Transportation Insurance Co. v. Moriel

In Transportation Insurance Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994), the Court held that upon a party's request, a trial court must bifurcate the trial and obtain jury findings on liability and actual damages before allowing evidence -- including evidence of a defendant's net worth -- on the amount of punitive damages: Under this approach, the jury first hears evidence relevant to liability for actual damages, the amount of actual damages, and liability for punitive damages (e.g., gross negligence), and then returns findings on these issues. If the jury answers the punitive damages liability question in the plaintiff's favor, the same jury is then presented evidence relevant only to the amount of punitive damages, and determines the proper amount of punitive damages, considering the totality of the evidence presented at both phases of the trial. 879 S.W.2d at 30. The Court was concerned that existing procedures failed to ensure that punitive damage awards "'are not grossly out of proportion to the severity of the offense and have some understandable relationship to compensatory damages.'" Moriel, 879 S.W.2d at 29. The Court held that gross negligence involves two components: (1) viewed objectively from the actor's standpoint, the act or omission complained of must involve an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and (2) the actor must have actual, subjective awareness of the risk involved, but nevertheless proceed in conscious indifference to the rights, safety, or welfare of others. The first element, "extreme risk," means not a remote possibility of injury or even a high probability of minor harm, but rather the likelihood of serious injury to the plaintiff. Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex. 1998); Universal Servs. Co. v. Ung, 904 S.W.2d 638, 641 (Tex. 1995); Moriel, 879 S.W.2d at 22. The second element, "actual awareness," means that the defendant knew about the peril, but its acts or omissions demonstrated that it did not care. Ellender, 968 S.W.2d at 921; Wal-Mart Stores, Inc. v. Alexander, 868 S.W.2d 322, 326 (Tex. 1993). Circumstantial evidence is sufficient to prove either element. Ellender, 968 S.W.2d at 921; Moriel, 879 S.W.2d at 22-23.