Texas Fraud Exemplary Damages

As for exemplary damages based on a common-law fraud claim, the standard has been set in Transportation Insurance Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994). In Moriel, the supreme court held that punitive damages are available only in exceptional cases. Id. at 18. They are levied only to punish defendants for "outrageous, malicious, or otherwise morally culpable conduct." Id. at 16. The definition of gross negligence includes two elements: (1) viewed objectively from the standpoint of the actor, the act or omission must involve an extreme degree of risk, considering the probability and magnitude of the potential harm to others; (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. Id. at 23.