Court Opinion

ID: 2836244
Source: CourtListenerOpinion
Date Created: 2015-09-02 20:42:07.037558+00
Date Added: 2024-06-11T15:11:32.027151
License: Public Domain

Opinion issued June 5, 2003

 

In The
Court of Appeals
For The
First District of Texas
 

 
 
NO. 01-02-00346-CV
____________
 
MELISSA SMITH, INDIVIDUALLY AND AS NEXT FRIEND OF
WILLIAM LEE SMITH, EDWARD DANIEL SMITH, AND JEDIDIAH
KEITH SMITH, MINORS, AND ON BEHALF OF THE ESTATE OF
DANNY SMITH, DECEASED; LINDA SMITH, INDIVIDUALLY AND ON
BEHALF OF THE ESTATE OF DANNY SMITH, DECEASED; CHRISTY
SMITH DANNA, INDIVIDUALLY AND ON BEHALF OF THE ESTATE
OF DANNY SMITH, DECEASED; BOBBY SMITH, INDIVIDUALLY AND
ON BEHALF OF THE ESTATE OF DANNY SMITH, DECEASED; AND
WILLIAM PRESTON SMITH, INDIVIDUALLY AND ON BEHALF OF
THE ESTATE OF DANNY SMITH, DECEASED, AND AS NEXT FRIEND
OF CELBY SMITH, CADE SMITH, AND CODY SMITH, Appellants

v.

CUDD PRESSURE CONTROL INC., Appellee

On Appeal from the 295th District Court
Harris County, Texas
Trial Court Cause No. 99-03588
 

 
 
O P I N I O N
          Appellants, Melissa Smith, individually and as next friend of William Lee
Smith, Edward Daniel Smith, and Jedidiah Keith Smith, minors, and on behalf of the
estate of Danny Smith, deceased; Linda Smith, individually and on behalf of the
estate of Danny Smith, deceased; Christy Smith Danna, individually and on behalf of
the estate of Danny Smith, deceased;  Bobby Smith, individually and on behalf of the
estate of Danny Smith, deceased; and William Preston Smith, individually and on
behalf of the estate of Danny Smith, deceased, and as next friend of Celby Smith,
Cade Smith, and Cody Smith (collectively, the Smiths), challenge a take-nothing
judgment rendered in favor of appellee, Cudd Pressure Control, Inc. (Cudd), on the
Smiths’ claims for negligence and products liability brought against Cudd arising
from a fatal gas well explosion.
          A jury returned a verdict in favor of the Smiths and awarded actual damages
of approximately $14.7 million.  Based on its application of Texas’s dollar-for-dollar
settlement credit statute,
 the trial court entered a take-nothing judgment against the
Smiths. In their sole issue,
 the Smiths contend that, following the verdict, the trial
court erred in applying Texas’s dollar-for-dollar settlement credit, instead of
Louisiana’s proportionate settlement credit, to reduce the amount of damages
awarded by the jury.  We affirm.
Factual and Procedural Background
          This lawsuit arises from a 1998 gas well explosion in which Danny Smith was
fatally injured.  Sonat Exploration Company (Sonat) hired Cudd, a snubbing
contractor, to provide labor and equipment necessary to complete a gas well located
in Louisiana. On October 24, 1998, while Cudd’s crew was attempting to insert a
piece of down-hole equipment, known as a “packer,” into the well, the explosion
occurred.  The packer, manufactured by Halliburton Energy Services, Inc.
(Halliburton), failed due to a weak connection.  The explosion killed four members
of the Cudd crew and three members of a crew employed by Key Energy Services
(Key).  Danny Smith was a member of the Key crew, and died as a result of the
injuries he sustained in the explosion.
          The Smiths initially filed suit against Cudd, Sonat, and Halliburton in Harris
County, Texas, but then non-suited the Texas case and filed suit in the Parish of
Orleans, Louisiana.  The Smiths then dismissed their Louisiana action and filed suit
against Cudd and Sonat a second time in Harris County, Texas.  All of the Smiths
settled with Sonat for a total of $63,800,000.  
          Cudd filed a motion in the trial court to apply Louisiana law to the case, which
was contested by the Smiths.  The Smiths argued that “the number and importance of
the Texas contacts in this case mandates the application of Texas law” and that Cudd
“failed to produce evidence showing any conflict between Louisiana and Texas law.” 
The Smiths also argued that the only issue that may have required a conflicts of law
analysis by the trial court was the issue of punitive damages, which the Smiths argued
should be determined using Texas law.  Cudd withdrew its motion to apply Louisiana
law and agreed to the application of Texas law as it related to the Smiths’ claims.  
          Trial commenced on September 11, 2001, with the trial court applying and
following Texas law.  Before the trial court submitted the case to the jury, Cudd filed
a written election to receive a dollar-for-dollar settlement credit.  See Tex. Civ. Prac.
& Rem. Code Ann. § 33.014 (Vernon 1997).  On October 4, 2001, the jury found
Cudd liable for negligence and returned a verdict of $14,741,783.36 in actual
damages.  The jury further found 45 percent of the causation attributable to Cudd, 20
percent to Halliburton, and 35 percent to Sonat.  See Tex. Civ. Prac. & Rem. Code
Ann. § 33.003 (Vernon 1997). 
          After the jury’s verdict, Cudd moved for final judgment, asking that the Smiths
take nothing and that all costs be assessed against the Smiths.  The Smiths challenged
Cudd’s motion for final judgment, and requested that the trial court take judicial
notice of and apply Louisiana’s proportionate settlement credit and assess costs
against Cudd.  On December 17, 2001, the trial court signed a final judgment ordering
that the Smiths take nothing and assessing costs against Cudd.
Settlement Credit
          In support of their argument that Louisiana’s proportionate settlement credit
should be applied in this case, the Smiths contend that a conflict of laws analysis is
required and that Louisiana is the state with the “most significant relationship” to the
settlement credit issue.  See Gutierrez v. Collins, 583 S.W.2d 312, 319 (Tex. 1979)
(holding, absent statutory directive, all conflicts cases sounding in tort governed by
“most significant relationship” test enunciated in sections 6 and 145 of Restatement
(Second) of Conflicts). 
          However, Chapter 33 of the Civil Practice and Remedies Code expressly
governs the settlement credit issue in this case.  Drilex Systems, Inc. v. Flores, 1
S.W.2d 112, 121 (Tex. 1999).  Chapter 33 applies to “any cause of action based on
tort in which a defendant, settling person, or responsible third party is found
responsible for a percentage of the harm for which relief is sought.”  Tex. Civ. Prac.
& Rem. Code Ann. § 33.002(a) (Vernon 1997).  
          Section 33.012 requires that the trial court reduce a judgment according to one
of two methods—a dollar-for-dollar credit or a sliding scale—elected by the
defendant, as follows:
If the claimant has settled with one or more persons, the court shall
further reduce the amount of damages to be recovered by the claimant
with respect to a cause of action by a credit equal to one of the
following, as elected in accordance with Section 33.014:
 
(1)the sum of the dollar amounts of all settlements;  or
 
(2)a dollar amount equal to the sum of the following              
percentages of damages found by the trier of fact:
 
(A)5 percent of those damages up to $200,000;
 
(B)10 percent of those damages from $200,001 to
$400,000;
 
(C)15 percent of those damages from $400,001 to        
 $500,000;
 
(D)20 percent of those damages greater than $500,000.

Id. § 33.012(b) (emphasis added).  Thus, section 33.012 requires a trial court to
reduce damages when there is a settlement covering some or all of the damages
awarded in the judgment.
          The only question is by what amount the trial court should reduce the damages. 
Section 33.014 provides as follows:
If a claimant has settled with one or more persons, an election must be
made as to which dollar credit is to be applied under Section 33.012(b). 
This election shall be made by any defendant filing a written election
before the issues of the action are submitted to the trier of fact and, when
made, shall be binding on all defendants.  If no defendant makes this
election or if conflicting elections are made, all defendants are
considered to have elected Subdivision (2) of Section 33.012(b).
Id. § 33.014.  A defendant must file an election for a dollar-for-dollar settlement
credit before the case is submitted to the jury.  Mobil Oil Corp. v. Ellender, 968
S.W.2d 917, 927 (Tex. 1998).  The burden is upon such a defendant seeking a
settlement credit to prove the settlement credit amount by placing the settlement
agreement or some evidence of the settlement agreement into the record.  Id.
          Here, Cudd properly followed the statutory requirements to establish a dollar-for-dollar settlement credit.  The record reflects that Cudd filed a written
dollar-for-dollar credit election before the case was submitted to the jury.  Cudd’s
written election set forth evidence of the dollar amounts of all settlements entered into
by the Smiths, as established by the Smiths’ responses to requests for admissions. 
Thus, the trial court was required, under Chapter 33, to reduce the amount of the
Smiths’ damages dollar-for-dollar.  Tex. Civ. Prac. & Rem. Code Ann. § 32.012(b). 
          The Smiths contend, however, that “Cudd presented its motion requesting a
Texas credit after the jury returned its verdict.”  The Smiths assert that the holding in
Utts v. Short, 81 S.W.3d 822 (Tex. 2002), provides a party with an opportunity, at this
point, “to show why the Texas credit should not apply” after the jury has returned its
verdict.  However, the Smiths misconstrue Utts, which concerns cases involving facts
suggesting that a nonsettling plaintiff may have “benefited from a settling plaintiff’s
settlement proceeds.”  Id. at 825.  The Texas Supreme Court in Utts provided a
nonsettling defendant with a remedy for such a “sham” and reaffirmed the written
election requirement of section 33.014.  Id. at 829. 
          The Smiths’ claim also falls under the “One Satisfaction Rule,” which was
designed to prevent a windfall to plaintiffs, and dictates that when a plaintiff files a
suit against multiple defendants for a single injury, any settlements will be credited
against the amount for which non-settling defendants are found liable.  First Title of
Waco v. Garrett, 860 S.W.2d 74, 78 (Tex. 1993).  The rationale for this doctrine is
that a plaintiff should not receive 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.  Id.
                                                         Conclusion
          Appellants ask this Court for a piecemeal application of Chapter 33, in which
they would keep the comparative causation findings of the jury, made under
Subchapter A, entitled “Proportionate Responsibility,” but exclude the application of
a settlement credit made under Subchapter B, entitled “Contribution.”  Only after the
jury had returned its verdict did the Smiths request that the trial court take judicial
notice of and apply Louisiana’s proportionate settlement credit.  
          A conflict of laws analysis regarding Louisiana’s proportionate settlement
credit is improper because Chapter 33 of the Civil Practice and Remedies Code
expressly applies to “any cause of action based on tort in which a defendant, settling
person, or responsible third party is found responsible for a percentage of the harm
for which relief is sought.”  Tex. Civ. Prac. & Rem. Code Ann. § 33.002(a).  After
the jury found Cudd liable for negligence and assessed its proportionate responsibility
under Chapter 33, the trial court was required, pursuant to Cudd’s written election,
to apply a dollar-for-dollar settlement credit to reduce the amount of damages
awarded to the Smiths.  Accordingly, we hold that the trial court did not err in
applying Texas’s dollar-for-dollar settlement credit, and we overrule the Smiths’ sole
issue.  
          We affirm the judgment of the trial court.
 
 
                                                                        Terry Jennings
                                                                        Justice

Panel consists of Justices Taft, Jennings, and Hanks.