Citations
- 696 S.W.2d 439
Full opinion text
OPINION
Before ESQUIVEL, REEVES and MASSEY, JJ.
MASSEY, Justice (Assigned).
Plaintiff, David R. Rico d/b/a Rico Construction Company, a subcontractor, brought suit for damages against the general contractor, Chasewood Construction Company (Chasewood), for breach of his two written contracts. Chasewood counterclaimed for breach of contract damages. Rico’s action was later amended to include an action for defamation growing out of the same transaction.
Following trial before a jury, the court rendered judgment for Rico for $650,000.00 actual damages and $1,750,000.00 punitive damages on the defamation count, and $51,591.45 as contract damages, together with pre-judgment and post-judgment interest and $36,000.00 as attorney fees. The district court later required Rico to remitt $250,000.00 of the punitive award.
Chasewood appeals from the judgment for both breach of contract and defamation. Because of error in the submission of special issues for the breach of contract action, the judgment for breach of contract is reversed and remanded for retrial. Our reversal affects only the breach of contract portion of the case and is clearly separable without unfairness to the parties. TEX.R. CIY.P. 434. Judgement for actual and exemplary damages for defamation is affirmed.
BREACH OF CONTRACT
There is no dispute that Chasewood terminated its contract with Rico on December 1, 1981, for framing and trimming apartment complexes. The judgment for damages for breach of contract is dependent upon the answer to Special Issue Number 6 which inquired whether Chasewood made the terminations in bad faith. Special Issue Number 7 was conditional on a finding of bad faith in Special Issue Number 6. Special Issue Number 6 reads:
SPECIAL ISSUE NO. 6
Did Chasewood, on December 1, 1981, act in bad faith in terminating Rico’s framing contract and/or the trim contract?
Answer: ‘They acted in bad faith’ or ‘they did not act in bad faith’ for each contract separately.
You are instructed that ‘to act in bad faith’ means to act in a manner that is arbitrary, capricious, or unreasonable.
We the jury answer as to the Framing contract and Trim contract as follows:
Framing Contract: They acted in bad faith (Answer ‘They acted in bad faith’ or ‘They did not act in bad faith’)
Trim Contract: They acted in bad faith (Answer ‘They acted in bad faith’ or ‘They did not act in bad faith’)
(Emphasis of the word “or” is supplied.) Because the jury found Chasewood acted in bad faith, it answered Special Issue Number 7 and found $51,491.45 in damages for the termination of both the framing and the trim contracts.
The preliminary instructions included one that every finding made by the jury must be by a preponderance of the evidence.
We find reversible error based on the holding of Southern Pine Lumber Co. v. King, 138 Tex. 473, 161 S.W.2d 483 (1942). In Southern Pine Lumber Co., the special issue and instruction read:
Special Issue No._
Do you find from a preponderance of the evidence that ...
Answer ‘Yes’ or ‘No’ as you may determine from a preponderance of the evidence
In both Special Issue Number 6 above and in the instruction to the jury in the cited case of Southern Pine Lumber Co. we have supplied emphasis to the word “or.” Concerning the language of the special issue in Southern Pine Lumber Co. our supreme court wrote:
The Lumber Company was entitled to negative answers to each of the special issues in the event the evidence did not preponderate in favor of affirmative answers thereto. The issues were so framed as to inform the jury that affirmative answers thereto must be based upon a preponderance of the evidence, but vice in them lies in the fact that they were so framed as to inform the jury that negative answers thereto must also be based upon a preponderance of the evidence. Considering the questions and the instructions together as they should be considered, since they are both but parts of the special issues, the conclusion cannot be escaped that, while the jury was instructed to answer ‘yes’ from a preponderance of the evidence, it was likewise instructed to answer ‘no’ from a preponderance of the evidence.
Had the instructions been merely to answer the questions ‘yes’ or ‘no’ the special issues would not have been subject to the objections urged against them. Traders & General Insurance Co. v. Jenkins, 135 Tex. 232, 141 S.W.2d 312. But they went further than that and informed the jury, in effect, that whether their answers were ‘yes’ or