Court Opinion

ID: 4069859
Source: CourtListenerOpinion
Date Created: 2016-09-30 00:53:52.12816+00
Date Added: 2024-06-11T14:33:01.577333
License: Public Domain

ACCEPTED
                                                                                     03-14-00738-CV
                                                                                             6105954
                                                                          THIRD COURT OF APPEALS
                                                                                     AUSTIN, TEXAS
                                                                                7/16/2015 5:20:51 PM
                                                                                   JEFFREY D. KYLE
                                                                                              CLERK
                         Oral Argument Requested

                            No. 03-14-00738-CV                    FILED IN
                                                           3rd COURT OF APPEALS
                                                               AUSTIN, TEXAS
                          In The Court of Appeals          7/16/2015 5:20:51 PM
                       For The Third District of Texas       JEFFREY D. KYLE
                                 at Austin                         Clerk

Elness, Swenson, Graham            §      From the 200th District Court
Architects, Inc.,                  §
Appellant and Cross-Appellee,      §
                                   §
v.                                 §
                                   §
RLJ II-C Austin Air, LP,           §
RLJ II-C Austin Air Lessee, LP     §
and RJL Lodging Fund II            §
Acquisitions, LLC,                 §
Appellees and Cross-Appellants.    §      Of Travis County, Texas

                  CROSS-APPELLANTS’ REPLY BRIEF

MUNSCH, HARDT, KOPF
& HARR, P.C.

Michael W. Huddleston                  Benton T. Wheatley
State Bar No: 10148415                 State Bar No. 24015171
J. Stephen Gibson                      Tracy McCreight
State Bar No: 07866000                 State Bar No. 24037064
3800 Ross Tower                        401 Congress Avenue
500 North Akard Street                 Suite 3050
Dallas, Texas 75201                    Austin, TX 78701
214-855-7500 telephone                 512-391-6100 telephone
214-855-7584 facsimile                 512-391-6149 facsimile

ATTORNEYS FOR APPELLEES,
CROSS-APPELLANTS
                  IDENTITY OF PARTIES AND COUNSEL
      The undersigned counsel of record, pursuant to Texas Rule of Appellate

Procedure 38.2, certifies that the following persons have an interest in the outcome

of this case:

Appellant, Cross-Appellee:       Elness, Swenson, Graham Architects, Inc.
Appellant’s, Cross-Appellee’s    Weston M. Davis
Counsel on Appeal:               Gregory N. Ziegler
                                 Steven R. Baggett
                                 Macdonald Devin, P.C.
                                 1201 Elm Street
                                 3800 Renaissance Tower
                                 Dallas, TX 75270

Appellant’s, Cross-Appellee’s    Weston M. Davis
Counsel at Trial:                Gregory N. Ziegler
                                 Matthew Mumm
                                 Macdonald Devin, P.C.
                                 1201 Elm Street
                                 3800 Renaissance Tower
                                 Dallas, TX 75270

Appellees, Cross-Appellants:     RLJ II-C Austin Air, LP
                                 RLJ II-C Austin Air Lessee, LP
                                 RLJ Lodging Fund II Acquisitions, LLC

Appellees’, Cross-Appellants’    Michael W. Huddleston
Counsel on Appeal:               J. Stephen Gibson
                                 Munsch Hardt Kopf & Harr, P.C.
                                 3800 Ross Tower
                                 500 North Akard Street
                                 Dallas, Texas 75201

                                         ii
Appellees’, Cross-Appellants’   Benton T. Wheatley
Counsel at Trial:               Tracy McCreight
                                Munsch Hardt Kopf & Harr, P.C.
                                401 Congress Avenue
                                Suite 3050
                                Austin, TX 78701

                                    By:     /s/ Michael W. Huddleston

                                            Attorney for Appellees, Cross-
                                            Appellants

                                      iii
             STATEMENT CONCERNING ORAL ARGUMENT
      Appellees and Cross-Appellants respectfully request oral argument in this

case. Appellees and Cross-Appellants respectfully submit that oral argument will

assist the Court in resolving the issues necessary to decide this appeal.

                                          iv
                                          TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................. ii
Statement Concerning Oral Argument .....................................................................iv
Table of Contents .......................................................................................................v
Index of Authorities ............................................................................................... viii
I.       Joint and Several Liability Is Necessary For
         “One Satisfaction” Settlement Credit. ............................................................. 1
         A.       All Courts That Have Actually Considered Whether
                  Joint and Several Liability Is Necessary Have Ruled That It Is. ......... 1
         B.       The Joint and Several Liability Requirement Is Not Satisfied
                  When There Is No Potential Joint and Several Liability. ..................... 4
                  1.        Joint Contractual Liability Was Not Admitted
                            In RLJ’s Pleading. ....................................................................... 4
                            a.       Request to Impose Joint and Several Liability Included
                                     Request for Joint or Several Liability. .............................. 5
                                     1)       RLJ Was Seeking the Broadest Relief Possible,
                                              Not to Narrow the Relief Available. ...................... 5
                                     2)       The Architect Ignores RLJ’s Intent Manifest in the
                                              Rest of the Prayer. .................................................. 5
                  2.        The Request for Relief Did Not Clearly, Deliberately and
                            Unequivocally Allege Joint Contractual Liability. ..................... 6
                            a.       Then-Pending Tort Claims Supported Request for
                                     Imposition of Joint and Several Liability. ........................ 7
                            b.       Specific Allegations Negated Joint or Common
                                     Contractual Duty. .............................................................. 7
                            c.       Joint and Several Liability Request Asserted a Legal
                                     Conclusion And Is Not a “Fact” That Can Be
                                     Judicially Admitted........................................................... 8
                  3.        The Architect Waived the Effect of Any Admission On
                            Introduction of Evidence Showing No Joint Duty. .................... 9
         C.       Potential Joint Contractual Liability Not Presumed From
                  Any Failure to Allocate Damages. ......................................................10
         D.       RLJ Had No Notice The Architect Would Claim Under the
                  One Satisfaction Rule Credit for Contractual Liability Settlements... 11

                                                            v
                 1.       The Architect Only Pleaded Chapter 33 Tort Contribution,
                          Not “One Satisfaction” Settlement Contribution ......................11
                 2.       Limiting Its Contribution Claim to Chapter 33 Only
                          Prevents the Architect from Relying on Bases for
                          Claiming Contribution. .............................................................12
                 3.       Liberal Construction Is Not a License to
                          Infer Claims Not Alleged. .........................................................12
                 4.       There Was No Opportunity And No Need to Allocate............. 13
        E.       Indivisible Injury Alone Does Not Establish Joint and Several
                 Contractual Liability or the “One Satisfaction” Settlement Credit. .... 15
II.     “One Satisfaction” Settlement Credit Does Not Apply to
        Any Contractual Liability. .............................................................................18
        A.       Beware the Multiple Uses of “One Satisfaction.”...............................18
                 1.       There Was No “One Satisfaction” Settlement Credit
                          Until After Article 2212 Was Enacted. .....................................20
                 2.       The Cases Cited By The Architect Did Not Involve
                          Settlement Credits. ....................................................................20
                 3.       Utts Does Not Suggest That the “One Satisfaction”
                          Settlement Credit Existed at Common Law
                          Before Article 2212...................................................................21
        B.       This and Other Texas Courts Have Refused to Apply “One
                 Satisfaction” Settlement Credits to Contractual Liability. .................. 22
        C.       CTTI Is Still Valid. ..............................................................................25
                 1.        No Later Decision Expressly Limits or Overturns CTTI. ......... 25
                 2.       Stare Decisis and En Banc Standards Make Sub
                          SilentioOverruling of CTTI Both Unthinkable and Unlikely. .. 26
                 3.       Pool May Potentially Conflict with CTTI, But Does Not
                          Overrule It. ................................................................................27
                 4.       Conflicts With Other Cases. .....................................................29
        D.       Extension of “One Satisfaction” Settlement Credit to
                 Contractual Liability Prohibited by
                 Texas Constitution Article I, Section 16. ............................................30
III.    Conclusion .....................................................................................................31
Certificate of Compliance ........................................................................................33

                                                          vi
Certificate of Service ...............................................................................................33

                                                          vii
                                    INDEX OF AUTHORITIES

                                                                                                         Page(s)
CASES
Aerospatiale Helicopter Corp. v. Universal Health Servs., Inc.,
   778 S.W.2d 492 (Tex. App.—Dallas 1989, writ denied) ..................................... 5

Alvord v. Waggoner,
   88 Tex. 615, 32 S.W. 872 (1895) .......................................................................21
AMX Enters., Inc. v. Bank One, N.A.,
  196 S.W.3d 202 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) ...............26

Andrews v. Harvey,
  39 Tex. 123 (1873)..............................................................................................21
Austin Home Ctr. Associates v. State,
  794 S.W.2d 593 (Tex. App.—Austin 1990, no writ) .........................................27
Barstow v. State,
  742 S.W.2d 495 (Tex. App.—Austin 1987, writ denied)..................................... 7
Bartley v. Guillot,
  990 S.W.2d 481 (Tex. App.—Houston [1st Dist.] 1999, pet. denied) ......... 24-25
Bd. of Ins. Comm’rs of Tex. v. Guardian Life Ins. Co. of Tex.,
   142 Tex. 630, 180 S.W.2d 906 (1944) ................................................................. 5

Bentley v. Bunton,
  94 S.W.3d 561 (Tex. 2002)...................................................................................8

Boulet v. State,
  189 S.W.3d 833 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ..................9, 15
BP Am. Prod. Co. v. Marshall,
  288 S.W.3d 430 (Tex. App.—San Antonio 2008),
  rev’d on other grounds, 342 S.W.3d 59 (Tex. 2011) .....................................2, 24

Broughton Assoc. Joint Venture v. Boudreaux,
   709 S.W.3d 324 (Tex. App.—Waco 2002, no pet.) ...........................................13

                                                       viii
Burke v. Union Pac. Res. Co.,
  138 S.W.3d 46 (Tex. App.—Texarkana 2004, pet. denied) ...............................29

CBI NA-CON, Inc. v. UOP, Inc.,
  961 S.W.2d 336 (Tex. App.—Houston [1st Dist.] 1997, pet. denied) ............... 24

Crown Life Ins. Co. v. Casteel,
  22 S.W.3d 378 (Tex. 2000)..........................................................................passim

CTTI Priesmeyer, Inc. v. K&O Limited Partnership,
  164 S.W.3d 675 (Tex. App.—Austin 2005, no pet.) ...................................passim

Cunningham v. Haroona,
  382 S.W.3d 492 (Tex. App.—Fort Worth 2012, pet. denied) ............................30

El Paso Nat. Gas v. Berryman,
   858 S.W.2d 362 (Tex. 1993) .................................................................. 19, 29-30
Elliott v. Newsom,
   No. 01-07-00692-CV, 2009 WL 214551
   (Tex. App.—Houston [1st Dist.] Jan. 29, 2009, no pet.)(mem. op.) .................... 9

Emerson Elec. Co. v. Am. Permanent Ware Co.,
  201 S.W.3d 301 (Tex. App.—Dallas 2006, no pet.) ..........................................30

Fairfield Ins. Co. v. Stephens Martin Paving LP,
   246 S.W.3d 653 (Tex. 2004) ..............................................................................31
Fina Supply, Inc. v. Abilene Nat’l Bank,
   726 S.W.2d 537 (Tex. 1987) ..............................................................................19

First Title Co. of Waco v. Garrett,
   860 S.W.2d 74 (Tex. 1993)..........................................................................passim

Flowers v. Flowers,
   407 S.W.3d 452 (Tex. App.—Houston [14th Dist.] 2013, no pet.) ................... 12

Galle, Inc. v. Pool,
  262 S.W.3d 564 (Tex. App.—Austin 2008, pet. denied) ............................passim
GE Capital Commercial Inc. v. Worthington Nat’l Bank,
  754 F.3d 297 (5th Cir. 2014) ............................................................................2, 9

                                                      ix
Goggin v. Grimes,
  969 S.W.2d 135 (Tex. App.—Houston [14th Dist.] 1998, no pet.) ................... 16

Griffin v. Superior Ins. Co.,
   161 Tex. 195, 338 S.W.2d 415 (1960) ................................................................. 7

Gym-N-I Playgrounds, Inc. v. Snider,
  220 S.W.3d 905 (Tex. 2007) ..............................................................................30

Hennigan v. I.P. Petroleum Co.,
  858 S.W.2d 371 (Tex. 1993) ................................................................................ 7

Heritage Gulf Coast Properties, Ltd. v. Sandalwood Apartments, Inc.,
  416 S.W.3d 642 (Tex. App.—Houston [14th Dist.] 2013, no pet.) ................... 12

Highlands Ins. Co. v. Currey,
   773 S.W.2d 750 (Tex. App.—Houston [14th Dist.] 1989, writ denied) .............. 6
Horizon Offshore Contractors, Inc. v. Aon Risk Servs. of Tex., Inc.,
  283 S.W.3d 53 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) ............... 19
Horizon/CMS Healthcare Corp. v. Auld,
  34 S.W.3d 887 (Tex. 2000)...................................................................................6
Houston First Am. Sav. v. Musick,
  650 S.W.2d 764 (Tex. 1983) ............................................................................6, 9
Hunt v. Ellisor & Tanner,
  739 S.W.2d 933 (Tex. App.—Dallas 1987, writ denied) ......................... 2, 22-23
Ilami v. Rowinska,
   No. 05-07-00893-CV, 2008 WL 3522242
   (Tex. App.—Dallas Aug. 14, 2008, no pet.) ........................................................ 8

In re Prudential Ins. Co. of Am.,
    148 S.W.3d 124 (Tex. 2004) ..............................................................................30

In re Velazquez,
   660 F.3d 893 (5th Cir. 2011) ................................................................................ 5
Kizer v. Meyer, Lytton, Allen & Whitaker, Inc.,
   228 S.W.3d 384 (Tex. App.—Austin 2007, no pet.) ..............................19, 25, 27

                                                        x
Landers v. East Texas Salt Water Disposal Co.,
  151 Tex. 251, 248 S.W.2d 731, 734 (1952) ...................................................3, 15

Lentz Eng’g, L.C. v. Brown,
   No. 14-10-00610-CV, 2011 WL 4449655
   (Tex. App.—Houston [14th Dist.] Sept. 27, 2011, no pet.)(mem. op.)................ 6
Lewis v. Taylor,
  17 Tex. 57 (1856)................................................................................................21
LJ Charter, LLC v. Air America Jet Charter, Inc.,
   No. 14-08-00534-CV, 2009 WL 4794242 (Tex. App.—Houston [14th
   Dist.] Dec. 15, 2009, pet. denied) ......................................................................... 2

Madison v. Williamson,
  241 S.W.3d 145 (Tex. App.—Houston [1st Dist.] 2007, no pet.) ................19, 26

Matthew v. Sohn,
  13-12-00302-CV, 2013 WL 2949562
  (Tex. App.—Corpus Christi 2013, no pet.)(mem. op.) ......................................30
Mays v. Pierce,
  203 S.W.3d 564 (Tex. App.—Houston [14th Dist.] 2006, pet. denied)............. 16

Mendoza v. Fid. & Guar. Ins. Underwriters, Inc.,
  606 S.W.2d 692 (Tex. 1980) ................................................................................ 6
Metal Bldg. Components, LP v. Raley,
  No. 03-05-00823, 2007 WL 74316
  (Tex. App.—Austin Jan. 10, 2007, no pet.)............................................ 25, 27-28

Molberg v. State,
  No. 03-13-00330-CV, 2014 WL 904286
  (Tex. App.—Austin 2014, no pet.) ....................................................................... 6
Monsanto Co. v. Milam,
  494 S.W.2d 534 (Tex. 1973) ..........................................................................7, 12

O’Connor v. First Court of Appeals,
  837 S.W.2d 94 (Tex. 1992).................................................................................27

Osborne v. Jauregui, Inc.,
  252 S.W.3d 70 (Tex. App.—Austin 2008, pet. denied) ..............................passim

                                                         xi
Oyster Creek Fin. Corp. v. Richwood Investments II, Inc.,
  176 S.W.3d 307 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) ......... 29-30

Paschall v. Peevey,
  813 S.W.2d 710 (Tex. App. – Austin 1991, writ denied)..................................... 2

Regions Bank v. Bay,
  No. 05–12–00531–CV, 2013 WL 5299174
  (Tex. App.—Dallas Sept. 18, 2010, no pet.)(mem. op.).....................................30
Seureau v. ExxonMobil Corp.,
   274 S.W.3d 206 (Tex. App.—Houston [14th Dist.] 2008, no pet.) ................... 16
Smith v. Deneve,
  285 S.W.2d 904 (Tex. App.—Dallas 2009, no pet.) ..........................................12
SmithKline Beecham Corp. v. Doe,
  903 S.W.2d 347 (Tex. 1995) ..............................................................................12
Stewart Title Guar. Co. v. Sterling,
   822 S.W.2d 1 (Tex. 1992)............................................................................passim

Storrie v. Cortes,
   90 Tex. 283, 38 S.W. 154 (1896) .......................................................................31

Sun Oil Co. v. Robicheaux,
   23 S.W.2d 713 (Tex. Comm. App. 1930)...........................................................17
Utts v. Short,
   81 S.W.3d 822 (Tex. 2002)........................................................................... 21-22

Walker v. Packer,
  827 S.W.2d 833 (Tex. 1992) ................................................................................ 1

Warren v. La Salle Co.,
  262 S.W. 527 (Tex. Civ. App.—Austin 1924, writ dismissed w.o.j.).................. 5

Whitley v. King,
  227 S.W.2d 241 (Tex. Civ. App.—Waco 1950, no writ) ..................................... 8

OTHER AUTHORITIES
Tex. R. App. P. 41.2(c) ............................................................................................27

                                                         xii
      I.     JOINT AND SEVERAL LIABILITY IS NECESSARY FOR
             “ONE SATISFACTION” SETTLEMENT CREDIT. 1
      The settlement credit issue is whether the Architect was entitled to any

settlement credit at all, not the amount. Contrary to the Architect’s suggestion

(Cross-Appellee’s 5), applicability of the settlement credit is a legal question

reviewed de novo, Galle, Inc. v. Pool, 262 S.W.3d 564, 570 n.3 (Tex. App.—

Austin 2008, pet. denied). No discretion is allowed in deciding the law or applying

it to the facts. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).

      The Architect insists, without authority, that “Texas law does not require

joint and several liability for application of the one satisfaction rule” concerning

settlement credits. (Cross-Appellee’s 6). It also alleges that RLJ “seeks to …

introduc[e] a new requirement – joint and several liability,” as if that requirement

were previously unknown. (Cross-Appellee’s 7). Apparently, it maintains that

“indivisible injury” alone is enough. (Cross-Appellee’s 14-17).

A.    All Courts That Have Actually Considered Whether Joint and
      Several     Liability Is Necessary Have Ruled That It Is.
      The Texas Supreme Court, this Court (twice), the Fifth Circuit, and other

Texas appellate courts recognize that “one satisfaction” settlement credits only

1
  The Architect fails to distinguish between the multiple differing circumstances in which
the phrase “one satisfaction” is used. To avoid confusion, RLJ refers to the issue in this
case as involving the “‘one satisfaction’ settlement credit” to distinguish it from other
doctrines under the broader “one satisfaction” heading. See II.A., infra.

                                            1
apply to joint liability. GE Capital Commercial Inc. v. Worthington Nat’l Bank,

754 F.3d 297, 306 (5th Cir. 2014); Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378,

390 (Tex.2000); First Title Co. of Waco v. Garrett, 860 S.W.2d 74, 78 (Tex.1993);

Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 8 (Tex.1992); LJ Charter, LLC

v. Air America Jet Charter, Inc., No. 14-08-00534-CV, 2009 WL 4794242 at *9

(Tex. App.—Houston [14th Dist.] Dec. 15, 2009, pet. denied); BP Am. Prod. Co. v.

Marshall, 288 S.W.3d 430, 456 (Tex. App.—San Antonio 2008), rev’d on other

grounds, 342 S.W.3d 59 (Tex.2011); CTTI Priesmeyer, Inc. v. K&O Limited

Partnership, 164 S.W.3d 675, 684 (Tex. App.—Austin 2005, no pet.); Paschall v.

Peevey, 813 S.W.2d 710, 712 (Tex. App. – Austin 1991, writ denied). CTTI

specifically ruled:

      Because tortfeasors cannot be jointly and severally liable for contract
      damages, and other contract defendants are only jointly and severally
      liable for breaches of contracts to which they are a party or that
      promise the same performance, we … affirm the trial court’s decision
      to deny any settlement credits.
164 S.W.3d at 685 (emphasis added).

      After calling the requirement a “straw man” (Cross-Appellee’s 7), the

Architect later recognizes the need for joint and several liability. It argues GE

Capital “holds only that the one-satisfaction rule requires an allegation of joint and

several liability between the defendants.” (Cross-Appellee’s 10). The Architect

also attempts to distinguish Hunt v. Ellisor & Tanner, 739 S.W.2d 933, 938 (Tex.

                                          2
App.—Dallas 1987, writ denied), because “it did not involve any allegations of

joint liability….” (Cross-Appellee’s 18). As the Architect itself recognizes, joint

and several liability is prerequisite for a “one satisfaction” settlement credit.

       Allowing this credit in non-tort cases based on indivisible injury alone

ignores Texas joint and several tort liability law. After Landers v. East Texas Salt

Water Disposal Co., joint and several tort liability is based solely on indivisible

injury. 151 Tex. 251, 248 S.W.2d 731, 734 (1952), Thus, some post-Landers tort

cases discuss indivisible injury requirement without mentioning joint and several

liability because, post-Landers, in tort cases the former automatically satisfies the

latter. The Texas Supreme Court made abundantly clear that joint and several

liability is essential to receiving a “one satisfaction” settlement credit. Casteel, 22
S.W.3d at 390; Garrett, 860 S.W.2d at 78; Sterling, 822 S.W.2d at 8. There was no

potential joint and several contractual liability here, 2 so there could be no “one

satisfaction” settlement credit. 3 (Cross-Appellants’ 23-29, 34-39).

2
  The Architect does not question that joint contractual liability requires promising the
same performance. The Architect only argues that the joint liability requirement was
satisfied by taking three words in the relief RLJ requested out of context while ignoring
detailed allegations that the Architect and Settling Defendants breached distinct
contractual duties. (Cross-Appellee’s 9). Why this argument is meritless is explained in
I.B., infra.
3
  Demonstrating the dearth of supporting authority, the Architect resorts to arguing
whether such credits are available in breach of contract cases. (Cross-Appellee’s 7-9). To
uphold the settlement credit in this case, the Architect must prevail on both the joint-and-
several and the contractual liability issues.

                                             3
B.    The Joint and Several Liability Requirement Is Not Satisfied
      When There Is No Potential Joint and Several Liability.
      The specific factual allegations about the Defendants’ respective contractual

duties showed that there was no common undertaking. (Cross-Appellants’ 25-31,

34-39). The Architect attempts, however, to create the appearance of potential joint

and several liability by arguing “RLJ pled that [the Architect and the Settling

Defendants] were jointly and severally liable for RLJ’s breach of contract claims.”

(Cross-Appellee’s 9; emphasis added). Nothing in RLJ’s request specifically

refers to “breach of contract claims” 4 as the Architect says. (CR202; Id.). Nowhere

does RLJ “admit” Defendants’ contractual liability was joint.

      1.     Joint Contractual Liability Was Not Admitted In RLJ’s
             Pleading.
      The Architect’s categorical and incorrect assertion is based exclusively on

three words – “jointly and severally” – in RLJ’s request for relief. (CR202). RLJ

pleaded tort claims against all Defendants for which joint and several liability

would have been appropriate. (CR197-200). Many pages of RLJ’s petition and

supporting documentation detail facts showing that each Defendant’s contractual

duties were dissimilar and distinct. (CR192-93, 197-98, 200-01, 209-12).

4
 The prayer requests “judgment against the Defendants, jointly and severally, for [RLJ’s]
damages, interest, attorneys' fees, costs, and any other relief to which [it] may be
entitled.” (CR202; emphasis added).

                                           4
Nevertheless, the Architect argues as if the general request for relief overrides

more specific allegations and alone admits joint and several liability.

             a.     Request to Impose Joint and Several Liability
                    Included Request for Joint or Several Liability.
       The Architect is wrong. Pleadings must be interpreted reasonably by

construing words in context and allowing substance to control form. See Warren v.

La Salle Co., 262 S.W. 527, 531 (Tex. Civ. App.—Austin 1924, writ dismissed

w.o.j.).

                    1)     RLJ Was Seeking the Broadest Relief
                           Possible, Not to Narrow the Relief Available.
       The request for judgment against all “Defendants, jointly and severally” is

included in a prayer seeking that and “any other relief.” (CR202). In context, it

cannot be reasonably interpreted to seek only joint liability. “And” refers to “either

or both” when manifest intent and context requires. In re Velazquez, 660 F.3d 893,

898 (5th Cir. 2011); see Bd. of Ins. Comm’rs of Tex. v. Guardian Life Ins. Co. of

Tex., 142 Tex. 630, 180 S.W.2d 906, 908 (1944); Aerospatiale Helicopter Corp. v.

Universal Health Servs., Inc., 778 S.W.2d 492, 502 (Tex. App.—Dallas 1989, writ

denied). “Jointly and severally,” in context, also requested joint or several liability.

                    2)     The Architect Ignores RLJ’s Intent Manifest
                           in the Rest of the Prayer.
       Even if “and” were only conjunctive, the Architect’s interpretation ignores

RLJ’s manifest intent. Seeking the maximum relief available, RLJ requested “any

                                           5
other relief to which [it] may be entitled.” Read reasonably and in that context, the

prayer did not only seek to hold the defendants jointly liable. It also included an

assertion of several liability. Therefore, the request that the Defendants be “jointly

and severally” liable was pleaded alternatively, not unequivocally, that the

Defendants’ contractual liability was only joint.

       To be judicially admitted, a fact allegedly must be alleged deliberately,

clearly and unequivocally. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d
887, 905 (Tex.2000); Mendoza v. Fid. & Guar. Ins. Underwriters, Inc., 606
S.W.2d 692, 694 (Tex.1980). Only “‘[a]ssertions of fact, not pled in the

alternative, in [a party’s] live pleadings’” may be judicial admissions. Molberg v.

State, No. 03-13-00330-CV, 2014 WL 904286 at *2 (Tex. App.—Austin 2014, no

pet.)(quoting Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 767 (Tex.1983);

emphasis added). RLJ’s request for relief was, at most, equivocal and could not

judicially admit joint liability.

       2.     The Request for Relief Did Not Clearly, Deliberately and
              Unequivocally Allege Joint Contractual Liability.
       This is especially true when the entire pleading is considered, as it must be

when deciding whether it is sufficiently clear, deliberate, and unequivocal to

judicially admit a fact. Lentz Eng’g, L.C. v. Brown, No. 14-10-00610-CV, 2011
WL 4449655, at *1 (Tex. App.—Houston [14th Dist.] Sept. 27, 2011, no

pet.)(mem. op.); see, e.g., Highlands Ins. Co. v. Currey, 773 S.W.2d 750, 755

                                          6
(Tex. App.—Houston [14th Dist.] 1989, writ denied)(no admission in motion when

party specifically denied the same fact in its answer); Barstow v. State, 742 S.W.2d
495, 509 (Tex. App.—Austin 1987, writ denied)(no admission when motion

contained conflicting statements). “[M]ere mistake or slip of the tongue must be

eliminated” before a statement may be treated as a judicial admission. Hennigan v.

I.P. Petroleum Co., 858 S.W.2d 371, 372 (Tex.1993)(quoting Griffin v. Superior

Ins. Co., 161 Tex. 195, 338 S.W.2d 415, 419 (1960)).

            a.     Then-Pending Tort Claims Supported Request for
                   Imposition of Joint and Several Liability.
      RLJ alleged pending tort claims so that including a request for joint and

several liability was appropriate for those claims. It does not necessarily or even

reasonably follow that such request must have also included contractual liability.

            b.     Specific Allegations Negated Joint or Common
                   Contractual Duty.
      This is further illustrated because the specific facts alleged contradict any

inference that RLJ admitted joint liability. Reasonable interpretation means

specific allegations control more general averments. Monsanto Co. v. Milam, 494
S.W.2d 534, 536 (Tex.1973). RLJ alleged breaches of distinct contractual

obligations by the Soils Engineer (CR192, 211-212), General Contractor (CR192),

and the Architect. (CR192, 205-07). These factual averments eliminated as a

matter of law any potential joint contractual liability. (Cross-Appellants’ 25-28,

                                         7
35-39). Even the Architect agreed that its responsibilities were different.

According to its closing argument, “An architect is not an engineer [or] … a

general contractor.” (10RR33). “Architects do not … and cannot second-guess

engineers.” (10RR34). The specific factual allegations, therefore, control the

general relief requested over whether the contractual liability alleged was joint.

             c.     Joint and Several Liability Request Asserted a
                    Legal Conclusion And Is Not a “Fact” That Can
                    Be Judicially Admitted.
      Whether liability is joint and several is a legal conclusion, not a factual

assertion. See Bentley v. Bunton, 94 S.W.3d 561, 619 (Tex.2002)(conspiracy

finding “requires the legal conclusion to impose joint and several liability”); Ilami

v. Rowinska, No. 05-07-00893-CV, 2008 WL 3522242, at *2 (Tex. App.—Dallas

Aug. 14, 2008, no pet.)(“defendants are jointly and severally liable” is a “legal

conclusion”). “The mere fact that plaintiffs incidentally inserted in their petition

the legal conclusion that ‘[the defendant], under the facts alleged, is further liable

to plaintiffs, jointly and severally, in his individual capacity’ did not in any respect

change or alter the nature and character of the cause of action otherwise asserted

….” Whitley v. King, 227 S.W.2d 241, 244 (Tex. Civ. App.—Waco 1950, no

writ)(emphasis added).

      Even if the request had “admitted” potential joint contractual liability, it

would not have been binding because it concerned a question of law, not fact.

                                           8
Boulet v. State, 189 S.W.3d 833, 838 (Tex. App.—Houston [1st Dist.] 2006, no

pet.). Admission of a legal conclusion has no legal effect. Elliott v. Newsom, No.

01-07-00692-CV, 2009 WL 214551, at *2 (Tex. App.—Houston [1st Dist.] Jan.

29, 2009, no pet.)(mem. op.).

       3.     The Architect Waived the Effect of Any Admission On
              Introduction of Evidence Showing No Joint Duty.
       Further, the Architect waived reliance on any such admission by permitting

the introduction of contradictory evidence without objecting that the matter had

been conclusively established. “The party relying on his opponent’s pleadings as

judicial admissions of fact, however, must protect his record by objecting to the

introduction of evidence contrary to that admission….” Musick, 650 S.W.2d at

769.

       When RLJ introduced evidence precluding any joint contractual liability, the

Architect never asserted it was barred by judicial admission. (Cross-Appellants’ 7-

11, 34-38). For this additional reason, there is no judicial admission of joint

contractual liability. Without allegation of or evidence showing a joint contractual

liability, there is no distinction between this case and GE Capital.5 Neither

involved pleadings for potential joint contractual liability.

5
  The Architect asserts that RLJ argues the “one satisfaction” settlement credit “only
applies if there is a finding of joint and several liability between the defendants.” (Cross-
Appellee’s 10). RLJ made no such argument. When Chapter 33 does not apply, there is
no mechanism for obtaining any liability finding about a settling party’s liability. RLJ

                                             9
C.     Potential Joint Contractual Liability Not Presumed From Any
       Failure to Allocate Damages.
       Without potential joint contractual liability in this case, no duty to allocate

ever arose. The Architect acknowledges (Cross-Appellee’s 11) there must first be

“some damages for which there could be joint and several liability.” CTTI, 164
S.W.3d at 685, n.3. Nevertheless, it dismisses CTTI as merely “explain[ing] the

burden[-]shifting procedure” for “one satisfaction” settlement credits. (Cross-

Appellee’s 12). The Architect ignores that the CTTI footnote it cites concludes:

       [t]his burden shifting applies only where there are at least some
       damages for which there could be joint and several liability. Because
       … there can be no damages for which CTTI is jointly liable with other
       settling parties, K & O had no burden to allocate….

Id. (emphasis added). CTTI rejected the Architect’s suggestion (Cross-Appellee’s

11-13) that the duty to allocate arises regardless of whether the potential liability

would be joint. Failure to allocate does not otherwise make “joint” a separate

settled liability. There must be a potential joint liability before allocation is

necessary. According to the Architect, it had no common contractual duty with any

Settling Defendant. (10RR33-39).

does not quarrel whether the joint and several liability requirement is satisfied by
allegation or introduction of evidence supporting such liability. It need not do so. Neither
happened in this case. Rather, the pleading and the evidence showed that there was no
possibility, as the Architect itself argued to the jury (Cross-Appellants’ 38-39), that the
Architect’s and the Settling Defendants’ liability could have arisen from any common
contractual duty. (Cross-Appellants’ 34-38).

                                            10
D.    RLJ Had No Notice The Architect Would Claim Under the
      One Satisfaction Rule Credit for Contractual Liability
      Settlements.
      Further, RLJ had no notice of any need to allocate because the Architect

never pleaded for any “one satisfaction” settlement credit. The Architect asserts

that its answer, “construed liberally … did provide notice of ESG’s intent to reduce

any damage award based on sums received [from] other settling parties” (Cross-

Appellee’s 28), and that RLJ was at fault for not “request[ing] … an ‘opportunity’

to … apportion[] its damages.” (Cross-Appellee’s 3, 26). (Id.).

       1.     The Architect Only Pleaded Chapter 33 Tort
              Contribution, Not “One Satisfaction” Settlement
              Contribution
       The Architect’s selective quote from its answer 6 omits its explicit limitation

to a Chapter 33 settlement credit. The Architect pleaded:

      Alternatively, if the economic loss rule does not completely bar all of
      Plaintiffs’ tort claims, then, pursuant to Chapter 33 of the Texas Civil
      Practice and Remedies Code, Defendants are entitled to a credit for
      any settlement Plaintiffs receive from any other person or entity. If
      Plaintiffs settle with any other person or entity, then Defendants

6
  Attempting to create the appearance of pleading for a “one satisfaction” settlement
credit implicitly acknowledges the Texas Rule of Civil Procedure 94 obligation to plead
for it affirmatively. Under 2212, it was unnecessary to affirmatively plead for the “one
satisfaction” settlement credit because no fact issue was potentially presented. The credit
was fixed by statute on a per capita basis. (Cross-Appellants’ 22). Under modern
practice, a “one satisfaction” settlement credit is not fixed and must be pleaded as an
affirmative defense under Rule 94. (Cross-Appellants’ 57-59). Cases stating generally
that it is unnecessary to plead the “one satisfaction” settlement credit appear to have
uncritically adopted language from cases decided when the credit amount was fixed by
article 2212.

                                            11
      reserve the right to make a written election of credit for settlement
      under §33.014 of the Texas Civil Practice and Remedies Code.[ 7]

(CR47; emphasis added).

      2.     Limiting Its Contribution Claim to Chapter 33 Only
             Prevents the Architect from Relying on Bases for
             Claiming Contribution.
      Specific allegations control general assertions. Monsanto Co., 494 S.W.2d at

536. Pleading a particular ground precludes reliance on others not alleged.

Heritage Gulf Coast Properties, Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d
642, 660 (Tex. App.—Houston [14th Dist.] 2013, no pet.); Smith v. Deneve, 285
S.W.2d 904, 916 (Tex. App.—Dallas 2009, no pet.). The Architect’s pleading

cannot be reasonably read to request a “one satisfaction” settlement credit.

      3.     Liberal Construction Is Not a License to Infer Claims
             Not Alleged.
      Liberal construction is not a “license to read into [a pleading] a claim that it

does not contain.” Flowers v. Flowers, 407 S.W.3d 452, 458 (Tex. App.—Houston

[14th Dist.] 2013, no pet.). It only allows that which may be “reasonably inferred

from what is specifically stated.” SmithKline Beecham Corp. v. Doe, 903 S.W.2d
347, 354 (Tex.1995). Allegation of a “one satisfaction” settlement credit against

contractual liability cannot be inferred from the Architect’s pleading for Chapter

33 tort contribution.

7
 This section was repealed September 1, 2003, nine years before the Architect’s Second
Amended Answer. (CR46).

                                         12
       This is especially true because, when the Architect asserted Chapter 33

contribution, RLJ’s tort claims were still pending. (CR197-200). The trial court

only later rendered a take-nothing summary judgment on those claims. (CR1710).

After the trial court disposed of the tort claims, RLJ settled with the Settling

Defendants. (Cross Appellants’ 11). The Architect never pleaded or otherwise gave

RLJ any notice it would seek a “one satisfaction” settlement credit. 8

       4.     There Was No Opportunity And No Need to Allocate.
       The Architect further asserts that RLJ now attempts to “show allocation of

damages on appeal despite the fact that [it] presented no such evidence to the trial

court.” (Cross-Appellee’s 2). This is incorrect for several reasons. “A party cannot

waive a right before [it] is in a position to assert it.” Broughton Assoc. Joint

Venture v. Boudreaux, 709 S.W.3d 324, 328 (Tex. App.—Waco 2002, no pet.).

Without notice the Architect was claiming a “one satisfaction” settlement credit for

contractual liability, RLJ can hardly be faulted for not allocating. 9

8
  Because the Architect failed to plead the “one satisfaction” settlement credit, its
arguments concerning laches (Cross-Appellee’s 29) are founded on an incorrect premise
and need not be considered further.
9
  If allocation was necessary, the Architect’s delay until after trial in raising the “one
satisfaction” settlement credit issue deprived RLJ of its right to have the jury resolve all
fact issues. This delay alone foreclosed the application of the one satisfaction rule due to
laches. (Cross-Appellants’ 58-59). The Architect’s contention that laches as an avoidance
was waived by not being pleaded is baseless because the Architect never pleaded for any
contractual liability contribution defense. RLJ specifically asserted laches when the issue
arose post-trial. (CR1817). The Architect never objected this avoidance was untimely.
(CR1633-39).

                                            13
      The lynchpin of the Architect’s allocation argument was that RLJ’s petition

asserted potential joint and several contractual liability. As shown here and

previously (Cross-Appellants’ 34-39), it did no such thing. The Architect never

satisfied its “initial burden to show that there are ‘at least some damages for which

there could be joint and several liability.’” (Cross-Appellee’s 12; see also Cross-

Appellee’s 27). The need to allocate never arose.

      The Architect further misapprehends what must be allocated. It argues

incorrectly RLJ had “to show allocation of damages applicable only to ESG.”

(Cross-Appellee’s 12; emphasis added; see also Cross-Appellee’s 27). Actually,

allocation is only required for settlement proceeds, not the non-settling defendant’s

damages. CTTI, 164 S.W.3d at 675, n.3.

      Even if it were necessary to allocate to specifically identify those damages

for which the Architect was liable, the jury’s verdict did that. (Cross-Appellants’

40-47). The charge only asked about the damages from the Architect’s failure to

comply with its own contractual obligations, not for all damages resulting from all

Defendants’ alleged breaches. (CR1127; App.B). According to this Court and the

Texas Supreme Court, the “one satisfaction” settlement credit would not apply for

this reason alone.

      The [“one satisfaction” settlement credit] rule guards against a
      plaintiff receiving a windfall “by recovering an amount in court that
      covers the plaintiff’s entire damages, but to which a settling defendant
      has already partially contributed. The plaintiff would otherwise be

                                         14
      recovering an amount greater than the trier of fact has determined
      would fully compensate for the injury.”

Osborne v. Jauregui, Inc., 252 S.W.3d 70, 75 (Tex. App.—Austin 2008, pet.

denied)(quoting First Title Co. v. Garrett, 860 S.W.2d 74, 78 (Tex.1993)).

      RLJ questions whether the “one satisfaction” settlement credit applies at all.

It does not question whether, if the Architect was entitled to such a credit, the trial

court correctly calculated the amount. The Architect’s discussion of allocation is

ultimately an immaterial diversion.

E.    Indivisible Injury Alone Does Not Establish Joint and Several
      Contractual Liability or the “One Satisfaction” Settlement
      Credit.
      The Architect’s confusion continues into its indivisible injury argument.

There, the Architect again asserts judicial admission as substitute for a non-existent

fact. It urges RLJ judicially admitted the injury in this case was indivisible. (Cross-

Appellee’s 14). An injury is “indivisible” when, by its very nature, it cannot be

apportioned with reasonable certainty to the individual wrongdoers. Landers v. 248
S.W.2d at 734. Whether an injury is indivisible is a question of law that cannot be

established by admission. Boulet, 189 S.W.3d at 838.

      Legal injury cannot be conflated with damages. They are separate and

distinct. A legal injury consists of the invasion to a claimant’s legally protected

rights. Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 226-227 (Tex. App.—

Houston [14th Dist.] 2008, no pet.); Goggin v. Grimes, 969 S.W.2d 135, 137 (Tex.

                                          15
App.—Houston [14th Dist.] 1998, no pet.). For contract breaches, the legal injury

is failing or refusing to do something a party promised. Mays v. Pierce, 203
S.W.3d 564, 575 (Tex. App.—Houston [14th Dist.] 2006, pet. denied). By

definition, the “injury” in a contract case in which there is no joint or common

contractual duty and no joint liability is not “indivisible” as it is in tort cases.

       However, even assuming arguendo that the “injury” here could be treated as

“indivisible” sans a common contractual duty, that alone is not enough to establish

entitlement to a “one satisfaction” settlement credit. The settlement must have also

been for the same damages assessed against the non-settling defendant. Casteel, 22
S.W.3d at 391; CTTI, 164 S.W.3d at 675, n.3. The jury was not asked the amount

of damages resulting from breaches by all defendants – only those of the Architect.

(CR1127; App.B). The Architect points to the general release of all past and future

claims arising out of the Project to suggest overlapping damages (Cross-Appellee’s

3-4) even though the damages question was limited to those caused by the

Architect. (CR1127; App.B). As the Architect itself previously urged, joint liability

is based on the liability alleged, not the liability released. (Cross-Appellee’s 10-

13). Further, every prudent litigant will obtain a release of all claims that were or

could have been asserted. The scope of the release will always be broader than the

settlor’s alleged liability.

                                            16
      The Architect’s allocation argument is but an attempt to bolster its complaint

that the damages evidence was legally insufficient. (Appellant’s 36-57). The

Architect maintains the jury could not “allocate” damages unless a witness

particularly attributed to it a specific sum of damages it alone caused. (Cross-

Appellee’s 15). Among the reasons this argument is meritless (Appellees’

Amended 61-62), is that it requires a return to the now-rejected rule of Sun Oil Co.

v. Robicheaux, 23 S.W.2d 713, 715 (Tex. Comm. App. 1930)(judgment adopted),

barring recovery if the claimant failed to establish the damage caused by each

defendant. Ironically, the “one satisfaction” settlement credit the Architect sought

was created in response to the statute rectifying the very same “intolerable

burden.” (Cross-Appellants’ 21).

      If the Architect wanted a jury determination of an amount of damages that

included those caused by the Settling Defendants, it was obliged to properly

preserve that complaint. Any necessity for allocation of damages was not related to

the elements of RLJ’s recovery as the Architect suggests (Cross-Appellee’s 26),

but to the Architect’s post-verdict claim for a “one satisfaction” settlement credit.

The Architect did not assert that issue by affirmative pleading as required. (See n.

6, supra.; Cross-Appellants’ 57-58).

      It did not preserve for complaint any failure of the charge to obtain a finding

about whether damages overlapped. (Cross-Appellants’ 56-57). Such a finding was

                                         17
necessary to trigger any alleged duty to allocate. CTTI, 164 S.W.3d at 675, n.3. In

addition to having no joint contractual liability with any Settling Defendant, the

Architect failed to show that any settlement proceeds were for the injury or the

same damages as those assessed against the Architect. The Architect was,

therefore, not entitled to a “one satisfaction” settlement credit for these reasons.

     II.   “ONE SATISFACTION” SETTLEMENT CREDIT DOES NOT
              APPLY TO ANY CONTRACTUAL LIABILITY.
       The Architect also deserved no “one satisfaction” settlement credit because

it is not available for contractual liabilities. The credit is limited to cases of joint

tort liability. (Cross-Appellants’ 19-25). Yet, the Architect contends that there is an

overarching common law “one satisfaction” settlement credit available beyond that

created in response to article 2212. Actually, the common law generally allowed

neither joint and several liability nor claims for contribution. (Cross-Appellants’

20-21). Nevertheless, the Architect infers from pre-article 2212 cases containing

the phrase “one satisfaction” a pre-existing common law “one satisfaction”

settlement credit. (Cross-Appellee’s 6 n.2).

A.     Beware the Multiple Uses of “One Satisfaction.”
       Texas cases have used the phrase “one satisfaction” for at least three distinct

purposes: 1) limiting recovery to the judgment amount in later enforcement suits,

e.g., El Paso Nat. Gas v. Berryman, 858 S.W.2d 362, 364 (Tex.1993)(alleged alter

ego had no derivative liability if judgment against alleged principle fully paid);

                                          18
2) describing the election of remedies necessary for formulating the judgment

when damages for indivisible injury are awarded or recovered under multiple

recovery theories, Madison v. Williamson, 241 S.W.3d 145, 159 (Tex. App.—

Houston [1st Dist.] 2007, no pet.); and 3) describing the settlement credit created

in response to article 2212 to limit the amount of recoverable damages recoverable

when a potentially liable defendant settles its tort liability before judgment. Stewart

Title Guar. Co. v. Sterling, 822 S.W.2d 1, 5 (Tex.1991).

      The election-of-remedies “one satisfaction” bars recovery if plaintiff elects

to recover or has obtained judgment under a different theory of liability for the

same wrong, regardless of whether it would exceed the loss. See Fina Supply, Inc.

v. Abilene Nat’l Bank, 726 S.W.2d 537, 541 (Tex.1987); Horizon Offshore

Contractors, Inc. v. Aon Risk Servs. of Tex., Inc., 283 S.W.3d 53, 60 (Tex. App.—

Houston [14th Dist.] 2009, pet. denied); e.g., Kizer v. Meyer, Lytton, Allen &

Whitaker, Inc., 228 S.W.3d 384, 392, n.3 (Tex. App.—Austin 2007, no

pet.)(second action’s judgment might be barred by recovery in previous judgment).

The “one satisfaction” judgment rule does not concern the amount of damages that

can be awarded by a forthcoming judgment, only the amount recoverable from a

judgment debtor or those in privity under an existing judgment.

      This case involves neither of those rules. Instead, it involves the “one

satisfaction” settlement credit created in response to legislation overturning the

                                          19
common-law rule prohibiting contribution among tortfeasors. As the Texas

Supreme Court explained in Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 5

(Tex.1991),

      [The judgment debtor] alleges that it is entitled to an off-set from the
      settlement under the one satisfaction rule. This doctrine developed at
      common law from the interpretation and application of [article 2212,]
      the original contribution statute. This common law development was
      necessary, because the statute did not address the implications of a
      partial settlement on contribution.

(Emphasis added); see also Cross-Appellants’ 20-22.

      1.      There Was No “One Satisfaction” Settlement Credit
              Until After Article 2212 Was Enacted.
      Without acknowledging the different purposes for which courts use “one

satisfaction,” the Architect infers from pre-article 2212 cases containing that

expression that a common law settlement credit previously existed even if recovery

was for a non-tort liability. The Architect declares, “The Texas Supreme Court

began enforcing the one-satisfaction rule as early as 1856.” (Cross-Appellee’s 6).

While that is true for the “one satisfaction” of judgment rule and election-of-

remedies rule, it is untrue for the “one satisfaction settlement credit.”

      2.      The Cases Cited By The Architect Did Not Involve
              Settlement Credits.
      None of the three cases the Architect cites involved settlement, a settling

party, or reduction of a damage award. Lewis v. Taylor, 17 Tex. 57, 59 (1856)

involved the “one satisfaction” of judgment rule, holding that a judgment creditor

                                          20
was not entitled to recover more than the judgment amount in a suit against the

debtor’s bond surety. Alvord v. Waggoner, 88 Tex. 615, 32 S.W. 872, 873 (1895),

concerned the “one satisfaction” election of remedies when it observed that a

grantee could sue each of his successors in title for breach of the general warranty

deed, but “could have but one satisfaction of his damages.” The opinion in

Andrews v. Harvey, 39 Tex. 123 (1873), contains no reference whatever to any

“one satisfaction” rule. “One satisfaction” appears only in the summary of the

losing party’s argument, which preceded opinions in Texas Reports. See 1 Tex.

Preface. And that reference appears to be to the election-of-remedies “one

satisfaction.” None of these cases show a “one satisfaction” settlement credit

existed before article 2212.

      3.     Utts Does Not Suggest That the “One Satisfaction”
             Settlement Credit Existed at Common Law Before
             Article 2212.
      From the fallacious premise that settlement contributions under the one-

satisfaction rule antedated article 2212, the Architect urges that in Utts v. Short, 81
S.W.3d 822, 831-32 (Tex.2002), “[t]he [Texas] Supreme Court explained that

Texas’ statutory contribution scheme upholds the broader one-satisfaction rule

rather than supersedes the common law one-satisfaction rule.” There are numerous

erroneous assumptions underlying this suggestion.

                                          21
      Creating a specific settlement credit in response to article 2212 would have

been unnecessary if a common-law “one satisfaction” settlement credit already

existed. Further, the cited passage from Utts was only the opinion of Justice Baker,

not a majority of the court. Id. at 824. Finally, Utts involved a tort claim governed

by the Chapter 33 contribution statute. It presented no question whether Chapter 33

supplanted a pre-existing common-law settlement credit other than the “one

satisfaction” settlement credit created in response to article 2212, which only

applied to tort cases. Id. at 825.

B.    This and Other Texas Courts Have Refused to Apply “One
      Satisfaction” Settlement Credits to Contractual Liability.
      To bolster its contention that “one satisfaction” settlement credits apply to

contractual liabilities, the Architect sweepingly but incorrectly declares “neither

this Court nor any other appellate jurisdiction in Texas holds that the one-

satisfaction rule is limited by the particular cause of action asserted.” (Cross-

Appellee’s 7).

      In CTTI Priesmeyer, Inc. v. K & O Ltd. Partnership, 164 S.W.3d 675, 683-

84 (Tex. App.—Austin 2005, no pet.), this Court noted that the Dallas appellate

court in Hunt v. Ellisor & Tanner, 739 S.W.2d 933, 938 (Tex. App.—Dallas 1987,

writ denied), ruled a breach of contract claim does not support comparative

causation. The Architect attempts to distinguish Hunt by urging “that it did not

involve any allegations of joint liability and indivisible damages….” (Cross-

                                         22
Appellees’ 18). If Hunt meant the one satisfaction rule applies to contractual

liabilities, then it nevertheless requires joint and several liability. Either way, Hunt

supports RLJ’s contention that the trial court erroneously gave the Architect credit

for the sums paid by the Settling Defendants either because the “one satisfaction”

settlement credit does not apply to contractual liability at all or does not apply if

the potential contractual liability is not joint.

       Even more to the point, CTTI discussed Stewart Title Guar. Co. v. Sterling,

822 S.W.2d 1 (Tex.1991), First Title Co. of Waco v. Garrett, 860 S.W.2d 74

(Tex.1993), and Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex.2000) – the

post-Hunt Texas Supreme Court cases analyzing the availability of settlement

credits under the one satisfaction rule. CTTI observed that in each of those cases

the liable and settling defendants were joint tortfeasors. It pointed out that the

Texas Supreme Court had observed in Casteel:

       Under the one satisfaction rule, the nonsettling defendant may only
       claim a credit based on the damages for which all tortfeasors are
       jointly liable.... [T]he nonsettling defendant is entitled to offset any
       liability for joint and several damages by the amount of common
       damages paid by the settling defendant, but not for any amount of
       separate or punitive damages paid by the settling defendant.

CTTI, 164 S.W.3d at 684 (quoting Casteel, 22 S.W.3d at 391-92; emphasis added).

       Without explanation, the Architect nevertheless declares CTTI’s “holding

itself acknowledges and allows for the application [of one satisfaction settlement

credits] to breach of contract claims.” (Cross-Appellee’s 12, n. 4). In reality, CTTI

                                            23
“conclude[d] that the one satisfaction rule applies only to tort claims, not to breach

of contract claims.” Id. (emphasis added). This Court could not have been more

clear.

         CTTI is not an isolated example. CBI NA-CON, Inc. v. UOP, Inc., 961
S.W.2d 336, 339 (Tex. App.—Houston [1st Dist.] 1997, pet. denied), also

categorically ruled “[c]ontribution is allowed in Texas only among joint

tortfeasors.” Id. at 33910; accord, Marshall, 288 S.W.3d at 456 (“A nonsettling

defendant may only successfully urge the one satisfaction rule when there are joint

tortfeasors”). CBI explained “the only way [C]hapter 33 could apply is if [the

plaintiff] had a negligence claim, breach of warranty claim … or a strict products

liability claim” because “[a] breach of contract claim is not a basis for contribution

under Chapter 33.” Id. at 339, 341. Bartley v. Guillot, 990 S.W.2d 481, 484 (Tex.

App.—Houston [1st Dist.] 1999, pet. denied), also disallowed a “one satisfaction”

settlement credit because “any set-off [the liable defendant] may be entitled to

receive must come from another tortfeasor, not … a party merely involved by

contract.” Id. These decisions further illustrate that “one satisfaction” settlement

credits apply only to joint tort, not contractual, liabilities.

10
   Despite the assertion of a general right of contribution for all the claims asserted
against UOP, the court deemed it necessary only to consider Chapter 33. It could not
have based its disposition on Chapter 33 alone if there were a common-law contribution
right. Thus, CBI also rebuts the Architect’s contentions that joint and several liability is
not required and that there is an overarching common-law contribution right beyond
Chapters 32 and 33.

                                            24
C.     CTTI Is Still Valid.
       Without acknowledging or considering origin or purpose of the “one

satisfaction” settlement credit, the Architect assails generally the notion it only

applies to tort liability and attacks in particular the continuing vitality of CTTI

based on four later decisions by this Court. (Cross-Appellee’s 12, n.4).

       1.     No Later Decision Expressly Limits or Overturns CTTI.
       Two of these opinions make no mention of CTTI whatever. Kizer v. Meyer,

Lytton, Alen & Whitaker, Inc., 228 S.W.3d 384, 392 n.3 (Tex. App. – Austin 2007,

no pet.); Metal Bldg. Components, LP v. Raley, No. 03-05-00823, 2007 WL 74316

(Tex. App.—Austin Jan. 10, 2007, no pet.). Galle, Inc. v. Pool, 262 S.W.3d 564,

573-74 (Tex. App.—Austin 2008, pet. denied), and Osborne v. Jauregui, Inc., 252
S.W.3d 70, 75 (Tex. App.—Austin 2008, pet. denied)(en banc), cite CTTI, but not

concerning whether the “one satisfaction” settlement credit applies to contractual

liability. Neither Pool nor Osborne discuss CTTI’s explanation why the “one

satisfaction” settlement credit was created or analyzes why that reason and the

Texas Supreme Court authorities on which CTTI relied meant the credit was

limited to joint tort liability.

       Using the identical language, Pool and Osborne cite general boilerplate

originating in election-of-remedies cases, Madison, 241 S.W.3d at 159, that the

“one satisfaction” rule applies regardless of theory of recovery when multiple

                                         25
defendants commit the same or “technically” different acts resulting in the same

injury. Pool, 262 S.W.3d at 573; Osborne, 252 S.W.3d at 75. Both Pool and

Osborne cite Stewart, Sterling, Garrett, and Casteel – tort cases that had no reason

to address non-tort liability. Nothing in Pool or Osborne reflects an actual

awareness that CTTI disallowed “one satisfaction” settlement credits for

contractual liabilities. Neither opinion suggests conscious or overt rejection of

CTTI’s holding.

       Pool and Osborne relied on AMX Enters., Inc. v. Bank One, N.A., 196
S.W.3d 202, 206 (Tex. App.—Houston [1st Dist.] 2006, pet. denied), for the

proposition that “[t]he application of the rule is not limited to tort claims and …

depends not on the cause of action asserted but rather the injury sustained.” AMX

relied on Sterling as support:

       There can be but one recovery for one injury, and the fact that more
       than one defendant may have caused the injury or that there may be
       more than one theory of liability, does not modify this rule.
822 S.W.2d at 8. AMX ignored that Sterling was a tort case applying article 2212,

the original contribution statute, id. at 5, and involved no potential contractual

liability.

       2.    Stare Decisis and En Banc Standards Make Sub Silentio
             Overruling of CTTI Both Unthinkable and Unlikely.
       Conscious, but surreptitious, overruling of CTTI would have been

irreconcilable with respect for stare decisis, see Austin Home Ctr. Associates v.

                                        26
State, 794 S.W.2d 593, 595 (Tex. App.—Austin 1990, no writ), and the established

practice of explicit, en banc resolution of conflicting opinions. O’Connor v. First

Court of Appeals, 837 S.W.2d 94, 96 (Tex.1992); see also Tex. R. App. P. 41.2(c).

It is inconceivable this Court would treat CTTI in the cavalier manner the Architect

suggests had it been concerned in Pool or Osborne about conflict with CTTI. It

would not have left its resolution to the soothsaying of litigants.

      3.     Pool May Potentially Conflict with CTTI, But Does Not
             Overrule It.
      No later decisions suggests this Court overruled CTTI. Kizer, 228 S.W.3d at

392 n.3, involved successive suits against a single defendant, not a “one

satisfaction” settlement credit. Without mentioning CTTI, the Court observed

hypothetically that “potential recovery on [a later] breach of contract claim …

might well be barred by [a previous recovery under] the one satisfaction rule which

prohibits more than one recovery for a given harm.” Id. Kizer did not address

whether a “one satisfaction” settlement credit applied to contractual liability.

      In Raley, the plaintiff sued in tort to enforce a previous judgment imposing a

contract against alleged alter egos of, and recipients of alleged fraudulent property

transfers from, the original judgment debtor. 2007 WL 74316 at *3, 13. In response

to the plaintiff’s misunderstanding about the nature of the liability in the

enforcement suit, Id. at *18, Justice Patterson stated in dicta that credit under

“[t]he one satisfaction rule is consistent with principles of contract law, which

                                          27
preclude a non-breaching party from recovering damages … that would put [it] in a

better position than it would have been had the contract been fully performed.” Id.

at 19, n. 22. The court did not and could not rule the liable defendant was entitled

to a “one satisfaction” settlement credit for contract liability because the liability in

the case before the court was based on a tort.

      As already discussed, Osborne simply recited the standard “boilerplate”

from cases that imported the election-of-remedies “one satisfaction” rule, see

II.C.1, supra., and mingled it with the observation in tort cases that the “one

satisfaction” settlement credit was available because of the nature of the injury, not

the cause of action. It neither expressly nor implicitly overruled CTTI.

      Pool, on the other hand, at least superficially conflicts with CTTI because it

applied the “one satisfaction” settlement credit to dispose of an alternative

contractual liability theory. 262 S.W.3d at 574. Regardless of whether doing so

was necessary, the Pool opinion did not overtly consider 1) the original need for

the “one satisfaction” settlement credit; 2) the “rule” about application regardless

of theory of recovery is properly limited to election-of-remedy, not settlement

credit, cases; or 3) the first case expanding “one satisfaction” settlement credits

beyond tort cases relied on Berryman – an election-of-remedies case. (Cross-

Appellants’ 49-50).

                                           28
       Even if a conflict existed between CTTI and Pool, CTTI controls. CTTI

expressly considered and independently analyzed whether the “one satisfaction”

settlement credit applied in contract cases. The opinion in Pool did not.

Presumably, the parties in Pool did not alert the court that cases holding the “one

satisfaction” rule applied regardless of liability theory were election-of-remedies,

not settlement credit, cases.

       4.    Conflicts With Other Cases.
       RLJ acknowledged that there are cases saying the “one satisfaction”

settlement credit applies to more than tort cases. (Cross-Appellants’ 48). Two such

cases cited by the Architect – Oyster Creek Fin. Corp. v. Richwood Investments II,

Inc., 176 S.W.3d 307, 328 (Tex. App.—Houston [1st Dist.] 2004, pet. denied), and

Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 70, (Tex. App.—Texarkana 2004,

pet. denied) – this Court expressly declined to follow because they “have not

discussed the requirement of joint liability.” CTTI, 164 S.W.3d at 685. The

Architect’s cited decisions (Cross-Appellee’s 7-8, 22) make no attempt to reconcile

observations about allowing credits for a non-tort liability with the reasons why the

“one satisfaction” settlement credit was created 11 – reasons that only existed in tort

cases. 12

11
  Cunningham v. Haroona, 382 S.W.3d 492 (Tex. App.—Fort Worth 2012, pet. denied),
involved a medical malpractice wrongful death claim, so there was no reason to consider
whether the “one satisfaction” settlement credit applied to breach-of-contract liability.

                                           29
D.     Extension of “One Satisfaction” Settlement Credit to
       Contractual Liability Prohibited by Texas Constitution
       Article I, Section 16.
       Texas strongly favors parties’ freedom of contract. Gym-N-I Playgrounds,

Inc. v. Snider, 220 S.W.3d 905, 912 (Tex.2007). Generally, parties are entitled to

consensually allocate risks and rewards by contract as they wish so long as there is

no public policy violation. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129

& n. 11 (Tex.2004). It is difficult to imagine a greater infringement than

involuntarily transferring a party’s contract rights to benefit a wrongdoer who was

not a party to that agreement. Yet, the Architect argues Texas’s constitutionally

guaranteed contractual freedom only applies to statutory restrictions. The Texas

Supreme Court perceived no such limitation when it considered this right

paramount to a court-recognized public policy against insuring exemplary

AMX, like Berryman, involved no “settlement” but was a case about what derivative
liability remained when a jointly liable party paid part of the alleged debt. In Regions
Bank v. Bay, No. 05–12–00531–CV, 2013 WL 5299174 at *4 (Tex. App.—Dallas Sept.
18, 2010, no pet.)(mem. op.), the plaintiff conceded the settlement was for the same loss
and the opinion did not discuss applicability to contract liability. Emerson Elec. Co. v.
Am. Permanent Ware Co., 201 S.W.3d 301, 314 (Tex. App.—Dallas 2006, no pet.),
involved an uncritical application of misguided language from Oyster Creek to support
application of the “one satisfaction” settlement credit to a breach of contract case.
12
   Matthew v. Sohn, 13-12-00302-CV, 2013 WL 2949562 (Tex. App.—Corpus Christi
2013, no pet.)(mem. op.), involved whether the non-settling defendant was entitled to a
credit against DTPA liability from a settlement with a defendant sued for alleged tort
liability. The court ruled it was solely because of an indivisible injury. Id. at *5. It did not
consider application to contract liability.

                                              30
damages. Fairfield Ins. Co. v. Stephens Martin Paving LP, 246 S.W.3d 653, 664

(Tex.2004).

      Restricting the guarantee to statutes is based on the federal parallel, Storrie

v. Cortes, 90 Tex. 283, 287, 38 S.W. 154, 156 (1896), because, being located in

Article I, it only limited legislative power. The Texas freedom-of-contract

provision is contained in the Bill of Rights and limits the power of state

government generally. “No … law impairing the obligations of contract shall be

made” by any branch, not just the Legislature. Tex. Const. art. I, §16.

      The Architect also argues that art. I, §16 does not apply because a “one

satisfaction” settlement credit is not a retroactive law. It reasons “the rule was in

existence long before any contract at issue.” (Cross-Appellee’s 25). This argument

begs the question this case presents: does any such rule apply to breach of contract

claims? In light of the cases holding it does not, see II.B., supra., it can hardly be

deemed an “undisputed” rule whose existence was certain. It cannot be deemed

part of the settling parties’ agreement. If it were, it would operate retroactively and

unconstitutionally.

                               III.   CONCLUSION
      For the foregoing reasons and those stated in RLJ’s previously-filed briefs,

the court should grant the relief RLJ has requested therein and all other relief to

which RLJ may be justly entitled.

                                          31
     Respectfully submitted,

     MUNSCH HARDT KOPF & HARR PC

     /s/Michael W. Huddleston
     Michael W. Huddleston
     State Bar No. 10148415
     J. Stephen Gibson
     State Bar No. 07866000
     3800 Ross Tower
     500 North Akard Street
     Dallas, TX 75201
     (214) 855-7500 Main Tel.
     (214) 855-7584 Main Fax
     mhuddleston@munsch.com
     sgibson@munsch.com

     Benton T. Wheatley
     State Bar No. 24015171
     Tracy McCreight
     State Bar No. 24037064
     Munsch Hardt Kopf & Harr, P.C.
     401 Congress Avenue, Suite 3050
     Austin, TX 78701
     (512) 391-6100 Main Tel.
     (512) 391-6149 Main Fax
     bwheatley@munsch.com
     tmccreight@munsch.com

     Attorneys For Appellees and
     Cross-Appellants.

32
                      CERTIFICATE OF COMPLIANCE
      I hereby certify that this Appellees’ Brief was prepared using Microsoft

Word 2010, which indicated that the total word count (exclusive of those items

listed in Tex. R. App. P. 9.4(i)(1)) is 7479 words.

                                              /s/ Michael W. Huddleston
                                              Michael W. Huddleston

                         CERTIFICATE OF SERVICE
      I certify that I served a true and correct copy of the foregoing document

upon counsel listed below on this 16th day of July, 2015 by e-file:

Weston M. Davis
Gregory N. Ziegler
Steven R. Baggett
Macdonald Devin, P.C.
1201 Elm Street
3800 Renaissance Tower
Dallas, TX 75270

                                              /s/ Michael W. Huddleston
                                              Michael W. Huddleston

                                         33