Court Opinion

ID: 9668433
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:13:03.005239+00
Date Added: 2024-06-11T18:15:45.443829
License: Public Domain

DOGGETT, Justice,
dissenting.
The court’s growing fear that victims of injustice will get too much justice causes it to confer a windfall to wrongdoers. Today’s opinion not only unjustly enriches those who violate the law, but also provides them with an incentive to make litigation as prolonged and difficult as possible. To accomplish this unfortunate result, the court rejects both the widely accepted majority rule and its own landmark holding in Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex.1984).
Despite a jury finding that it knowingly violated Insurance Code article 21.21 through unfair settlement practices and improper trade practices, Stewart Title is today permitted to avoid payment of $400,000 of the $600,000 that it owes. This rather handsome reward for litigiousness conveys a message of permissiveness to those who disregard our laws — if you wait long enough and fight hard enough you can get off for thirty-three cents on the dollar of the amount a jury determines you owe.
Visiting the graveyard of abandoned legal precedents, the court today mystically revives the corpse of Bradshaw v. Baylor University, 126 Tex. 99, 84 S.W.2d 703 (Tex.1935), and the one recovery rule it embodied. We had previously pronounced Bradshaw dead in determining that “[t]he reasoning behind the one recovery rule no longer applies.” Duncan, 665 S.W.2d at 431, and concluding that “to the extent it conflicts with this opinion, we overrule Bradshaw v. Baylor University.” Id. at 432. Now this court has awakened yet another dead tort principle to roam the land, terrorizing victims. As in The Night of the Living Dead, an unthinking zombie is raised to prey on the living. When this court has resurrected enough of these monsters, the landscape of tort law will be bleak indeed, and let the victims beware.
*13The one recovery rule of Bradshaw is dead, and because I prefer to let the dead rest in peace, I dissent.
In Duncan, aware that Cypress Creek Utility Serv. Co. v. Muller, 640 S.W.2d 860 (Tex.1982), reserved the question of “how does the Bradshaw one recovery rule apply in cases not controlled by Art. 2212a [providing for comparative fault in negligence cases]?”, Duncan, 665 S.W.2d at 430, we proceeded to provide an answer, thereby resolving the very issue presented today:
We hold that in multiple defendant cases in which grounds of recovery other than negligence are established, the non-settling defendants’ liability and the plaintiffs recovery shall be reduced by the percent share of causation assigned to the settling tortfeasor by the trier of fact.
665 S.W.2d at 429.1 This writing was unequivocal and spoke broadly:
The term “tortfeasor” includes those whose liability is based on strict products liability, breach of warranty, and negligence.
665 S.W.2d at 430. Both the holding and the reasoning of Duncan certainly apply to any intentional, knowing or wilful tort, and particularly any statutory tort, such as Stewart Title’s unfair settlement practice and improper trade practice.
As noted in a thoughtful and thorough commentary on this complex subject, Duncan overruled Bradshaw “without reservation.” Russell H. McMains, Contribution and Indemnity Problems in Texas MultiParty Litigation, 17 St. Mary’s L.J. 653, 661 (1986) (hereinafter McMains). Treating our recent writing as a comment limited to products liability litigation, see page 6, contradicts our clear, direct, and controlling rejection of the very premise underlying the one recovery rule for any case. Today’s contorted reading further conflicts with the repeated interpretation of Duncan by other courts. In addition to the court of appeals decision here, 772 S.W.2d 242, 248, see Mobil Chemical Co. v. Blount Bros. Corp., 809 F.2d 1175, 1180 (5th Cir.1987) (“We doubt the ‘one satisfaction’ rule can withstand the rule of Duncan in any context, tort or contract.”); Merit Drilling Co. v. Honish, 715 S.W.2d 87, 89 (Tex.App.—Corpus Christi 1986, writ ref’d n.r.e.) (Bradshaw’s one recovery rule survived Duncan only to the extent it was already embodied in former article 2212a).
In an attempt to justify disregarding Duncan, the court offers our writing in Ojeda de Toca v. Wise, 748 S.W.2d 449 (Tex.1988), which never mentions the one recovery rule.2 That case is particularly inapplicable, since the parties never raised or briefed the issue of a credit, and since settlement occurred not pretrial but pending appeal to this court.3
The old belief in the indivisibility of every tortious injury produced a number of harsh doctrines, including not only the concept of one satisfaction, but also the complete bar on contribution, non-apportionment of damages among tortfeasors, and contributory negligence as a total bar to a victim’s recovery. Like the one recovery rule, these doctrines have been discredited and rejected. See Dobson v. Camden, 705 F.2d 759, 767 (5th Cir.1983), vacated on rehearing on other grounds, 725 F.2d 1003, 1004 (1984) (en banc); see also W. Page Keeton, Dan B. Dobbs, Robert E. Keeton & David G. Owen, Prosser and *14Keeton on the Law of Torts 470 (W. Page Keeton, ed., 5th ed. 1984) (hereinafter Pros-ser & Keeton) (discussing the historical perspective on the divisibility of injury).
With the advent of the twentieth century, courts increasingly began to realize that even when an injury is indivisible, liability can, and should, be apportioned. Robertson v. Trammell, 83 S.W. 258 (Tex.Civ.App.—1904, writ ref’d) (release given for partial satisfaction does not release other tortfeasors); McMillen v. Klingensmith, 467 S.W.2d 193, 195 (Tex.1971) (“The legal basis for the unity of release has been challenged by every legal scholar who has examined it.”). As Prosser and Keeton conclude, “the principal of comparative fault apportionment of damages is veritably sweeping the land....” Prosser & Keeton at 479. While not all injuries may be divisible, fault is generally divisible. Id. 470-71.
In Duncan we recognized that the one satisfaction concept is no longer viable because comparative causation “allows allocation of liability between the parties, even when the injury itself is indivisible.” 665 S.W.2d at 431. The “crude headcounting” approach of the one recovery rule was appropriately replaced with “a more refined percent allocation of liability.” Id. at 430.4 Since credit based on the entire amount paid by a settling party regardless of fault, or a “dollar-for-dollar credit,” ignores the very concept of comparative fault, it has been rejected by jurisdictions across the country. Today Texas has moved away from the well established majority preference for determining a credit relative to fault.5
Where, as here, no comparative causation question is submitted, the court of appeals is correct that “there is no right to credit for settlement between plaintiff and other defendants.” 772 S.W.2d at 248. Because Stewart Title did not object to the failure to submit comparative fault nor request such an issue, it waived any right to seek a credit. See First Title Co. of Waco v. Garrett, 802 S.W.2d 254, 261-62 (Tex.App.—Waco 1990, no writ).
Even where otherwise mandated by the one recovery rule, an exception has been made to bar contribution among intentional, wilful or otherwise outrageous tort-feasors. See Prosser & Keeton at 336-39. Contribution is the payment by one tort-feasor of its proportional share of damages directly to another joint tortfeasor against whom a judgment is rendered. See Black ⅛ Law Dictionary 328 (6th ed. 1990). The well established majority rule is that contribution among knowing tortfeasors is not allowed. See Restatement (Second) of Torts § 886(A)(3) & cmt. j (1977); Huddleston v. Herman & MacLean, 640 F.2d 534, 557 (5th Cir.1981). In accord with this view is the statutory prohibition against contribution in cases of both intentional tort and in those involving violation of the Deceptive Trade Practices Act (“DTPA”), Tex. Bus. & Com.Code §§ 17.41 et seq., or of the Insurance Code, Tex.Ins.Code art. 21.21. Tex.Civ.Prac. & Rem.Code § 33.002(a), (b)(2) & (3). Contribution is similar to application of the one recovery rule insofar as both result in a diminution in the amount a *15particular tortfeasor must pay. Allowing Stewart Title to avoid liability on the basis of a third party settlement under the one recovery rule thus achieves the same result as the very contribution which this statute forbids. The court’s apparent regression to the view that tort injuries are indivisible and that fault may not be apportioned permits a result contrary to this legislative directive.
Despite its strong similarity, contribution differs from the one recovery rule by requiring the tortfeasor to pay the entire judgment and then seek payment from the joint tortfeasor, rather than simply allowing a reduction of the amount of the tort-feasor’s debt to the injured party. Although it should not approve a one recovery rule that allows non-settling tort-feasors to circumvent the current statutory ban on contribution, the court cannot justify its claim that the former contribution statute6 is controlling. See page 6. Since application of the one recovery rule does not come directly within the definition of contribution, no contribution statute could directly control this case.
Nothing in Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19 (Tex.1987), a case involving significantly different facts, mandates application of the former contribution statute. In this pure contribution action, after settling with the plaintiff, one defendant sought contribution from a second defendant; no attempt was made by either defendant to obtain a credit against the plaintiff. Furthermore, in complete accord with Duncan, we held in Jinkins that the defendant could not obtain contribution as “a settling party has no right to common law contribution because he can settle only his proportionate share of liability....”, id. at 21, and reaffirmed Duncan’s determination that a party should be obligated to pay for its proportionate share of causation. Rather than limiting our prior holding, we broadly “agree[d] that the common law scheme adopted in Duncan permits settlement of only a proportionate share of liability.” Id.7
Several additional practical and policy concerns have compelled the nationwide rejection of the one satisfaction approach and adoption of comparative causation and a percentage recovery. One is the necessary distinction between the value of a settlement and the amount of damages awarded by a jury. The court today assumes that a settlement with third parties of $400,000 should result in a $400,000 reduction in the jury’s trebled $200,000 award. See page 8. As we explained in Duncan, however:
Settlement dollars represent a contractual estimate of the value of the settling tortfeasor’s liability and may be more or less than the proportionate share of the plaintiff’s damages. The settlement includes not only damages, but also the value of avoiding the risk, expense, and adverse public exposure that accompany going to trial.
665 S.W.2d at 431. It may be that some or even most of the $400,000 tendered by the settling parties was paid to avoid risk, and that reducing the $600,000 verdict by that amount denies Sterling of some of the damages award to which he legitimately is entitled.
In reviving the one recovery rule, the court erroneously assumes that the law’s only purpose is to compensate victims and again ignores the objective of deterring wrongdoers. See Caller-Times Publishing Co., Inc. v. Triad Communications, Inc., 1992 WL 34083*19 (Tex.1992) (Doggett, J., dissenting) (noting that the court has effectively eliminated the possibility of *16law énforcement in all antitrust predatory pricing actions). Not only is deterrence the basis for treble damages under article 21.21 of the Insurance Code, it was an explicit reason for rejecting Bradshaw’s one recovery rule in Dobson, 705 F.2d at 765-66. That court explained that while the archaic one recovery rule was concerned only with avoiding unjust enrichment to the plaintiff, the law should also be concerned with holding the tortfeasor liable for the full share of the damage it causes in order to discourage similar misconduct in the future. Id. at 769-70.
In an apparent attempt to avoid unjust enrichment for the wronged, the court has guaranteed unjust enrichment for the wrongdoers. If one responsible for 50% of an injury settles for $50,000, and a second party responsible for the other half of the injury chooses to present its case to a jury, a determination that the total damages actually incurred were $50,000 is possible. The non-settling defendant should not be excused from payment of the $25,000 in damages it caused. Although the plaintiff then receives $75,000, there is no injustice, as this court has previously explained:
[A]ny enrichment of plaintiffs under the new system of comparative causation is not unjust, for the simple reason that no one is harmed. The settling defendant cannot complain, because he agreed to pay. The non-settling defendant has no right to complain, because he was not a party to and is not affected by the settlement.
Duncan, 665 S.W.2d at 431.
Under today’s opinion, however, injustice of another kind does occur. As several courts have agreed:
The one-compensation rule, grounded in unjust enrichment, is not to be applied in such a way as to generate unjust enrichment to the only litigating defendant.... It would be unjust enrichment ... to give the only defendant who was eventually found liable ... a full pro tanto credit for the full amount paid by the others.
Dobson, 705 F.2d at 769, quoting Rose v. Associated Anesthesiologists, 501 F.2d 806, 809 (D.C.Cir.1974); accord, Theobald v. Angelos, 208 A.2d 129 (N.J.1965). By refusing settlement in a multi-party case, a tortfeasor can reap the benefits of settlement among any of the other parties. Stewart Title provides an example: it was found to have knowingly violated the Insurance Code, yet by avoiding settlement it saved itself $400,000 of what a jury found it should pay. This outcome cannot be reconciled with our observation that permitting non-settling tortfeasors to profit from strict application of the one recovery rule is an “unfair result” which “should not be approved.” Duncan, 665 S.W.2d at 431 (emphasis added).
Allowing a tortfeasor to enjoy a windfall as a reward for recalcitrance is in complete conflict with this court’s alleged preference for settlements. See Rainbo Baking Co. v. Stafford, 787 S.W.2d 41, 42 (Tex.1990); Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex.1989); Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 4 (Tex.1986). Why resolve a multi-party case promptly when awaiting another party’s settlement may produce a substantial credit? Moreover, exercising a dollar-for-dollar credit as approved today “shieldfs] plaintiffs from the effect of bad settlements while denying them the benefit of good settlements.” Duncan, 665 S.W.2d at 430; see also, Gomes v. Brodhurst, 394 F.2d 465 (3d Cir.1967).
Even if some vigor did remain in the tired bones of the one recovery rule, the court has failed to apply it correctly. Application of the rule necessarily depends on the determination that there was an inseparable, single injury suffered by the plaintiff for which only one recovery may be had. Further, the defendants must be established to be joint tortfeasors. First Title, 802 S.W.2d at 261-63. Indeed, Jinkins, on which the court relies, was concerned only with cases involving such joint tortfeasors. 739 S.W.2d at 20, 22.
Because Stewart Title’s conduct was a separate and distinct act from that of the other defendants, employment of the one recovery rule is entirely inappropriate. Stewart Title never met its burden of es*17tablishing either that there was a single injury or that it was a joint tortfeasor. There were two different causes of action involving two different misrepresentations, one as to title, the other as to insurance coverage, as well as a separate claim for unfair claims settlement. Where such different actions exist, the one recovery rule should never be used. As the court of appeals correctly observed in affirming the trial court, “[njeither the seller, nor its legal counsel, could have committed [the] violations” of the Insurance Code for which Sterling recovered against Stewart Title. 772 S.W.2d 242, 248. The settlement with those parties should not, therefore, affect this statutory liability. The jury clearly found that Stewart Title and Stewart Title alone caused damages in the amount of $200,000 in response to the following question:
What amount of money do you find from a preponderance of the evidence constitutes W. Dawson Sterling’s actual damages, if any, that were produced by any deceptive trade practices, unconscionable action or course of action, unfair claims settlement practice, or improper trade practice, if any, found by you to have been committed by Stewart Title Guaranty Company.
Id. at 247 (emphasis added). Stewart Title should be required to pay those damages for which it is solely responsible.
Indeed, this court recognizes that there were two distinct bases for liability when it concludes that “the attorney’s fees are capable of segregation.” See page 12. This necessarily means that the suit against Stewart Title involved separate costs and considerations than that against the other defendants. If there were truly but one single act and injury, the attorney’s fees could never be segregated.
Nor does the court ever explain why the court of appeals’ reliance on Mayo v. John Hancock Mut. Life Ins. Co., 711 S.W.2d 5 (Tex.1986), is misplaced. In that case, a single act of denying maternity benefits produced recovery for an insurer’s violation of the Insurance Code and, separately, for its violation of the DTPA. Id. at 6-7; see also Shell Oil Co. v. Chapman, 682 S.W.2d 257, 259 (Tex.1984) (allowing recovery against the same defendant for the same act under both negligence and DTPA theories). Ojeda de Toca v. Wise, 748 S.W.2d 449, is once again the only writing by this court cited to the contrary. In that case there were multiple parties but apparently no separate article 21.21 action against the insurers.8
In addition to applying an abandoned rule to a case in which it would not have been used even when the rule was followed, the court has incorrectly calculated the credit. Relying on Schering Corp. v. Giesecke, 589 S.W.2d 516 (Tex.Civ.App.—Eastland 1979, writ ref’d n.r.e.), a pre-Dun-can case, the court adopts a dollar-for-dollar credit for a previous pretrial settlement. See pages 9-10. Under Duncan, the reasoning and holding of Schering have clearly been overruled. 665 S.W.2d at 430; cf. McMains at 659.
Any dollar-for-dollar credit should have been limited to the $200,000 amount of compensatory damages found by the jury. In Providence Hospital v. Truly, 611 S.W.2d 127 (Tex.Civ.App.—Waco 1980, writ dism’d), which the court now disapproves, see page 10, the settling defendants paid $35,000, but the trial resulted in a finding of only $15,000 in actual damages under the DTPA. The trial court’s post trebling credit of $15,000 was upheld as consistent with the deterrent purposes of the DTPA. Since the settlement agreement did not specify that the amount paid was in part for the compensation of statutory damages arising from the settling defendant’s deceptive trade practices, the entire $35,000 was considered “actual compensatory damages.” Id. at 137. The court reasoned that because the settlement was for compensatory damages only, and the trebled damage portion of the judgment was in the *18nature of exemplary damages, the proper credit amount was applied only towards the portion of the judgment which represented compensatory damages, $15,000. Under this approach, which respects the punitive nature of trebling damages for a statutory violation, Stewart Title would be entitled only to a credit of the $200,000 in compensatory damages. While the court is correct that any credit should occur after the trebling of compensatory language, no credit was proper here since the non-settling defendant failed to request the jury to apportion liability.
To most members of the Bar and all members of the public the subject matter of today’s writing is truly arcane. However, the process by which this court arrived at its decision — a process involving disregard for its own recent precedent, a statute, and the majority view in order to change the ground rules of litigation— should be of concern to all. This is not the last dead tort principle that this court is eager to resuscitate. Like the movies, this opinion will have its sequels. Unlike the movies, the havoc the court effects on our traditional tort law will cause direct harm to the lives of thousands of ordinary Texans.
MAUZY and GAMMAGE, JJ., join in this dissent.

. The exclusion of actions based upon negligence results from their inclusion under former article 2212a, Act of March 22, 1973, 63rd Leg., R.S., ch. 28, § 1, 1973 Tex.Gen.Laws 41 (codified at Tex.Civ.Prac. & Rem.Code § 33.001-33.-012) (comparative contribution in negligence cases according to percentage of fault). Duncan, 665 S.W.2d at 429.

. Although Wise does mention that the defendant may on remand request a credit based on a settlement with third parties, 748 S.W.2d at 451, it did not hold that such a credit was proper or would be granted, but simply declined to consider the issue at that stage in the proceedings. Since Duncan does . t foreclose the possibility of receiving a percentage credit relative to comparative fault, Wise properly noted that a credit might be appropriate, not that a dollar-for-dollar credit would apply.

.Because the Wise settlement took place after trial while the case was pending further appeal, this court in granting dismissal as to the settling parties sought only to preserve any pre-existing rights on remand.

. This is true for both intentional and unintentional misconduct. While the court asserts that "there is no comparative fault allocation for intentional torts,” see page 6, in fact the percent of damages actually caused by each tortfeasor can be allocated.

. See Thomas R. Trenkner, Annotation, Modem Development of Comparative Negligence Doctrine Having Applicability to Negligence Actions Generally, 78 A.L.R.3d 339, 354-62 (noting approximately twenty-nine states with some form of comparative negligence and reduction in credit relative to fault and another six with a pure system of comparative reduction regardless of percentage of causation). See, e.g., Thomas v. Solberg, 442 N.W.2d 73, 77-78 (Iowa 1989) (quoting extensively from and following Duncan); Vannoy v. Uniroyal Tire Co., 111 Idaho 536, 726 P.2d 648, 650, 658 (1985) (expressly adopting the Duncan rule); Charles v. Giant Eagle Markets, 513 Pa. 474, 522 A.2d 1 (1987) (citing Duncan); Kussman v. City and County of Denver, 706 P.2d 776, 779-80 (Colo.1985); Cartel Capital Corp. v. Fireco of New Jersey, 410 A.2d 674, 685 (N.J.1980); Leger v. Drilling Well Control, Inc., 592 F.2d 1246, 1249 (5th Cir.1979); Gomes v. Brodhurst, 394 F.2d 465, 468-69 (3d Cir.1967); see also, Dobson v. Camden, 705 F.2d 759, 764-70 (5th Cir.1983) (adopting percent credit rule in section 1983 civil rights cases), vacated on rehearing, 725 F.2d 1003, 1004 (1984) (vacated because court found no joint liability).

. Tex.Rev.Civ.Stat. art. 2212, repealed by Act of June 16, 1985, ch. 959, § 9(1), 1985 Tex.Gen. Laws 7218.

. That today’s opinion is not concerned with the absence of any showing of comparative liability by Stewart Title is all the more remarkable since its author, Justice Gonzalez, joined the dissent in Jinkins. 739 S.W.2d 19, 22 (Ray, J., dissenting). That dissent agreed that the purpose of contribution, as with a percentage credit, "is to distribute equitably the burden of the common wrong between or among those responsible.” Id. It realized that ”[t]he underlying equities are not subverted so tong as the nonsettling parties are given the opportunity to litigate their comparative liability_" Id. (emphasis added).

. The only other case relied upon by the court is American Baler Co. v. SRS Systems, Inc., 748 S.W.2d 243 (Tex.App.—Houston [1st Dist.] 1988, writ denied). Though involving multiple defendants, SRS did not concern a defendant’s settlement with a resulting credit, but rather an election of remedies for a single act against defendants still party to the suit.