Exemplary Damages: Fun With Unanimity

Texas Civil Practice and Remedies Code section 41.003(d) states that "[e]xemplary damages may be awarded only if the jury was unanimous in regard to finding liability for and the amount of exemplary damages." Rules adopted by the Supreme Court confirm that unanimity for liability must also extend to the underlying liability theory. And a recent case addresses preservation of arguments about the unanimity requirement.

Although section 41.003(d) seems fairly straight-forward, it is not as clear as it could be about the meaning of "unanimous in regard to finding liability for" exemplary damages. Texas Rule of Civil Procedure 226a, adopted by the Supreme Court of Texas, interprets section 41.003(d) to mean unanimity for both the underlying tort theory and the liability for exemplary damages. Tex. R. Civ. P. 226a.

In a recent case addressing the issue, eleven members of the jury found for the plaintiff on the underlying liability theory. Cullum v. White, No. 04-09-00695-CV, 2011 WL 6202800, at *11 (Tex. App.—San Antonio Dec. 14, 2011, no pet. h.). But the jury unanimously answered "yes" to the exemplary damages liability quiestion and unanimously awarded an amount of exemplary damages. 2011 WL 6202800 at *3. The trial court awarded exemplary damages in the judgment. Id. at *14.

On appeal, the plaintiff argued that the defendant waived any error on the unanimity issue because the defendant did not object to the lack of a unanimous verdict before the jury was discharged. Id. at *11. The court of appeals rejected this argument because there was no "error" in the jury's verdict that needed to be cured before the jury was discharged. Id. The court held that the defendant preserved error by pointing out the lack of unanimity in his motion for judgment n.o.v. Id. Relying on Rule 226a, the court then held that the lack of unanimity on liability for the underlying tort required reversal of the judgment for exemplary damages. Id.

The Cullum opinion is not clear about whether the jury was instructed not to answer the exemplary damages liability question unless they were unanimous on the underlying tort theory. Even if the jury was so instructed and disregarded the instruction, the court of appeals treated the answers to the exemplary damages questions as immaterial because the jury was not unanimous on the underlying claim. The key takeaway is therefore to ensure that the jury is charged in accordance with Rule 226a that they should not answer the exemplary damages questions unless they are unanimous in finding liabiility on the underlying claims. And it appears that issues about the application of the unanimity requirement do not have to be raised before the jury is discharged. They may be properly raised in the motion for judgment n.o.v.

-- Rich Phillips, Thompson & Knight