The One Satisfaction Rule in Texas

THE ONE SATISFACTION RULE AND SETTLMENT CREDIT 

The one-satisfaction rule is "the longstanding proposition that a plaintiff should not be compensated twice for the same injury." Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991); Galle, Inc. v. Pool, 262 S.W.3d 564, 573 (Tex. App.-Austin 2008, pet. denied). "The rationale for this doctrine is that the plaintiff should not receive a windfall by recovering an amount in court that covers the plaintiff's entire damages, but to which a settling defendant has already partially contributed. The plaintiff would otherwise be recovering an amount greater than the trier of fact has determined would fully compensate for the injury." First Title Co. v. Garrett,860 S.W.2d 74, 78 (Tex. 1993); Galle, 262 S.W.3d at 573. The one-satisfaction rule applies both when several defendants commit the same act and when multiple defendants commit technically different acts that result in the same, single injury. Stewart Title, 822 S.W.2d at 7; Galle, 262 S.W.3d at 573. The application of the rule is not limited to tort claims, and whether the rule may be applied depends not on the cause of action asserted but rather on the injury sustained. Galle, 262 S.W.3d at 573. Thus, if the plaintiff has suffered only one injury, even if based on "overlapping and varied theories of liability," the plaintiff may recover only once. Id. The fact that more than one defendant may have caused the injury or that there may be more than one theory of liability does not modify this rule. See Stewart Title, 822 S.W.2d at 8; Galle, 262 S.W.3d at 573-74. We review the trial court's application of the one-satisfaction rule de novo. See Galle, 262 S.W.3d at 570 n.3.

The party seeking a settlement credit has the burden to prove its right to such a credit. Utts v. Short, 81 S.W.3d 822, 828 (Tex. 2002); Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 927 (Tex. 1998); see Galle, 262 S.W.3d at 570, 572. The party must prove the settlement amount by introducing into the record either the settlement agreement or some other evidence of the settlement amount. Ellender, 968 S.W.2d at 927; Galle, 262 S.W.3d at 572. If the nonsettling party meets this burden, the burden shifts to the plaintiff—the party in a better position to prove the proper allocation of the settlement—to show the extent to which the settlement amounts were allocated to separate damages caused by the settling defendants as opposed to joint or common damages. Galle, 262 S.W.3d at 572 (citing Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 391-92 (Tex. 2000); Ellender, 968 S.W.2d at 928-29). If the plaintiff fails to satisfy this burden, then the nonsettling party is entitled to a credit equaling the entire settlement amount. See Ellender, 968 S.W.2d at 928; Galle, 262 S.W.3d at 574.

SOURCE: AUSTIN COURT OF APPEALS - No. 03-14-00738-CV - 1/20/2017

THE SINGLE SATISFACTION RULE IN TEXAS

"The one satisfaction rule applies to prevent a plaintiff from obtaining more than one recovery for the same injury." Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991); see also Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000). Under this rule, a plaintiff is entitled to one recovery for damages suffered when multiple defendants commit the same act as well as when multiple defendants commit technically different acts resulting in a single injury. Casteel, 22 S.W.3d at 390. A court can grant summary judgment based on the one satisfaction rule. See El Paso Natural Gas Co. v. Berryman, 858 S.W.2d 362, 363 (Tex. 1993) (per curiam).

The one satisfaction rule is grounds for granting summary judgment when (1) the one satisfaction rule applies, (2) the credit sought by the defendant entirely sets off the maximum compensatory liability claimed by the plaintiff, and (3) punitive damages are not at issue. Cohen v. Arthur Andersen, L.L.P., 106 S.W.3d 304, 309-10 (Tex. App.-Houston [1st Dist.] 2003, no pet.).

SOURCE: FOURTEENTH COURT OF APPEALS HOUSTON - No. 14-13-00113-CV - 7/15/2014

PUNITIVE DAMAGES ARE A DIFFERENT MATTER 

"The `one satisfaction rule' is usually inapplicable to punitive damage awards because punitive damages do not concern compensation; they are, instead, intended to punish the wrongdoer and to deter future similar acts." Universal Servs. Co. v. Ung, 882 S.W.2d 460, 467 (Tex. App.-Houston [14th Dist.] 1994), rev'd on other grounds, 904 S.W.2d 638 (Tex. 1995); see Casteel, 22 S.W.3d at 391 ("A nonsettling defendant cannot receive credit for settlement amounts representing punitive damages."); Ratner v. Sioux Natural Gas Corp., 719 F.2d 801, 804 (5th Cir. 1983) ("The purpose of the [one satisfaction] rule is to ensure that a plaintiff receives no more than full compensation for his loss. A plaintiff awarded punitive damages has been given the right to receive more than `one satisfaction.'" (citations omitted)). Punitive damage calculations are based on the award of compensatory damages, not the amount actually recovered. See Tex. Civ. Prac. & Rem. Code Ann. § 41.004(a) (West 2008); Gilcrease v. Garlock, Inc., 211 S.W.3d 448, 458 (Tex. App.-El Paso 2006, no pet.). Consequently, a plaintiff would be entitled to recover punitive damages based on an award of compensatory damages even though his ability to recover compensatory damages is entirely offset by a credit based on the one satisfaction rule. See Gilcrease, 211 S.W.3d at 458-59.