Opinion
Civil No. 3:96-CV-1929-H (S. E. BROWN), Civil No. 3:96-CV-2985-H (VERNON ADAMS), Civil No. 3:96-CV-3057-H (FELICIA ADAIR), Civil No. 3:96-CV-3098-H (HENRY RELFORD), Civil No. 3:97-CV-0055-H (LOUISA ADAIR), Civil No. 3:97-CV-1185-H (ESTELLA BROWN)
January 15, 2004
ORDER
Before the Court is Plaintiffs S. E. Brown, Felicia Adair, and Estella Brown's ("Turley Plaintiffs") Motion to Reconsider Net Worth Discovery, filed December 23, 2003 and Meridian Housing Company's ("Meridian") Response, filed January 13, 2004.
On September 30, 2000 Magistrate Judge William F. Sanderson entered an Order granting Plaintiffs' Motions (of October 4 and 11, 2000) to Compel Defendants Meridian and Voluntary Purchasing Groups, Inc. ("VPG") to provide their respective net worths. The Court articulated the principle that where punitive damages are claimed a jury is entitled to consider a wrongdoer's current net worth in order to assure that any award would not be too small if the liable party's business had grown or too large if it had been depleted between the time of the wrong and the date of trial. (September 30, 2000 Order at 1). Judge Sanderson therefore delayed the timing of the discovery of the net worth information until after the damages phase of a bifurcated trial, if the Defendants are found liable.
Defendant VPG has settled with the Plaintiffs, and is no longer a party in this litigation. The Scheduling Order now controlling was entered on May 9, 2003, and sets the liability portion of the trial for the weeks of March 8, 15, and 22, 2004.
In their Motion for Reconsideration, the Turley Plaintiffs argue that due to settlement agreements between many of the Parties in this litigation, the case is no longer as complex as it was at the time of the previous Scheduling Order (entered March 4, 1999). That order bifurcated the trials in the VPG litigation into liability and damages phases. The Plaintiffs argue that for the sake of judicial efficiency the upcoming trial should not be bifurcated, and Judge Sanderson's Order delaying discovery of net worth information should be reconsidered. In addition, the Plaintiffs argue that settlement negotiations with Meridian are not possible before trial without net worth information.
Meridian argues that the bifurcation of the trial is still important for two reasons: judicial economy (in the event it is not found liable), and avoiding exposing the jury to potentially prejudicial information regarding the Defendant's ability to pay. (See FED.R.CIV.P. 42(b) and Transportation Ins. Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994)).
The decision to bifurcate is a matter within the sole discretion of the trial court. See First Tex. Sav. Ass'n v. Reliance Ins. Co. 950 F.2d 1171, 1174 n. 2 (5th Cir. 1992). The Defendants rely on Moriel, not as binding precedent, but as providing sound reasoning for the bifurcation of liability and punitive damages portions of a case.
Moriel sets forth the following schema for bifurcation:
[T]he jury first hears evidence relevant to liability for actual damages, the amount of actual damages, and liability for punitive damages, and then returns findings on these issues. If the jury answers the punitive damage liability question in the plaintiffs favor, the same jury is then presented evidence relevant only to the amount of punitive damages, and determines the proper amount of punitive damages, considering the totality of the evidence presented at both phases of the trial. 879 S.W.2d at 30 (emphasis added).
The Court finds Moriel instructive, and adopts this schema in the instant case. This case will remain bifurcated. The first trial will commence on March 8, 2004, and will include evidence relevant to liability for actual damages, the amount of actual damages, and liability for punitive damages. If the jury returns a finding of liability for punitive damages, there will be a second trial to determine the amount of punitive damages immediately following the first trial; the second trial will involve the same jury.
The Plaintiffs' Motion for Reconsideration is GRANTED. Meridian is DIRECTED by noon, February 2, 2004 either to file with the Clerk of the Court or to provide copies of for the Court's in camera use, the following: its current net worth, including but not limited to the most current profit and loss statement-annual or monthly; statement of assets and liability-annual or monthly; and statements of net worth. Meridian is also DIRECTED to provide this information to all Plaintiffs in this case by noon, February 2, 2004.
The Clerk is directed to fax this Order to all Counsel immediately.
SO ORDERED.