In City of Tyler v. Likes, 962 S.W.2d 489 (Tex. 1998), the supreme court explored the rationale and extent of the exception to the general rule that limits recovery for breach of contract to economic loss. First, it recognized that "Texas has authorized recovery of mental anguish damages in virtually all personal injury actions." Likes, 962 S.W.2d at 495.
In addition, it recognized that "mental anguish is also compensable as the foreseeable result of a breach of duty arising out of certain special relationships." Id. at 496.
These include the physician-patient relationship, and "a very limited number of contracts dealing with intensely emotional non-commercial subjects such as preparing a corpse for burial." Id.
The court cautioned, however, that, "without intent or malice on the defendant's part, serious bodily injury to the plaintiff, or a special relationship between the two parties," damages are recoverable for mental anguish "in only a few types of cases involving injuries of such a shocking and disturbing nature that mental anguish is a highly foreseeable result," such as actions for wrongful death and actions by bystanders for the injury of a close family member. Id. at 496.
In distinguishing these cases and disallowing recovery for mental anguish damages for property destruction in Likes itself, the court reasoned, "While few persons suffering serious bodily injury would feel made whole by the mere recovery of medical expenses and lost wages, many whose property has been damaged or destroyed will be entirely satisfied by recovery of its value." Id. at 496-97.