Rodriguez v. Ramirez (In re Ramirez)

IN RE: ANITA C RAMIREZ, Debtor(s).JOSE ALBERTO RODRIGUEZ, et al, Plaintiff(s)

v.ANITA RAMIREZ, et al, Defendant(s).

Case No. 09-70051

Adversary No. 09-7004

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS MCALLEN DIVISION

SIGNED November 9, 2011

Chapter 7

Judge Isgur

MEMORANDUM OPINION

In accordance with the District Court's judgment, the Bankruptcy Court awards $901,005.00 in exemplary damages against Anita and Leonardo Ramirez ("Ramirezes"), $901,005.00 in exemplary damages against Anita Garza, and $450,502.50 in exemplary damages against Feliberto Ramirez.

Background

This case was tried from October 26, 2010 through October 28, 2010. The Court issued a Memorandum Opinion and Judgment on January 5, 2011, finding that Anita Ramirez, Leonardo Ramirez, Anita Garza, and Feliberto Ramirez had fraudulently transferred a tract of real property ("Noncontiguous Tract") and $450,502.50 in cash. ECF Nos. 263 & 264. The Court vested title in the Noncontiguous Tract with Anita and Leonardo Ramirez's chapter 7 Trustee,¹ held that Anita Garza and Feliberto Ramirez were jointly and severally liable for the $450,502.50 in transferred cash, and held that all Defendants were jointly and severally liable for $251,137.93 in legal fees. The Court also awarded exemplary damages in the amount of $2.2 million againstAnita and Leonardo Ramirez and against Anita Garza. The Court awarded $1.1 million in exemplary damages against Feliberto Ramirez. The Court issued an amended judgment clarifying its ruling on January 24, 2011. ECF No. 277.

The Defendants appealed to the District Court. See ECF No. 294. On September 28, 2011, the District Court affirmed the decision as to all issues except the exemplary damages amounts. ECF No. 306, at 2-3. The District Court remanded the exemplary damages issue to the Bankruptcy Court for a redetermination in accordance with applicable law, including Tex. Civ. Prac. & Rem. Code §§ 41.006 and 41.008.

Analysis

The Court revises its exemplary damages award in two respects: (i) Defendants are severally liable, not jointly and severally liable; and (ii) the amount of the award against each Defendant does not exceed the statutory maximum.

Several liability is required by Tex. Civ. Prac. & Rem. Code § 41.006. Section 41.006 states: "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." The Court's judgment made the Defendants jointly and severally liable for the exemplary damages. The District Court directed this Court to determine exemplary damages in accordance with § 41.006, and the Court holds that the Defendants are instead severally liable for the damages awarded against each Defendant.

The amount of exemplary damages is capped by Tex. Civ. Prac. & Rem. Code § 41.008. Section 41.008 states, in part:

(a) In an action in which a claimant seeks recovery of damages, the trier of fact shall determine the amount of economic damages separately from the amount of other compensatory damages.

(b) Exemplary damages awarded against a defendant may not exceed an amount the greater of:

(1) (A) two times the amount of economic damages; plus (B) an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or

(2) $200,000.

In this case, the amount of economic damages is $450,502.50 (the transferred cash) plus the value of the Noncontiguous Tract. See Tex. Civ. Prac. & Rem. § 41.001 (defining "economic damages" as "compensatory damages intended to compensate a claimant for actual economic or pecuniary loss; the term does not include exemplary damages or noneconomic damages"); Shook v. Walden, 304 S.W.3d 910, 921 (Tex. App.—Austin 2010, no pet.) (holding that "economic damages" do not include legal fees).

Because the Plaintiffs presented no evidence at trial of the value of the Noncontiguous Tract, the Court does not include that amount in its calculation of the maximum exemplary damages. There are no noneconomic damages in this case, and so exemplary damages are limited to twice the amount of economic damages. The Court may award up to $901,005.00 in exemplary damages against each defendant. Tex. Civ. Prac. & Rem. Code § 41.008 See Wackenhut Corrections Corp. v. de la Rosa, 305 S.W.3d 594, 651 (Tex. App.—Corpus Christi 2009, no pet.) (applying statutory cap and awarding $751,103—an amount consisting of $1,103 in economic damages plus the maximum of $750,000 in noneconomic damages—"against each defendant") (emphasis original).

The Court's January 5, 2011 Memorandum Opinion extensively discussed the facts supporting the exemplary damages award. ECF No. 263, at 22-26. Before this proceeding was filed, Roberto, Patricia, Jose, and Maria Rodriguez had been awarded $19.7 million in state courtbecause of Leonardo Ramirez's intentional shooting of Roberto Rodriguez. After the shooting, the Ramirezes transferred cash and real estate to their children.

The Court found that the Ramirezes, Anita Garza, and Feliberto Ramirez conspired to transfer the cash and real estate with objective substantial certainty that depriving the Rodriguezes of payment of the state-court judgment would result in serious harm to the Rodriguez family. The Rodriguez family suffered acutely because of the transfers. Because they were not paid on the state-court judgment, the family could not afford to take care of Roberto Rodriguez at home. At the time of trial, he lived in a nursing home and saw his family infrequently. The Rodriguezes were unable to pay for physical...