In 2017, Hayes Hunter PC successfully undertook representation of a client after she attempted to purchase a medical services company, but the seller of the company failed to deliver clear title and refused to return our client her down payment.
Hayes Hunter PC brought suit on the buyer’s behalf against the seller for breach of contract, conversion, unjust enrichment, and fraud, seeking to recover our client’s down payment and additional expenses. Hayes Hunter PC also alleged in the lawsuit that the buyer was entitled to “exemplary damages” because the seller acted “intentionally, maliciously, and fraudulently.”
Texas law typically allows a plaintiff to recover damages to make him or her whole (actual damages) and damages to punish the wrongdoer (punitive damages). Actual damages can be broken into two categories: economic damages, which is the amount of money necessary to make the plaintiff financially whole, and non-economic damages, which includes compensation for things like pain and suffering, mental anguish and loss of relationships with family members.
“Exemplary damages” means any damages awarded as an example to others, as a penalty, or by way of punishment. The term includes punitive damages. Exemplary damages are special and must be specifically pled. A party seeking exemplary damages must prove those damages by clear and convincing evidence.
Courts will not be satisfied by evidence of ordinary negligence, bad faith, or a deceptive trade practice. Indeed, exemplary damages require proof of willfulness, malice, or gross negligence that go beyond the allegations necessary in a petition seeking recovery of compensatory damages. For example, exemplary damages are not recoverable in an action for simple breach of contract not accompanied by a separate and independent tort, even though the breach is brought about capriciously and with malice.
Generally, exemplary damages are recoverable only when there is also proof of “actual” damages, and the allowable exemplary damages must relate to the actual damages sought.
In an action seeking damages like this one, the amount of economic damages is determined separately from the amount of other compensatory (i.e., exemplary) damages. Generally, exemplary damages are “capped” at twice the amount of economic damages, plus (at most) $750,000.00 in non-economic damages. However, under the Texas Consumer Protection – Deceptive Trade Practices Act, at issue in our client’s lawsuit, a prevailing consumer can recover up to three times the amount of economic damages.
In our client’s case, the court ultimately awarded not only a refund of her down payment and expenses, but three times that amount in addition as exemplary damages, and attorney fees. The lawyers and professional staff at Hayes Hunter PC is proud to have delivered our client such an outstanding result!
