Asking for Punishment: Do Defendants Have to Plead a Punitive Damage Cap Limit?
June 3, 2015
When it comes to punitive damages, the Lone Star State is of two minds. Preparing to decide a split among Texas appellate courts, the Texas Supreme Court is set to rule on Zorrilla v. Aypco Construction II, LLC, et al. The question at hand is whether a party must affirmatively plead punitive damage cap limits as part of its affirmative defenses.
Texas Rule of Civil Procedure 94 requires a defendant to plead any matter constituting “an avoidance or affirmative defense.” Affirmative defenses refute a plaintiff’s legal allegations and/or theories of recovery, and thus, a defendant bears the responsibility to plead, and provide factual evidence in support of, such affirmative defenses. Rule 94 interacts with the punitive damage caps under the Texas Civil Practice and Remedies Code.
Texas Civil Practice and Remedies Code § 41.008 provides a legislative cap on the amount of punitive damages that a claimant may recover. Punitive damages, by design, “punish” a defendant for their wrongful conduct. The legislature has enacted limitations on such punishment that limit the recoverable punitive damages against a party. The statute does not require a defendant to “prove” anything as part of enforcing their rights under its provisions, and the statute’s language expressly prohibits disclosure of its limitations to a jury.
The Houston, San Antonio and Amarillo appellate courts have held that because a defendant has nothing to prove under § 41.008, that there is nothing to plead as part of a party’s affirmative defenses. These courts of appeals agree that, similar to a criminal defendant that does not have to prove a “statutory cap on imprisonment,” a civil defendant need not prove the statutory cap on punitive damages recoverable against them.
In contrast, the Corpus Christi and Fort Worth appellate courts have held that the maximum amount of recoverable punitive damages must be plead, relying on prior statutes that limited damages and, at the same time, required factual support to invoke the liability-limiting provisions of such statutes. These courts found proof was required and must be pled.
The decision in Zorrilla v. Aypco Construction II, LLC, et al. could affect the way practitioners handle punitive damage claims. If the Supreme Court sides with the Corpus Christi and Fort Worth appellate courts, litigators would have to affirmatively plead § 41.008 as an affirmative defense in their client’s pleading, in every case.
Pending resolution of the decision, a prudent and cautious approach would be err on the side of caution and plead liability limitations until the Texas Supreme Court provides clarity on the split between appellate courts.