                                                                                                ACCEPTED
                                                                                            06-14-00064-CV
                                                                                 SIXTH COURT OF APPEALS
                                                                                       TEXARKANA, TEXAS
                                                                                       5/13/2015 1:57:22 PM
                                                                                           DEBBIE AUTREY
                                                                                                     CLERK

                              No. 06-14-00064-CV

                                                                          FILED IN
                                                                   6th COURT OF APPEALS
                                                                     TEXARKANA, TEXAS
                 In The Sixth Court Of Appeals                     5/13/2015 1:57:22 PM
                       Texarkana, Texas                                DEBBIE AUTREY
                                                                           Clerk


                         JOYCE STEEL ERECTION, LTD.,
                                  Appellant
                                          V.


                             GORDON RAY BONNER,
                                  Appellee

           FROM THE 202ND JUDICIAL DISTRICT COURT, BOWIE COUNTY, TEXAS
                              CAUSE NO. 11C0822-202
                      HONORABLE LEON F. PESEK JR., PRESIDING


                      APPELLANT’S REPLY BRIEF




NORTON ROSE FULBRIGHT US LLP                    NORTON ROSE FULBRIGHT US LLP
     J. Jeffery Richardson                            Rosemarie Kanusky
    State Bar No. 16864450                          State Bar No. 00790999
jeff.richardson@nortonrosefulbright.com        rosemarie.kanusky@nortonrosefulbright.com
  2200 Ross Avenue, Suite 3600                        300 Convent, Suite 2100
      Dallas, Texas 78201                            San Antonio, Texas 78205
    Telephone: 214.855.8121                          Telephone: 210.270.9362
    Facsimile: 214.855.8200                           Facsimile: 210.270.7205



                     Counsel for Joyce Steel Erection, Ltd.
                                                Table Of Contents

Table Of Contents .....................................................................................................2

Index Of Authorities .................................................................................................3

Introduction ...............................................................................................................4

Argument...................................................................................................................4

         I.        The trial court miscalculated the amount of prejudgment
                   interest. .................................................................................................4

         II.       The trial court miscalculated the amount of recoverable
                   damages. ...............................................................................................7

Conclusion ................................................................................................................9

Certificate Of Compliance & Service .....................................................................11




                                                              2
                                             Index Of Authorities

                                                                                                                Page(s)

Cases
Battaglia v. Alexander,
   177 S.W.3d 893 (Tex. 2005) ........................................................................4, 5, 6
Brainard v. Trinity Universal Ins. Co.,
   216 S.W.3d 809 (Tex. 2006) ............................................................................5, 6

Galbraith Eng’g Consultants, Inc. v. Pochucha,
  290 S.W.3d 863 (Tex. 2009) ................................................................................ 7
Pilgrim’s Pride Corp. v. Cernat,
   205 S.W.3d 110 (Tex. App.—Texarkana 2006, pet. denied) ...........................7, 8
Roberts v. Williamson,
  111 S.W.3d 113 (Tex. 2003) ............................................................................6, 8
Tow v. Speer,
  CIV.A. H-11-3700, 2015 WL 1058080 (S.D. Tex. Mar. 10, 2015) ..................... 6



Statutes
TEX. CIV. PRAC. & REM. CODE (2015)
  § 33.004(i) .............................................................................................................8
  § 33.012.................................................................................................................8
  § 33.012(a) ............................................................................................................7
  § 33.012(b) ............................................................................................................7
  § 33.013.................................................................................................................8
  § 33.013(a) ............................................................................................................8




                                                             3
                                   Introduction

      This appeal involves two issues of de novo review. The first issue questions

whether the “amount of damages to be recovered by the claimant” used in

Section 33.012(a) of the Civil Practice and Remedies Code can be misread, as

Bonner does, as the “amount awarded by the jury.” The second issue questions

whether the trial court failed to follow Supreme Court precedent and apply the

declining principal formula to the calculation of prejudgment interest.

                                     Argument

I.    The trial court miscalculated the amount of prejudgment interest.

      Bonner concedes that if the declining principal formula applies to the

calculation of prejudgment interest in this case, then “the correct amount of the

judgment would be $1,937,467.32.” Appellee’s Brief at 18. Bonner erroneously

contends, however, that the declining principal formula cannot apply because there

is no separate jury finding making Joyce Crane jointly and severally liable. Id. at 7,

16, 17.

      According to Bonner, the declining principal formula is “specifically limited

… to the situation where the non-settling defendant is jointly and severally liable.”

Appellee’s Brief at 17 (emphasis removed, citing Battaglia v. Alexander, 177

S.W.3d 893, 907 (Tex. 2005)). Battaglia says no such thing.




                                          4
      Under section III of the Battaglia opinion, the Supreme Court found no trial

court error in holding the defendant associations jointly and severally liable based

on the jury’s finding of joint venture. 177 S.W.3d at 904. Under section IV of the

opinion, the Supreme Court held “the timing of settlement payments must be taken

into account.” Id. at 907.

      Additionally, “[a] settlement payment should be credited first to accrued

prejudgment interest as of the date the settlement payment was made, then to

‘principal,’ thereby reducing or perhaps eliminating prejudgment interest from that

point in time forward.” Id. at 908 (emphasis added). The Court never limited its

declining principal formula to the joint and several context.

      If there was any doubt about whether the Supreme Court’s holding was

limited to cases involving joint and several liability, then the Court removed that

doubt in Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 811 (Tex. 2006),

which involved a single defendant without joint and several liability. The

unanimous Court held that, “to satisfy the purpose of prejudgment interest,

settlements must be credited periodically, according to the date they are received.”

Id. at 816.

      Furthermore, the Court held, the settlement credit “is applied first to accrued

prejudgment interest and then to principal.” Id. at 817 (emphasis added). “This

approach, known as the ‘declining principal’ formula, is the proper way to apply


                                          5
credits in the calculation of prejudgment interest.” Id. at 816 (emphasis added); see

also Tow v. Speer, CIV.A. H-11-3700, 2015 WL 1058080, *15 (S.D. Tex. Mar. 10,

2015) (likewise applying Battaglia in the absence of joint and several liability).

      Bonner’s novel joint and several liability requirement has no basis in the

case law. It also makes no sense in light of what Bonner asked the trial court to do.

Bonner did credit the settlement payments periodically, as required by the first part

of the declining principal formula. But Bonner failed to follow the second half of

the formula by crediting the payments first to accrued prejudgment interest.

7CR3903 (calculation for the initial judgment); 7CR4040 (calculation for the

amended judgment). The trial court made the same fundamental mistake that

should now be corrected. 7CR3934-35; 7CR4042-43.

      Bonner’s real complaint seems to be that the settlement payments were made

by parties “that the jury specifically found were not responsible.” Appellee’s Brief

at 18. The Supreme Court, however, has not made any exceptions to its declining

principal formula. See Brainard, 216 S.W.3d at 816; see also Roberts v.

Williamson, 111 S.W.3d 113, 123 n.7 (Tex. 2003) (“[A] defendant may

incidentally benefit from a claimant’s favorable settlement with others.”).

      The trial court here did not follow the Supreme Court’s declining principal

formula in its entirety. At a minimum, the judgment must be modified to reflect a

proper calculation.


                                          6
II.      The trial court miscalculated the amount of recoverable damages.

         Bonner contends that the proportionate responsibility statute is “simple.”

Appellee’s Brief at 12. The Supreme Court disagrees. Galbraith Eng’g

Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 868 (Tex. 2009) (describing

chapter 33 of the Civil Practice and Remedies Code as “a complex statutory

scheme”).

         Bonner also argues — without citing a single supporting case or even the

pertinent section of the proportionate responsibility statute — that the “jury’s

determination of the amount of damages gives the trial court its starting point for

all subsequent damage calculations and reductions.” Appellee’s Brief at 10.

Bonner then mischaracterizes Joyce Crane’s issue regarding Section 33.012 of the

Civil Practice and Remedies Code as an attempt to create a statutory ambiguity. Id.

at 12.

         To the contrary, Section 33.012 is not ambiguous. Pilgrim’s Pride Corp. v.

Cernat, 205 S.W.3d 110, 117-18 (Tex. App.—Texarkana 2006, pet. denied)

(declining to find ambiguity when holding that Section 33.012 “imposes limits on

what a claimant may recover”). Section 33.012 repeatedly refers to the “amount of

damages to be recovered by the claimant.” TEX. CIV. PRAC. & REM. CODE

§ 33.012(a), § 33.012(b). The section does not refer to the “amount of damages




                                          7
found by the jury,” although the legislature could have used that simple phrase if

that had been its intent.

         Nor is Joyce Crane trying to create a conflict between Sections 33.012 and

33.013, as Bonner suggests. See Appellee’s Brief at 12; see also Pilgrim’s Pride,

205 S.W.3d at 118 (“Section 33.013 limits the liability of a particular defendant

who is not jointly and severally liable.”). Instead, Section 33.012 should be

construed according to its plain terms.

         Section 33.012’s reference to the “amount of damages to be recovered by the

claimant ” should be construed to exclude the amount of damages attributable to

the responsible — but not liable — third party. TEX. CIV. PRAC. & REM. CODE

§ 33.012, § 33.004(i). Doing so results in a take-nothing judgment in Joyce Crane’s

favor.

         On other facts not present here (such as different awards or allocation of

responsibility), the limit “on the amount of liability” stated in Section 33.013

would come into play. TEX. CIV. PRAC. & REM. CODE § 33.013. Significantly,

Section 33.013 specifically refers to the “damages found by the trier of fact.” Id.

§ 33.013(a). The legislature’s use of that explicit phrase in Section 33.013 signals

its intent to mean something else in Section 33.012 when it says the “amount of

damages to be recovered by the claimant.” See Roberts, 111 S.W.3d at 123




                                          8
(“[D]amages under these two sections are the same only when the claimant has not

settled and shares no responsibility.”).

      The judgment should be reversed because properly applying the

proportionate responsibility statute and pertinent settlement credits yields a take-

nothing judgment in favor of Joyce Crane.

                                      Conclusion

      For all the foregoing reasons and those stated in its opening brief, Joyce

Crane requests a take-nothing judgment in its favor and release of its surety, or

alternatively, reformation of the judgment to reflect the proper calculation of

prejudgment interest (which reduces the judgment to $1,937,467.32). Joyce Crane

prays for all other relief to which it may be entitled.




                                           9
Respectfully submitted,

NORTON ROSE FULBRIGHT US LLP

By: /s/ Rosemarie Kanusky
    State Bar No. 00790999
      rosemarie.kanusky@nortonrosefulbright.com
300 Convent, Suite 2100
San Antonio, Texas 78205
Telephone: 210.224.5575
Telecopier: 210.270.7205

and

NORTON ROSE FULBRIGHT US LLP
J. Jeffery Richardson
Jeff.Richardson@Nortonrosefulbright.com
2200 Ross Avenue, Suite 3600
Dallas, Texas 78201
Telephone: 214.855.8121
Facsimile: 214.855.8200

Counsel for Appellant,
Joyce Steel Election, Ltd.




  10
                           Certificate Of Compliance & Service

           I certify that this brief complies with type-face and type-volume

requirements. The document contains 1,485 words excluding the table of contents

and index of authorities.

           I certify that a copy of this brief was emailed to the following:

Robert L. Clements                                    John R. Mercy
Robert@clementslaw.com                                jmercy@texarkanalawyers.com
Kelly R. Clements                                     MERCY CARTER TIDWELL, L.L.P
Kelly@clementslaw.com                                 1724 Galleria Oaks Drive
CLEMENTS & CLEMENTS                                   Texarkana, Texas 75503
731 N. St. Paulus Ave.                                Counsel for Appellee,
Dallas, Texas 78214                                   Gordon Ray Bonner
Counsel for Appellee,
Gordon Ray Bonner

Paul A. Bezney                                        Brent L. Watkins
paul@ahblaw.net                                       bwatkins@skeltonslusher.com
J. Kevin Kindred                                      Skelton Slusher Barnhill
kevin@ahblaw.net                                      Watkins Wells, PLLC
Adkerson, Hauder & Bezney, P.C..                      1616 South Chestnut
1700 Pacific Avenue, Ste. 4450                        Lufkin, Texas 75901
Dallas, Texas 75201                                   Counsel for Intervenor,
Counsel for Appellant,                                American Interstate Insurance
Joyce Steel Election, Ltd.                            Company



                                                      /s/ Rosemarie Kanusky
                                                      May 13, 2015
41669667




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