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Transp. Ins. Co. v. Moriel

Supreme Court of Texas

June 8, 1994, Delivered

No. D-1507

Opinion

 [*12]  JUSTICE CORNYN delivered the opinion of the Court, in which CHIEF JUSTICE PHILLIPS, JUSTICE GONZALEZ, JUSTICE HIGHTOWER, JUSTICE HECHT, JUSTICE ENOCH and JUSTICE SPECTOR join.

Respondent's Motion for Rehearing is overruled. We withdraw our prior opinion and substitute the following in its place.

This case requires us to clarify the standards governing the imposition of punitive damages in the context of bad faith insurance litigation. The parties have asked [**2]  us to address three issues. First, in a bad faith case, how should Texas courts apply the definition of gross negligence from Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex. 1981), to determine whether punitive damages are appropriate? Second, what constitutes legally sufficient evidence of gross negligence to support an award of punitive damages? Third, what limits do the Due Process clause of the Fourteenth Amendment to the United States Constitution and the Due Course clause of the Texas Constitution, TEX. CONST. art. 1, § 19, place on punitive damages? 1 We hold  [*13]  that Juan Moriel did not present legally sufficient evidence of gross negligence. Therefore, Moriel is not entitled to punitive damages. It necessarily follows that the constitutional issues -- whether the size of the punitive damages award or the procedures the trial court followed violated Transportation's due process rights -- are questions that must await another day. City of San Antonio v. Schautteet, 706 S.W.2d 103, 105 (Tex. 1986) (per curiam) (explaining that constitutional challenges should not be addressed when a case may be decided on nonconstitutional grounds). Because the court has not [**3]  previously addressed punitive damages in the bad faith context, and because this opinion represents a substantial clarification of the gross negligence standard that will apply in all cases, we remand this case for a new trial in the interest of justice.

 [**4]  I

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879 S.W.2d 10 *; 1994 Tex. LEXIS 90 **; 37 Tex. Sup. J. 883

TRANSPORTATION INSURANCE COMPANY, PETITIONER v. JUAN CARLOS MORIEL, RESPONDENT

Prior History:   [**1]   ON APPLICATION FOR WRIT OF ERROR TO THE COURT OF APPEALS FOR THE EIGHTH DISTRICT OF TEXAS.

This Opinion Substituted on Overrule of Rehearing for Withdrawn Opinion of February 2, 1994, Previously Reported at: 1994 Tex. LEXIS 23.

CORE TERMS

punitive damages, gross negligence, bad faith, insurer, damages, cases, award of punitive damages, trial court, tests, conscious indifference, coverage, courts, circumstances, court of appeals, no evidence, exemplary damages, mental state, bifurcation, articulate, compensatory damages, deterrence, common law, deter, legally sufficient, actual damage, punish, rights, breach of contract, act or omission, degree of risk

Civil Procedure, Remedies, Damages, Punitive Damages, Torts, Types of Damages, Compensatory Damages, General Overview, Punitive Damages, Aggravating Circumstances, Criminal Law & Procedure, Sentencing, Imposition of Sentence, Factors, Tax Law, Compensation & Welfare Benefits, Disability Payments, Injuries & Sickness, Taxation, Availability, Governmental Entities, Contracts Law, Breach, Measurement of Damages, Foreseeable Damages, Benefit of the Bargain, Insurance Law, Liability & Performance Standards, Bad Faith & Extracontractual Liability, Consequential Damages, Penalties, Evil & Malicious Intent, Business Torts, Bad Faith Breach of Contract, Remedies, Pain & Suffering, Emotional Distress, Contract Interpretation, Good Faith & Fair Dealing, Good Faith & Fair Dealing, Claim, Contract & Practice Issues, Policy Interpretation, Payment Delays & Denials, Compensatory Damages, Negligence, Gross Negligence, Crimes Against Persons, Endangerment, Criminal Offenses, Classification of Offenses, Infractions & Minor Offenses, Acts & Mental States, Mens Rea, Negligence, Recklessness, Real Property Law, Torts, Standards of Care, Reasonable Care, Reasonable Person, Standards of Review, Substantial Evidence, Healthcare Law, Health Insurance, Reimbursement, Workers' Compensation & SSDI, Administrative Proceedings, Judicial Review, Trials, Separate Trials, Appeals, Clearly Erroneous Review, Relief From Judgments, Additur & Remittitur, Remittiturs, Determinative Factors, Judicial Review, Jury Trials, Jury Instructions