Joyce Steel Erection, Ltd. v. Gordon Ray Bonner

Opinion

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

3 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.

4 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

5 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.

6 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.

9 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.

10 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