© 2012 The Texas Lawbook.
By Janet Elliott
Staff Writer for The Texas Lawbook
Austin (September 2, 2012) – The Texas Supreme Court threw out a $46 million award to a man who was crushed by a rolling U-Haul truck, finding that evidence of safety problems in Canadian trucks was improperly admitted in a Dallas County trial.
The court said there is enough evidence for a re-trial on negligence and actual damages, but rendered a take-nothing judgment on the jury’s gross negligence findings and punitive damages. The six-person jury’s initial award of $84 million in the case was the fifth largest verdict in the nation in 2008, according to Dunn & Bradstreet.
“The court applied very well-settled Texas law to reverse and remand for a new trial on the improperly admitted Canadian evidence,” said Tom Leatherbury, who argued the case for U-Haul.
The ruling comes one month after the death of Talmadge Waldrip, who had been bedridden since the September 2006 accident. Waldrip suffered massive injuries when the 26-foot, 12,000-pound jumbo hauler rolled over him as he was getting out the driver’s door.
“He died last month after being in a bed for five years where he had to be rolled over every hour and a half by his 75-year-old wife,” said Mesquite attorney Ted Lyon, who represented Waldrip.
Evidence during the trial showed that several previous renters had complained about the vehicle, which was found to have an inoperable parking brake caused by leaking transmission fluid. The high-mileage truck, which had a history of maintenance issues, was dubbed “the Titanic” by high school students after it was used to haul their band equipment, Lyon said.
Waldrip sued U-Haul International, the company’s Texas subsidiary and its contract dealer. The jury found all three companies negligent by failing to inspect and maintain the truck’s brake system and transmission system. Jurors also found U-Haul International and U-Haul Texas grossly negligent and awarded punitive damages. The Dallas Court of Appeals reversed the exemplary damages against U-Haul International but upheld them against U-Haul Texas based on the hiring of an inexperienced area field manager whose job was to inspect the vehicles.
The Supreme Court said Waldrip can retry the negligence case against all three entities, but closed the door on punitive damages against UHI and UHT.
The disputed evidence came from Brian Patterson, president of the Ontario Safety League. Patterson told jurors that half of 30 trucks the group inspected had brake problems, and that three of those specifically involved the parking brake. He cited those results and unspecified Canadian government tests on 1,400 trucks as evidence of U-Haul’s systematic disregard for public safety in its maintenance practices.
In the court’s 8-1 majority opinion, Justice Dale Wainwright said there is no evidence that the trucks tested in Ontario were of the same type or size as the one driven by Waldrip.
“Patterson’s testimony falls well short of supporting a reasonable conclusion that safety problems in a foreign country indicated a disregard of inspection and maintenance programs causing an objectively extreme risk of serious injury in the United States; nor does it provide any reasonable basis to conclude that the accident in this case was attributable to a defective U-Haul safety program,” Wainwright said.
Justice Debra Lehrmann dissented, saying the Canadian evidence was “probative of U-Haul’s routine, systemic disregard for its own maintenance policies.” And even if it should not have been admitted, the error was harmless, she said.
“The jury’s verdict did not turn on that evidence; to the contrary, there was abundant evidence of U-Haul’s negligence,” she said.
Lyon said the ruling follows the high court’s pattern of overturning jury verdicts favoring plaintiffs.
“In my opinion, what they’ve done here is legislated from the bench and said, if you get any punitive damages in Texas we’re not going to approve them,” he said. “These kind of rulings make me lose respect for the law.”
Leatherbury, a partner in the Dallas office of Vinson & Elkins, said the court’s disposition of the case is not unusual.
“Justice Wainwright covered that in his footnote where he indicated that it’s fairly routine for court to render when there is no evidence on an issue,” Leatherbury said. “We felt strongly all along that neither U-Haul company should be liable for punitive damages.”
Steve Taub, assistant general counsel for Phoenix-based U-Haul International, expressed condolences to the Waldrip family. He said he expects stepped-up efforts to settle the case.
“It’s unfortunate we had to get this far” because of evidence that didn’t have any place before a jury, Taub said.
U-Haul’s experts agreed that the parking brake was inoperable and the transmission damaged when the accident occurred, but blamed drivers trying to shift into reverse when the vehicle was moving forward and driving with the parking brake on, according to the opinion.
The case also focused on the Texas subsidiary’s hiring of an area field manager with no mechanical experience to perform vehicle inspections. The Dallas Court of Appeals said the gross negligence finding was supported by the manager’s lack of experience.
The Supreme Court said Waldrip failed to present evidence that a mechanical background was required for the role or that U-Haul’s training program was inadequate.
“Further, we are concerned about the impact the court of appeals’ reasoning may have on future gross-negligence cases involving alleged reckless hiring,” said Wainwright. “Under the court of appeals’ reasoning, any time an employer hires a previously inexperienced employee requiring training in specific safety tasks, the employer conceivably may be found grossly negligent and subject to punitive damages if the employee acts negligently in performing her tasks.”
The Texas Civil Justice League had said in a brief that the case had the potential to chill hiring.
“I think the ruling protects employers that want to hire entry-level employees and train them on the job,” Taub said.
© 2012 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.