When punitive damages are awarded against a group of defendants, are the defendants jointly and severally liable for the punitive damages award?

§ 41.006. Award Specific To Defendant

In any action in which there are two or more defendants, an award of exemplary damages must be specific as to a defendant, and each defendant is liable only for the amount of the award made against that defendant.

Concerning the award of exemplary damages against multiple defendants: "In any action in which there are two or more defendants, an award of exemplary damages must be specific as to a defendant, and each defendant is liable only for the amount of the award made against that defendant." TEX. CIV. PRAC. & REM. CODE ANN. § 41.006. Several courts have interpreted this to unambiguously mean that there can be no joint and several liability on exemplary damages. See Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520 S.W.3d 848, 873 (Tex. 2017); Computek Computer & Office Supplies, Inc. v. Walton, 156 S.W.3d 217, 224 (Tex. App.—Dallas 2005, no pet.). Therefore, the trial court erred by awarding exemplary damages against the Marins jointly and severally. We reverse the portion of the trial court's judgment that awards exemplary damages against the Marins jointly and severally. We partially sustain appellants' eighth issue.

Bova also pleaded gross negligence and requested exemplary or punitive damages in both his original and amended petitions. Unlike liability for actual damages, liability for punitive damages is never joint and several, including when an employer is vicariously liable for its employees' torts. Tex. Civ. Prac. & Rem.Code §§ 33.002(c)(2), 41.006; see also Computek Comput. & Office Supplies, Inc., v. Walton, 156 S.W.3d 217, 223–24 (Tex.App.—Dallas 2005, no pet.) (rejecting contention that Section 41.006 permitted an exception for closely related defendants, like a corporation and its president). So in any suit for damages involving multiple defendants, an award of punitive damages must be specific to a given defendant, and one defendant bears no responsibility for a punitive-damages award made against another. TEX. CIV. PRAC. & REM.CODE §§ 41.002(a), 41.006. Therefore, as with actual damages, the omission of the employee defendants from Bova's amended petition did not expose AAMCO to greater liability for punitive damages, because the employees could not have borne any responsibility for punitive damages assessed against AAMCO or vice versa.

In his third and final issue, Penny asserts that the district court's award of exemplary damages jointly and severally against Penny and the other third-party defendants was improper under section 41.006 of the Texas Civil Practices and Remedies Code. We agree. By its plain terms, section 41.006 prohibits joint and several liability for exemplary damages by requiring that the award of exemplary damages be specific as to a defendant and that the defendant be liable only for the amount of the award against him: “[I]n any action where there are two or more defendants, an award of exemplary damages must be specific as to a defendant, and each defendant is liable only for the amount of the award made against that defendant.” Tex. Civ. Prac. & Rem.Code § 41.006; see Carlton Energy Grp., LLC v. Phillips, 369 S.W.3d 433, 465 (Tex.App.–Houston [1st Dist.] 2012) (rejecting argument that alter ego finding trumps 41.006's plain language), aff'd in part, rev'd in part, ––– S.W.3d ––––, No. 12–0255, 2015 WL 2148951 (Tex. May 8, 2015) (section 41.006 issue was not raised appealed to supreme court); Computek Computer & Office Supplies, Inc. v. Walton, 156 S.W.3d 217, 223–24 (Tex.App.–Dallas 2005, no pet.) (“By its plain terms, section 41.006 provides that there is no joint and several liability for exemplary damages.”); see also, e.g., City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex.2008) (noting “we ascertain and give effect to the Legislature's intent as expressed by the language of the statute” and “we construe the statute's words according to their plain and common meaning”). Accordingly, it was error for the district court to make Penny jointly and severally liable for these damages.

El Patio, LLC urges us to apply an exception to section 41.006 for closely-related defendants or for interrelated companies with common decision makers. See Transfer Products, Inc. v. Texpar Energy, Inc., 788 S.W.2d 713, 717 (Tex.App.–Corpus Christi 1990, no writ) (affirming joint and several award of exemplary damages against interrelated companies with the same decision makers). In fact, El Patio, LLC suggests that the Houston Court of Appeals considered and approved of such a solution in Carlton, and that we should go one step further and adopt it here. But a close reading of Carlton reveals that First Court of Appeals was merely offering a “suspenders” argument to support its main holding. See Carlton, 369 S.W.3d at 465 (“However, even if such a finding might in some circumstances permit joint and several liability for exemplary damages, ....”) (emphases added). Regardless, cases such as Texpar, which allowed the exception, were decided before section 41.006 became applicable and, thus, were governed by the common-law rules for exemplary damages. Computek, 156 S.W.3d at 224. Having been enacted by the Legislature, section 41.006 now controls this issue. We sustain Penny's third issue.

Given that the purpose of exemplary damages is to punish defendants for civil wrongs and to deter future misconduct, the punishment should fit the misconduct rather than a state's joint and several liability regime. Compensatory and exemplary damages undoubtedly serve different purposes, and the joint and several liability regime is intended to further the purpose of compensatory damages—redressing concrete losses caused by the defendant's wrongful conduct. Stated differently, we do not believe that a person should be punished by the assessment of exemplary damages simply because of his or her ability to pay, which is the case when a defendant is held jointly and severally liable for an entire compensatory damages award even though that defendant only caused a small portion of the plaintiff's injury. We note that while Texas law allows defendants faced with joint-and-several compensatory awards to seek contribution from the other wrongdoers if required to pay the entire award, this is not the case with exemplary damages given that Texas law does not allow joint-and-several exemplary damages awards. See TEX. CIV. PRAC. & REM. CODE § 41.006. Thus, we hold that in determining the basis for a constitutionally permissible amount of exemplary damages, courts must consider the harm each defendant actually caused and assess the punishment based on that harm because this approach most closely matches the punishment to each defendant's misconduct.