What damages can I recover in my collection lawsuit?

Actual damages, the Texas collection lawyer seeks damages called “compensatory damages”, awarded to compensate for an injury or to repair a wrong. Actual damages may be either economic or non-economic and do not include exemplary damages. Economic damages compensate for actual economic or pecuniary loss, and non-economic damages are awarded to compensate for physical pain and suffering, mental and emotional pain or anguish, disfigurement, physical impairment, loss of companionship in society, inconvenience, loss of enjoyment of life, injury to reputation, and all other non-pecuniary losses, other than exemplary damages.

How do I allege damages in my lawsuit?

In pleading damages, Plaintiff should plead sufficient facts, in order to give Defendant fair and adequate notice of the damages sought and enough information for Defendant to prepare a defense. Horizon v. Auld 34 SW3d 887 (Tex. 2000). For pleading purposes, actual damages are classified as either direct or consequential. Direct damages are also sometimes called “general damages”, and consequential damages called “special damages”. General damages are further defined as: those that are the necessary and usual result of the Defendant’s wrongful acts. Plaintiff need not plead general damages. Special damages are those that result naturally but not necessarily from Defendant’s wrongful acts. Special damages must be foreseeable, not too remote or uncertain, and must be plead. Although general damages do not need to be specifically plead, if Plaintiff pleads special damages, but not general damages, then Plaintiff’s right to recover general damages may be waived. Weingartens, 461 SW2d 260 (Houston 1970). Also see Texas Rule 56 which requires special damages to be plead.

How do I come up with the “amount” of damages?

Although under Texas Rules, a Plaintiff is not required to plead the measure of damages, and need only allege sufficient facts to stated cause of action from which the court and determine the proper measure of damages, the new Texas Rules of Civil Procedure requires certain pleading requirements or the court may kick back the petition. Under Rule 47, if Plaintiff is pleading unliquidated damages, Plaintiff must only plead that they are within the jurisdictional limits of the court. Nominal and exemplary damages are considered special damages, and must be specifically pleaded. (read the new Rule 47, or your pleading will be kicked back by the Court Clerk to be refiled).

What if I think of more damages after the trial is over?

Under the One Satisfaction Rule, even though a party is entitled to sue and seek damages on alternative theories of liability, Rule 48, the One Satisfaction Rule prevents a Plaintiff from receiving a double recovery under a multiple theories of liability, regardless of the number of theories of liability pleaded Galle, Inc. v. Pool 262 SW3d 564 (Austin 2008). Therefore, a judgment which awards damages on more than one theory may stand only if the theories arise from separate and distinct injuries, and such damage findings are entered on each theory. Under the One Satisfaction Rule, several recent cases have addressed the number of theories of liability pleaded: Lundy v. Masson, 260 S.W.3d 482 (Houston 2008); Birchfield v. Texarkana Memorial, 747 S.W.2d 361 (Tex. 1987). In the Lundy case, the Plaintiff received what amounted to a double recovery, because the attorney did not distinguish between damages which were cause by fraud, and damages which were caused by Defendant’s breach of fiduciary duty. Again, the court’s focus is the judgment awarding damages on more than one theory. The court looks at if the theories arise from separate and distinct injuries, have separate and distinct damages been testified about, and if so, the appellate court will not overrule a judgment which lists and itemizes the separate damages for the separate theories of liability.

Under the Collateral-Source Rule, payments made to, or benefits conferred upon, a Plaintiff from sources other than the Defendant, are not credited against the Defendant’s liability, even if they cover all or some of the damages for which Defendant is liable. This rule, therefore, is an exception to the One Satisfaction Rule. Taylor v. American 132 SW3d 613 (Houston 14th 2004) The policy of this rule is to make the Defendant completely responsible for its wrongful actions, even if it may sometimes result in a windfall for the Plaintiff. The courts consider it more appropriate that the Plaintiff benefit from a windfall than the Defendant. This rule applies to both contract and tort actions. The Texas legislature tried to repeal certain aspects of the Collateral-Source rule in 2003, but none of the proposed amendments passed. The Collateral-Source rule is actually a rule of evidence. Therefore, it prevents a Defendant from introducing evidence of benefits which were received by the Plaintiff from outside sources. One exception to the evidence rule would be if evidence of Collateral-Source benefits are offered for impeachment purposes, in response to Plaintiff’s testimony, that is inconsistent with the receipt of benefits. Examples of this rule include evidence of receipt of insurance benefits, governmental assistance, tax deductions, or gratuitous services.

Aren’t we talking mostly about damages under a contract?

Another rule for measuring damages for contractual injuries is called Expectancy Damages, also known as Benefit of the Bargain. Generally, Plaintiff can recover damages for its expectation interest in the contract. These damages give Plaintiff the benefit of its bargain on the theory that it puts Plaintiff in the same economic position it would have occupied had the contract been performed. Sharifi v. Steen 370 SW3d 126 (Dallas 2012). The loss in value of the Defendant’s performance is sometimes characterized as Plaintiff’s anticipated receipts under the contract. Because the difference between what Plaintiff expected, and what Plaintiff actually received can be demonstrated in several different ways, no single formula can be written to cover every type of breached contract. To prove Expectancy Damages, Plaintiff can offer its own testimony, or the testimony of an expert witness, about the loss in value or consequential losses.

What about my lost profits?

Lost profits are a category of damages that a Plaintiff can recover if it can show damages that were lost as the natural and probable consequence of the breach. These anticipated profits cannot be recovered if they depend on uncertain and changing conditions such as market fluctuations or business risks, or if there is no evidence introduced from which profits can be estimated. Hernandez v. Sovereign 343 SW3d 162 (Dallas 20111) Plaintiff’s evidence should also allow for any expenditure it would have had to make in completing the contract. Lost profits must be specifically pleaded. Lost profit evidence must show the amount of the loss by competent evidence and with reasonable certainty. ERI Consulting v. Swinnea 318 SW3d 867 (Tex. 2010).