probable tings and Bank did not have Bank’s to the collateral. efforts collect bring grand jury, despite the claim the arguably presumption could have existed testimony grand jury re- Fletcher’s before Nor, suggests, 888 their as Justice Hecht favor. attempted garding collateral collection (Hecht, J., concurring at and S.W.2d 801-802 testimony seemingly trial both conflicts dissenting) nondelivery collat did Keever's employee her and husband. of another Bank contention, eral the Bank cause to believe Contrary afford to Justice Hecht’s (Hecht, J., penal concurring that a violation had occurred. See and Anzaldua at S.W.2d dissenting) 802-803 State, (Tex.Crim.App. S.W.2d from could well have inferred ("The 1985) grand jury property mere refusal to deliver evidence that Fletcher misled this regarding willingness upon to turn over demand does not constitute 'conceal Keever’s "); ing.' Op.Tex.Att’y No. H-980 collateral. Gen. fact; question juris- complains and court Keever Turner, questions.”); diction over fact 556 erred. 565; Meadows, at 524 S.W.2d at 510. Quality Parking, Cavnar Control Justice Hecht intimates an interest Inc., new,

wholly unexplored standard of review. prejudgment held that interest should not be than questionable Other inference drawn punitive damages, on charged reasoning as decision,12 from one at 800 follows: (Hecht, J., concurring dissenting), and virtually Commentators are unanimous in writing sole previously advanced un advocating prejudgment interest not approach known consists of certain dicta damages puni- be awarded future O’Brien, from Sullivan v. 85 S.W.2d 1106 damages. tive d): (Tex.Civ.App. Antonio writ ref — San damages punish Punitive are intended [Plaintiffs’] evidence raises no more than example the defendant and set an suspicion mere surmise or of the fact They others. are assessed over- above sought to be established them. Actions damages necessary the amount of to in- damages prosecution for malicious demnify plaintiff. plaintiff The can law, require not favored more prejudgment thus made whole even if be satisfactory proof required than ordi- is not awarded dam- lawsuits; nary certainly recovery ages. plaintiff is likewise unharmed such cases upon cannot had mere sur- by the defendant’s retention of future dam- suspicion. mise are, ages prior to trial since these Id. general This admonition is hard- nature, very their unaecrued. ly justification engaging for this Court in a (citations omitted). Id. heightened review of the and until however, argues, Legisla- Keever today suggested no one has otherwise. ture has modified Cavnar and authorized practical significance alerting trial punitive damages interest on judges important to the policy interests at by enacting certain cases Tex.Rev.Civ.Stat. just stake in cases is 5069-1.05, 6(a), art. which states: that —an admonishment cautious in death, Judgments wrongful personal in- weighing continuing the evidence while jury, property damage must in- cases afford trial court discretion in determin- Except prejudgment interest. clude as ing admissibility in accord with the Rules of (d) (b), provided by (c), and Subsections Though is Evidence. it claimed that under a section, prejudgment this interest accrues heightened level of review this Court need judgment on during the amount of the weigh not pro- Justice Hecht period beginning day on the 180th after that, suggest precisely blurring ceeds to thus date defendant receives written legal the line between factual on day notice of claim or the suit is (Hecht, J., review. filed, first, ending occurs on whichever concurring dissenting). Today pre- we day preceding the date is appellate serve our traditional standard of rendered. review accordance the Texas Consti- 6(a) argues Keever that since section awards pursuing unpreserved tution rather than this prejudgment interest “on the amount of the proposed and unwise course. judgment,” punitive damages includ- are Prejudgment amount,

V. prejudgment Interest ed interest punitive damages. must on therefore accrue prejudg court district awarded 6(a) punitive damages pack adopted part ment interest on the Section was as aof age legislation. awarded to Keever. The reform T. of tort John Mont Barber, this reversed award. 870 S.W.2d at 74. ford & G. Tort Will Texas (Tex. 1984), applied heightened 12. That this Court standard S.W.2d 751 at best indicates Supremacy compelled of review States felt under mandated United Su- Court preme Doubleday Rogers, engage analysis. Court in & Co. Clause such Quest However, expressly & H in C and More a Fairer for Reform: 41.006 did not decide what actions section (pt. System Texas Civil Justice Predictable applies. The Court wrote: 1), 59,102-08 Anoth- 25 HousJL.Rev. Perhaps would be prejudgment interest package chapter 41 of the part

er of that punitive not on awards covered available Code, and Remedies Texas Civil Practice 41.006], including treble dam- by [section Damages.” “Exemplary entitled Section This re- age [DTPA]. awards under the “Prejudgment chapter of that states: 41.006 legisla- with the sult would be consistent on not be assessed recovered interest purpose encouraging settlements. tive damages.” Today, exemplary an award of on prejudgment interest As the issue of Nationwide, Thompson, 1994 C H Inc. v. & not punitive damages the statute is outside (Tex.1994), the Court states that WL 278167 however, do today, we before the Court 6(a), limits section and that in section 41.006 question. not reach applies, section 41.006 actions (citations omitted). At n. 7 The issue *36 puni- prejudgment interest is not allowed on very issue must in C & H the reserved 6(a). damages, notwithstanding section tive If here. section covers determine integral part This is an conclusion ease, interest is not allowed analysis in the case. The Court Court’s damages. punitive 6(a) requires prejudgment holds that section 41.002(a), chapter part of the same Section paid to be on future award- 41.006, states: “This which includes section reasons, judgment. ed in a The Court claim- chapter applies to an action which a part, Legislature have must intend- exemplary damages relating to a seeks ant 6(a) apply, damages, or ed section to future section 33.001.” action as defined prohibiting prejudgment inter- section 41.006 actually “define” Section 33.001 does damages, punitive kind est on one of future action, but refers to actions causes damages, superfluous. According- would be liability and breach of war- negligence, strict ly, the Court concludes: 41.002(a) ranty. does not state that Section actions, applies nor chapter 41 Prejudgment interest on dam- listing. imply an exclusive Section ages expressly by statute for forbidden 41.002(b) to list actions to which undertakes personal injury, property damage and example, apply. 41 does not For chapter negli- wrongful grounded in death actions 41.002(b)(3) compensa- section lists workers liability, gence [section or strict tort compensation actions tion actions. Workers 6(a) reading Our of section would 41.006.] liability negligence, strict not based express language of sec- overrule listing in warranty. If the section breach 41.006, provisions tion as both were 41.002(a) exclusive, there would be no were package. the same tort reform 41.002(b)(3), sub- and other need section (citation omitted). Thus, contrary parts *11 of that section. At Doggett’s opinion, assertion in Justice the chapter of 41 indicate provisions Other H the Court did not hold in C & that “the only limited to applicability its not phrase judgment’ means all of ‘amount of 41.002(a). in referred to section those actions judgment.” (Doggett, 888 S.W.2d at 803 chapter for the Section 41.001 defines terms Rather, J., dissenting). concurring “malice,” as which would “fraud” specifically stated that cases cov- necessary applied chapter if the not be prejudgment negligence, liability ered section 41.006 interest of to strict and breach warranty re- punitive damages.13 Section 41.003 allows not actions. allowed judg- also be excluded from “the fees est itself would Court also reasoned part interest; not considered purposes computing and costs should other- of ment" for wise, 6(a) judgment” under result, “amount of section compound or interest on interest separate “judgment” light to of references interest, squarely with the statuto- would conflict 5069-1.05, "costs” in art. Tex.Rev.Civ.Stat.Ann. simple provision Montford & ry interest. legal usage as in the well as "common Barber, supra, at 106-07 n. 24. Prejudgment inter- world”. 888 S.W.2d at 803. covery upon Moriel, of exemplary damages (quoting a show- S.W.2d Pacific malice, ing gross 1, 22, of fraud or as well Haslip, as Mut. Ins. v.Co. 499 U.S. Life negligence. 1032, 1045, (1991)). The causes of action referred S.Ct. 113 L.Ed.2d 41.002(a) in section not requires do involve fraud or of One these standards of courts Also, exemplary malice. limits appeals, section 41.007 upholding punitive damage when greater damages to of award, four times actual $200,000, damages or but section 41.008 opin- detail relevant evidence in its states apply that the limitation does not ion, explaining why that evidence either 41.002(a) If intentional torts. section were supports support punitive does not exclusive, chapter 41 did not therefore Kraus, damages light of award [616 torts, apply to intentional there would S.W.2d ] factors. provision need for the in section 41.008. Sec- Moriel, 879 31. The “Kraus fac- expressly contemplates tion 41.008 that sec- tors” are those criteria we articulated tion might applied 41.007 otherwise be Kraus, Alamo Nat’l Bank intentional torts. (Tex.1981), guide appeals a court of damages, being inherently Punitive penal determining punitive damage whether character, enlarged by should not be They award is excessive. include: imposition prejudgment interest in the (1) (2) wrong, the nature of the the charac- express legislative absence of an intent to do involved, (3) ter degree of the conduct expressed so. find no such We intent (4) of culpability wrongdoer, 6(a) section chapter when read with parties situation and sensibilities of the Rather, import we think chapter that the concerned, and the extent to which such whole, taken as a is that section 41.006 is public justice conduct offends sense application limited to the actions propriety. 41.002(a). to in

referred section We believe preclude Although appeals section was intended to an Id. the court in this prejudgment factors, award of interest on case listed the Kraus it did ex- damages might plain required otherwise be how the evidence related each. 6(a). Accordingly, Rather, appeals section simply conclude the court conclud- that Keever is not entitled to ed as follows: punitive damages. re- The evidence of Ellis Bank’s malicious con- spect, appeals of the court duct support is sufficient to award affirmed. punitive damages. Where the finds damages that Keever suffered actual Light VI. Remand in of Moriel $110,600 part and finds malice on the $1,000,000 Ellis an award of is not assessing After actual $110,600 against defendants, patently im unreasonable. This Court cannot say posed punitive damages against under these facts that the award was the Bank of $1,000,000.14 passion prej- so County ar excessive as to indicate Ellis State Bank jury. gues udice on the that the court of erred when subject punitive damage failed to award argues at 71. The Bank scrutiny. proper agree. We court of focused on the first factor, recently imposed proce- wrong, This Court new Kraus the nature of with- punitive damage considering remaining dural adequately standards awards out help certainly satisfy to “ensure that such awards not The court ‘are factors. did not grossly proportion severity explaining why out of to of the Moriel of punitive supports damages offense and have some understandable the evidence ” relationship compensatory damages.’ light to each award in of of these factors. imposed punitive damages judgment. Hastings 14. The also of Court's do not Fletcher $25,000 $260,000 against Tracy against complain punitive damages that awarded $250,000 Hastings, against John Don Harris. against are them excessive. against The award is Harris vacated under

799 plaintiff that agree I with the Court Although was decided after Moriel case, if for malicious damages in this appeals’ of decision recover court case that tort holding applied pending elements of proves should be to each of the he complaint preserved evidence; is party in he preponderance of the by a appeals properly the court of failed to exacting the more stan- required to meet not Here, damage punitive award. scrutinize a convincing evi- dard of —dear specifically argues application in its the Bank I imposed in kinds of cases.1 some dence— appeals of for writ of error that however, in agree, not do adequately fac to consider the Kraus failed support re- legally is sufficient this case Also, rehearing in its motion for en tors. judg- covery. I reverse would therefore pre appeals, in court of the Bank banc judg- courts and render ments of lower “the point complaining error sented of nothing. plaintiffs take Given ment that failing appeals in to order court of erred liability for actual dam- affirms the Court punitive damages awarded remittitur however, I the case should agree that ages, Bank,” point arguing under this against the to con- remanded to the court be damage “patent punitive award was light in damages of punitive the award sider ly and “so excessive as indi unreasonable” Transportation in Ins. our recent decision prejudice part on the passion cate (Tex.1994). I Moriel, Co. specifical jury.” Although the Bank did plaintiffs not entitled agree that also ly in motion refer to the Kraus factors damages. rehearing, adequately preserved this for practice our of “con- issue below under stru[ing] liberally points of error in order I just, equitable adjudication obtain fair and ac- Conflicting policies the cause of define litigants.” rights Sterner one prosecution. On the tion for malicious (Tex. Co.,

Marathon Oil hand, wrongly of crimes persons accused 1989). other, remedy. not without On should be judg- opinion, In accordance with remedy so prospect must appeals is in ment of the court of affirmed reporting of discourage formidable as part, part. and remanded and reversed As we the authorities. criminal conduct to recon- The court of is instructed to ago: long observed punitive damage award in accor- sider the should be important every It citizen with the Mor- dance standards articulated prosecutions, protected iel. equally important that crimes it is PHILLIPS, HECHT, Justice, joined law- order that the punished, should be JJ., C.J., ENOCH, and CORNYN and life, liber- abiding may be secure citizen concurring dissenting part.. ty, property. To make the citizen mulcted in My prior opinion is liable withdrawn and one discharge duty give immuni- honest substituted. Co., chemically dependent persons); id. E.g., Brown v. Edwards treatment Transfer (Tex. 1988) 574.031, .033-035, .069, (court (paternity illegiti §§ ordered .106 case); Doubleday person wrongful mate death services); Tex.Prop.Code health mental (ac Rogers, & Co. v. 674 S.W.2d 751 92.0563, (landlord/tenant statutory §§ reme- .058 involving public tual malice in a defamation case 151.159, (tax dies); exemp- §§ .307 Code TexTax public Addington, figures); State v. officials and (pa- § export goods); tion for TexProb.Code (Tex.1979) (civil commitment 588 S.W.2d 569 (approval independent es- ternity); § id. G.M., (Tex. proceedings); re 596 S.W.2d 846 administration); (removal §§ id. tate 1980) parental (involuntary termination of guardian); §§ representative, id. personal 11.15, §§ rights); 15.024-.025 Tex.Fam.Code 236A, (use corpus); id. estate/trust (same); (separate property); § id. id. 5.02 (pre- § (appointment guardian); § id. (court 12.02(b), (paternity); §§ id. 21.32 13.05 trust); TexR.Disciplinary sumption of revocable Safety support); child ordered §§ Code & Tex.Health (1992), reprinted tit. P. .171-.173, (court TexGov’t 81.169, Code, .190 ordered man (defense app. (Supp.1994) G subtit. agement eases); persons dis of with communicable 462.067-.069, (court reciprocal discipline). §§ ordered id. .075 800 crime,

ty to restraining proof and weaken the higher degree must be of a than law, power of the criminal thereby ordinarily required endan- in civil cases. The security gering law-abiding people. of prose- usual in statement is that malicious positive, cution proof actions the must be 497, Cheney, Sebastian 86 Tex. 25 S.W. satisfactory. clear and (1894). 691, competing 694 To balance these properly, recovery proof [plaintiff] interests the law allows upon The burden of was wrongful prosecution, only very in positive, to show clear convincing carefully defined proof circumstances. there was cause on part of [defendant] to believe that O’Brien, 1106, In Sullivan v. 85 S.W.2d [plaintiff] guilty embezzling.... of 1935, 1112 (Tex.Civ.App. Antonio writ — San refd), the court stated: “Actions for dam however, explained, Another court has ages prosecution for malicious are not fa convincing of clear evi- law, in require vored more satisfacto proof dence does not alter the burden of at ry proof required ordinary than is in law trial: _” suits The courts of have elabo- eases, types including In certain of dam- rated In statement. Ada Oil Co. v. ages prosecution, the for malicious facts (Tex.Civ. 902, Dillaberry, 440 S.W.2d 914 must be established clear convinc- 1969, App. [14th Dist.] writ dism’d — Houston ing fully rule evidence. That is discussed w.o.j.), the court in proof stated: “The mali 238, v. Settegast, [in Carl 237 S.W. prosecution cious of higher actions must (Tex.Com.App.1922)]. degree ordinarily than required in civil case, in The court and in the au- cases, and positive, must clear and therein, points cited thorities out that the satisfactory.” Similarly, in Diamond Sham in practical rule effect is but an admonition Ortiz, Corp. 238, rock 753 S.W.2d great weigh- the court use caution in denied) 1988, (Tex.App. Corpus Christi writ — ing the evidence. (citations omitted), the court stated: “Actions firmly The doctrine is established that prosecution for malicious favored in prepon- issues of fact are resolved from a public policy the law. Not discour requir- derance and issues age bringing actions, of but also the higher ing degree proof prepon- than proof positive, must be clear and satisfacto derance be sub- ry.” Again, Browning-Ferris Indus. v. jury. mitted to the Lieck, 926, (Tex.App . —Cor 685, Dewberry, Andrews v. 1992), pus Christi reversed 881 S.W.2d 288 1951, (Tex.Civ.App. writ refd Worth — Forth recognize the court stated: “We n.r.e.). prosecution that the malicious action proven by convincing must be clear and evi our language Neither nor the Sullivan policies dence.” governing prosecution malicious ac- require heightened proof tions burden of gone Some courts of have further general the trial court. As a rule most suggested proof burden jurisdictions, least, proof the standard higher prosecution should be appears preponderance to be a the evi- Stores, actions. Wal-Mart Inc. v. Medi dence. 54 C.J.S. Malicious Prosecution na, 73 (Tex.App —Corpus . Chermside, at Herbert B. (1987); § denied), Christi writ the court stated: Jr., Cause Action Malicious Prosecu- higher “The burden of [for malicious ShepaRd’s § tion Civil Action than for civil cases] most cases.” (Wesley H. Winborne Causes of Action 255 in Montgomery The court &Ward Co. v. eds., 1985); et al. 52 Am.JuR.2d Malicious Kirkland, (Tex.Civ. agree I Prosecution at n.r.e.) App. Antonio writ refd — San with the that Texas should follow this (citations omitted), explained: same rule. policy favoring expo- Not does [the discourage bringing sure satis- crime] The insistence Sullivan “more actions, prosecution] factory proof required ordinary [malicious but also than not meet which to Probative evidence as an admonishment lawsuits” does serve legally sufficient for would not ap- This standard weighing in the evidence. judges notes, judges liability. in to trial plies, as the Court

deciding set aside a verdict and whether to applied heightened a elear- This Court Harder, trial, order a new see Sanders v. evidentiary re- and-eonvincing standard (1950), 206, 209-210 Tex. 227 S.W.2d Rogers, Doubleday & v. in Co. view judges reviewing appellate in the factual reviewing the in evi- id; evidence, see Meadows There in a defamation case. dence of malice Green, (per by the United required the standard was Matthews, curiam); Tex. Omohundro not con- The Court did States Constitution. (1960). In addi- required a standard applying sider tion, in judges caution trial should exercise Texas weighing of the evidence in admitting evidence such cases. exclusively to the commits Constitution Const, V, § or Tex. art. appeals, courts of II to that the case would have remanded may judicial require more than Sullivan required review. There perform court to weighing the evidence malicious caution per- not why is no reason Court could weighing the prosecution cases. Caution in review in other cases. form same case, required every just not evidence policy important Sullivan and the Whether cases; prosecution no case allows malicious reporting of criminal ac- encouraging It weighing of the evidence. is well to rash tivity require higher standard evidentia- weighing the emphasize importance ry prosecution cases is review in malicious prosecution in malicious cases when evidence in this case. need not be decided issue which conflict, policies important are in but such not may to caution the admonishment Ill enough protect balance be- delicate policies. tween these in this of whether the evidence Regardless scrutiny special with the case is reviewed requirement in of “more Our Sullivan sat- says prose- must be used malicious Court isfactory proof’ quality of evi- refers to cases, scrutiny ordinary cution necessary liability. juryA support dence case, required support it cannot recov- prepon- find that the credible evidence Bank, Tracy County ery against Ellis State if plaintiff, in favor of the derates A. president, John Has- its vice clear, evidence, reviewed, is when not con- (I Jr., agree with the tings, attorney. satisfactory, vincing, positive and it should support there is no evidence liability. may argue support One Don recovery against the owner applied in this standard should be determin- Harris.) verdict, ing grant judg- whether to directed veredicto, trial, in ment non obstante or new prove plaintiff must element which a One judgment, deciding summary for motions of action for to establish the factual and appellate review both had no is that the defendant prosecution legal sufficiency of the evidence. initiating procuring probable cause standard, defined proceedings. We have higher appellate applied to criminal This facts the existence legal sufficiency of the evi- cause as a review of the as would excite belief dence, require weighing of and circumstances should mind, person, acting on case, le- reasonable In the usual evidence is evidence. person knowledge his liability if it is facts within gally support sufficient to he for which was scintilla, is, guilty of the crime if there at was more than a Dahl, prosecuted. Akin probative no matter how least some denied, 938, 104 (Tex.1983), cert. 466 U.S. Applying to ma- higher standard small. Glenn cases, liability 80 L.Ed.2d would be S.Ct. licious violating section prosecuted supporting if is Keever sustained Code, part: which states clear, satisfactory. Penal convincing, positive 32.33 of the (b) person signed security appointments A who has a pick up for Bank to agreement creating security a collateral. if, ... property commits an offense with Hastings’ misrepresentation was absolute-

intent to hinder enforcement of that inter- ly immaterial. Whether Keever reacted vio- ..., removes, conceals, destroys, est he lently calmly efforts, or to collection or encumbers, or or otherwise harms reduces all, nothing whether he reacted at what- property. the value do ever to with whether he violated section (c) section, purposes For per- of this a Assuming Hastings intentionally 32.33. lied presumed son is to have to hinder intended attorney, to the district one cannot infer from security enforcement lien interest or fact alone probable whether he had if, any part of by when the debt secured cause think to that Keever had violated sec- security due, lien interest or was he tion or not. failed: problematic Fletcher’s “nonstatement” is (1) due; pay to then First, respects. in several Fletcher has not appointments conceded the Bank missed party if the secured had made de- by up may set Keever. Fletcher have been mand, possession of to deliver the se- this, wrong about and there is evidence that property to party. cured the secured she was. But right whether she was in fact question There is no that Keever failed to wrong appointments or about whether were $6,000 pay plus interest which he owed jury missed —and since the could have found County May 1987, the Ellis Bank in or State wrong, she was we will they assume that that after the Bank made for demand return did—one cannot infer from evidence of collateral, to posses- he refused deliver appointments missed that Fletcher’s failure property sion of the to the Bank for well over grand jury to mention them to the shows year. There is that Keever of- evidence that she had no reasonable belief that Keever get fered Bank allow the to come had violated section 32.33. The reason collateral, and evidence Bank failed grand Fletcher did not jury tell about keep appointments to do so. But it is appointments may just missed as well have undisputed that Keever never delivered any been that did she not believe had oc- even offered to deliver the collateral to the Second, omitting curred. information is not Bank, obliged by which he was to do his equivalent giving false information. A security agreement with the Bank. After person fail state information because year loan default for over a mind, slips it his he because does not paid nothing Keever had had turned important, it consider reasons which cannot collateral, over the Bank had justify giving Inferring false information. violating reason to believe that Keever was probable lack cause from a failure to dis- section 32.33. close information more difficult than infer- A ring defendant a malicious misrepresentation the same from a presumed case is to have reasonably, Thirdly, importantly, acted facts. and most faith, good cause, and with probable until the omitted information is immaterial in this plaintiff Akin, produces contrary evidence. disputed case. There is evidence that Keev- case, 920. In appointments pick S.W.2d at there is no er made with the Bank to Bank, collateral, up direct evidence that the Fletcher Bank and the failed to Hastings initiating appear. undisputed lacked But there is evidence proceedings appointments criminal Keever. The the Bank made all, Court, keep. ques- cited is an Keever And there is no failed inference from statement made Has- tion that Keever never delivered the collater- tings do, and a obliged nondisclosure Fletcher. Has- al to the as he was tings told year the district more Keever than after his loan was de- had violently reasonably reacted a collection letter fault. It cannot inferred from when in fact he not. appointments had Fletcher failed the fact that Bank missed grand tell assuming, Keever had made with as the could Keever— I. no found, had a fact —that the Bank have Keever was to believe that probable cause opted for majority has rehearing, On violating 32.33. section remedy. statutory enforcement of selective measure, probative By any there is interest on argues Keever employee and Bank and its that the in case is damages awarded punitive the procure cause to lacked that by the mandated For this of Keever. the criminal death, proper- injury, and “wrongful personal reason, judgment I would reverse prejudgment interest ty damage cases.... judgment appeals and render court of judgment....” amount accrues on the nothing. plaintiff take 5069-1.05(6)(a) art. Tex.Rev.Civ.Stat.Ann. added). in held C (emphasis We (Supp.1994) IV Tex.Sup. Thompson, 37 & H Nationwide Court, however, liability The affirms (Nov. 149,160 24,1993), phrase Ct.J. attorney, president vice the Bank and its all of the judgment” means “amount of the prosecution. Giv- individually, for malicious damages.1 including future Now judgment, decision, punitive award of dam- en this statutory ig- unequivocal command ap- by ages reviewed the court must be nored. Transportation Ins. peals in accordance with reading of this My plain for a preference (Tex.1994). Morid, Ac- Co. v. reading of by plain statute is buttressed join part I in of the Court’s cordingly, prohibition of express In its second statute. remanding to the court judgment the case damages punitive on prejudgment interest join holding in I the Court appeals. also by range nonintentional produced broad not awarded prejudgment interest should torts, damages. punitive on Ann. & Rem.Code Tex.Civ.PRAC. Legislature exclud- § (Supp.1994), 41.006 Justice, DOGGETT, joined by an assault or torts such as ed intentional HIGHTOWER, SPECTOR, GAMMAGE and 41.006, like prosecution. Section JJ., concurring dissenting part. in 41, applies only “action[s] chapter all of damages exemplary which a claimant seeks 11, 1994, May is with- My prior opinion of by as defined cause of action relating following is substituted drawn and Section 33.001.” & Rem.Code. clarity for the Tex.Civ.Prac. place. For the sake of reader 41.002(a) 33.001 (Supp.1994). § Section today’s opinion, Gonzalez has Ann. Justice prod- grounded negligence, includes claims writing adopted my in full earlier inasmuch liability, but none that liability uct and strict opinion on as it of the Court constituted nature. Tex.Civ.Prac. are intentional & considered. 37 Tex. most issues See (Supp.1994). (Parts 11,1994) I, II, IV, Rem.CodeAnn. (May Sup.CtJ. 783 punitive prejudgment interest V). denial join portions I therefore those rewriting judicial damages Court, here constitutes opinion for the Justice Gonzalez’s 41.002(a) extending exclu- holding newly of section separate an- dissent to a category of claims to a here, in section 41.006 remand to the sion as well as the nounced clearly apply.2 quite which it Appeals. Court of statute, prejudgment on the passed interest construing therein a similar California 1. In damages punitive should be allowed. prejudgment held that interest courts have Inc., Sys., T v. AT & also Bihun See compensatory be awarded both should Info. Cal.Rptr.2d Cal.App.4th injury damages personal punitive cases. In holding in (explaining Corp., Spectrum 174 Cal. Greenfield Investment Greenfield judg provision 'the statute’s ‘based ... on the (1985), Cal.Rptr. App.3d interest_' added.)”). (italics ment shall bear Appeals Court of held: California that, clearly Indeed, § 3291] states that "... legislature determined [Cal.Civ.Code legal damages, at the regard punitive shall bear interest intentional from, percent...." one be treated There is and should rate of 10 torts are different than, liability light differently negligence and strict judgment.... of the utilization & Rem.Code See Tex.Civ.Prac. “judgment” in both com- cases. term section Ann. (Supp.1994): § 41.008 pensatory are encom- action, moreover, majority’s Crenshaw, conflicts Casualty Bankers & Co. v. Life with the of & H Legisla- 71, 88, rationale C that the 1645, 1656, 486 U.S. 108 S.Ct. solely compen- ture was concerned with (1988) (O’Connor, J., L.Ed.2d 62 concurring money, sation for the lost use of but also part). requested Yet the Bank never trial modify par- intended to the behavior of the very court submission of the factors to encourage Tex.Sup. ties settlement. adopted in provide Texas Kraus to standards reserving Ct.J. at 160-61. While the issue of limiting jury. discretion After whether should be failing request guided punitive damages awarded on not covered factors, the Kraus complained the Bank § 41.006 of the Civil Practice and Remedies appeals only the court of size Code, Phillips, writing Chief Justice for the punitive damages verdict was the result of Court, noted that such a result “would be discretion, jury standardless and now raises legislative consistent with the en- purpose of the Kraus standards for the first time. couraging settlement.” Id. at 161 n. 1. To- any proper preservation Without of error on day’s contrary simply conclusion cannot be issue, wholly a remand is unwarranted. Therefore, squared portion with C &H. of appeals the court disal- III. lowing prejudgment interest on requirement preservation error, damages should be reversed. consistency the need for at least some application

II. regardless of our law of the im- beneficiary, mediate and the demand that our Transportation Insurance Co. v. Mor judiciary apply the law as written id, this Court Legislature may have become outmoded recently declared that a court of some, concepts they to me remain “must detail the relevant evi hereinafter system justice. fundamental to our contrary up dence” to a verdict when holding punitive damages award

challenge based the factors set forth Kraus,

Alamo National Bank added). (emphasis Today simply

the “hereinafter” read retroactivity

out replaced of Moriel and any “party preserved [that] has the com

plaint court of failed to

properly punitive damage scrutinize OFFICE OF PUBLIC UTILITY award.” 888 S.W.2d at 799. But then the COUNSEL, Petitioner, Court declines even to adhere to this altera unquestionably tion for Bank here the failed preserve any point. error The PUBLIC UTILITY COMMISSION primary Bank’s in its contention motion for OF TEXAS and West Texas Utilities rehearing en of appeals Company, banc the court Respondents. punitive damage subject award was No. D-0679. requirements to the chapter 41 of the Texas Civil Practices and Remedies Code. Supreme of Texas. devoting pages After six of its motion to this Sept. Argued argument, paragraph the Bank added a which, rather “specifically refer[ring] than Decided June factors,” the Kraus S.W.2d at “wholly complained of the standardless dis- puni-

cretion” with which the awarded damages, citing only

tive a concurrence in [limiting damages apply exemplary restdting Section 41.007 the amount of exem- plary properly awarded] from malice ... or to an intentional tort.

Case Details

Case Name: Ellis County State Bank v. Keever

Court Name: Texas Supreme Court

Date Published: Sep 3, 1994

Citation: 888 S.W.2d 790

Docket Number: D-3413

Court Abbreviation: Tex.