THE BIG COURT IN AUSTIN DECIDES BIG ISSUES OF DAMAGES CAPS, PREMISES LIABILITY, AND BILLS OF REVIEW

On Friday, June 12, the Supreme Court of Texas issued nine opinions. Three of them announced or clarified fundamental principles of fairly broad application.

Zorrilla v. Aypco Construction II, LLC
Supreme Court of Texas, No. 14-0067 (June 12, 2015)
Opinion by Justice Guzman
In Zorrilla, the Court held unanimously that the statutory cap on exemplary damages, TEX. CIV. PRAC. & REM CODE § 41.008(b), is not a “matter constituting an avoidance or affirmative defense” that must be pleaded under Rule of Civil Procedure 94. The Courts of Appeals were evenly divided on this “marquee issue.” But, the Supreme Court explained, “the hallmark characteristic of [both an avoidance and an affirmative defense] is that the burden of proof is on the defendant to present sufficient evidence to establish the defense and obtain the requisite jury finding.” The statutory cap, by contrast, “does not require proof” but “applies automatically when invoked.” So, by raising the cap in her motion for new trial, Zorrilla “timely claimed the protection of” the cap, even though she had not pleaded it.

Austin v. Kroger Texas, L.P.
Supreme Court of Texas, No. 14-0216 (June 12, 2015)
Opinion by Justice Boyd
Answering a question certified to it by the Fifth Circuit, the Court held in Austin that, subject to two exceptions not applicable here (the “criminal-activity” and “necessary-use” exceptions), a land owner sued for premises liability “has no duty to warn an invitee of hazards that are open and obvious or known to the invitee,” or otherwise to make the premises safe from such hazards. The question, which focused on duty and not liability, arose in the worker’s compensation context, when an employee was injured in the course of remedying a dangerous situation on his employer’s premises that the employee admittedly knew about and knew to be dangerous. But the Court confirmed that its decision applied to “the premises-liability duties of landowners to invitees generally.” The opinion includes a thorough exploration of premises-liability duty in situations of obvious or known hazards, the exceptions to the general rule limiting that duty, and the distinction between duty and liability.

Valdez v. Hollenbeck
Supreme Court of Texas, No. 13-0709 (June 12, 2015)
Opinion by Justice Guzman
Valdez addressed the deadline for heirs to seek relief when they discover wrongdoing in connection with a probate estate. In 2003, more than a decade after an estate was closed, the heirs learned the estate had been significantly undervalued, due largely to the misconduct of a Bexar County probate clerk who was pilfering assets and the estate administrator’s failure to report the true value of all the estate’s assets. The heirs took some action within two years of learning that information, but they waited another year to file a bill of review to re-open the estate to pursue claims against the administrator and his surety. The defendants argued the bill of review was time barred. The Supreme Court held the deadline for filing any bill of review, statutory or equitable, is two years from the date of the probate court’s judgment, as prescribed in former § 31 of the Texas Probate Code (now, Estates Code §§ 55.251 & -.252), not the four-year deadline in the residual statute of limitations, § 16.051 of the Civil Practice & Remedies Code. The heirs argued the deadline was tolled by fraud and the discovery rule. Although the Court discussed both tolling rules—noting the discovery rule was disfavored in probate matters—it ultimately found it unnecessary to resolve their applicability here, because the heirs had waited more than two years after learning of the apparent fraud to file their bill of review. And so their two-year clock had run out, even if its start had been tolled, as they suggested.

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