## Facts

- Eli Arnold Ellender worked intermittently from about 1963–1977 as an independent contractor millwright at Mobil’s Beaumont, Texas refinery and chemical plants, repairing and cleaning equipment.
- During this work, Ellender was exposed to benzene and later developed acute myelogenous leukemia; he died in 1989.
- Ellender’s family sued Mobil for negligence, gross negligence, and malice, alleging Mobil failed to warn of benzene risks and failed to protect him from exposure.
- Evidence indicated Mobil knew benzene posed serious health risks, implemented monitoring and protective measures for its employees, but did not extend comparable warnings, monitoring, or protection to independent contractors working in the same facilities.
- The jury awarded approximately $622,000 in actual damages and $6,000,000 in punitive (exemplary) damages.
- Before trial, other defendants settled with plaintiffs for $500,000; the settlement did not allocate the payment between compensatory and punitive damages.
- Mobil sought a $500,000 settlement credit; the trial court denied the request.
- The court of appeals affirmed liability and the punitive award’s factual sufficiency review, but increased punitive damages by $91,555.58 and affirmed denial of the settlement credit.

## Issues

1. Whether legally sufficient evidence supported the jury’s findings of gross negligence and malice justifying punitive damages against Mobil.
2. Whether the court of appeals applied the correct standard in its factual sufficiency review of the punitive damages award.
3. Whether the court of appeals erred by adding $91,555.58 to the punitive damages award in recalculating the judgment.
4. Whether Mobil was entitled to a settlement credit for the $500,000 paid by settling defendants and, if so, how to treat a settlement that did not allocate between actual and punitive damages.

## Decision

- The Supreme Court of Texas held there was legally sufficient evidence to support gross-negligence liability for punitive damages.
- The court held the court of appeals properly conducted factual sufficiency review of the punitive damages award.
- The court reversed the $91,555.58 increase to punitive damages as an erroneous recalculation.
- The court held Mobil was entitled to a settlement credit and that denying the credit was error.
- The case was remanded for the trial court to:
  - allow plaintiffs an opportunity to prove any allocation in the settlement between actual and punitive damages;
  - apply a settlement credit consistent with the court’s opinion;
  - recalculate punitive damages excluding the estate’s actual damages; and
  - recalculate prejudgment interest.

## Legal Principles

- Gross negligence supporting punitive damages requires evidence of an extreme degree of risk and the defendant’s subjective awareness of that risk coupled with conscious indifference to others’ safety.
- Evidence that a defendant knew of a severe hazard, protected its own employees, and failed to warn or protect similarly situated contractors can support findings of gross negligence and punitive damages liability.
- Appellate courts may review punitive damages for factual sufficiency, but any modification must conform to the verdict and proper calculation methodology.
- Under the one-satisfaction rule, a nonsettling defendant is generally entitled to a credit for settlements covering the same injury to prevent double recovery.
- When a settlement does not allocate between compensatory and punitive damages, the burden to prove any allocation rests on the plaintiff; the nonsettling defendant should not bear the consequences of an unallocated settlement.

## Conclusion

The court upheld punitive-damages liability based on legally sufficient evidence of gross negligence tied to benzene exposure risks but corrected errors that increased the punitive award and required application of a settlement credit unless plaintiffs proved a different allocation of the settlement proceeds.


Mobil Oil Corp. v. Ellender, 968 S.W.2d 917 (Tex. 1998)