In Davis v. White, a lawyer sued his former partner over the application of a receivable. No. 02-13-00191-CV, 2016 Tex. App. LEXIS 3075 (Tex. App.—Fort Worth March 24, 2016, no pet. history). A jury awarded the plaintiff over $300,000 in actual damages and $2.8 million in exemplary damages. The trial court awarded the plaintiff his actual damages, but applied the exemplary damages cap, and limited that award to around $550,000. The plaintiff appealed, arguing that the cap should not have been applied because he pleaded and proved that the defendant’s actions fell within the “misapplication of fiduciary property” exception to the cap listed in Texas Civil Practice and Remedies Code section 41.008(c)(10). The court of appeals disagreed, holding that the plaintiff did not plead facts in support of the capbuster “in relation to his punitive damages claim.” The plaintiff also argued that he would have pled the capbuster and would have introduced proof of a violation of Penal Code section 32.45 if the defendant had pled the punitive damages cap. Following Texas Supreme Court precedent, the court of appeals held that the defendant did not need to plead the cap to be entitled to its application. Moreover, the court of appeals held that in light of the plaintiff’s concession that he did not plead and prove the capbuster, the trial court did not err in applying the cap and reducing the jury’s exemplary damages award.
Interesting Note: The author has previously written on the issues highlighted in this opinion. Click here to read my previous article. Misapplication of fiduciary property or property of a financial institution is a charge that has been in existence in Texas for over forty years. Tex. Penal Code Ann. § 32.45. A person commits the offense of misapplication of fiduciary property by intentionally, knowingly, or...
