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finding legally sufficient evidence of retaliation
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No. 13-04-015-CV
Memorandum Opinion Delivered and Filed October 27, 2005.
On Appeal from the 23rd District Court of Matagorda County, Texas.
Before Chief Justice VALDEZ and Justices HINOJOSA and RODRIGUEZ.
MEMORANDUM OPINION
All issues of law presented by this case are well settled, and the parties are familiar with the facts. Therefore, we will not recite the law or the facts except as necessary to advise the parties of the Court's decision and the basic reasons for it. See TEX. R. APP. P. 47.4.
This appeal arises from a suit for damages under the anti-retaliation provision of the Texas Workers' Compensation Act. See TEX. LAB. CODE ANN. § 451.001 (Vernon 1996). Appellee, Victor Skrabanek, filed suit against appellant, Celanese Ltd., alleging wrongful termination. See id. After a jury verdict and judgment entered in favor of Skrabanek, this appeal ensued. By four issues, appellant contends the following: (1) the evidence was insufficient to support the jury's finding of wrongful termination and malice; (2) the trial court erred in submitting a spoliation instruction to the jury; and (3) the trial court erred in failing to offset the jury's award of past and future lost earnings by the present value of appellee's pension payments. We affirm in part and reverse and render in part.
I. Background
Appellant determined that appellee had committed multiple safety violations on August 19, 1999, while loading a tanker truck. As a result, on September 22, 1999, appellant placed appellee on Step 3 probation for one year, effective August 19, 1999. On November 23, 1999, appellee filed a workers' compensation claim related to a hearing loss. Appellee was involved in another safety violation on January 19, 2000, and appellant terminated him on January 26, 2000, allegedly based on that violation.
Step 3 probation is the highest level of probation in appellant's discipline policy. A memo written to appellee informing him that he was being placed on Step 3 probation read in part: "It is important to understand that other infractions occurring while this corrective action is in effect are cumulative and may result in the escalation of your Corrective Action up to and including termination."
Appellee's workers' compensation claim was subsequently denied by the third-party administrator reviewing the claim.
II. Sufficiency of the Evidence
Appellant challenges the sufficiency of the evidence as to the jury's finding of wrongful termination and malice by its first and third issues, respectively.
A. Standard of Review 1. Legal Sufficiency
In conducting a legal sufficiency review, we "view the evidence in the light favorable to the verdict, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005). Jurors are the sole judges of the credibility of the witnesses and the weight to be given their testimony. Id. at 819. When there is conflicting evidence, it is the province of the jury to resolve such conflicts. Id. at 820. If conflicting inferences can be drawn from the evidence, it is the province of the jury to draw from it whatever inferences it wishes. Id. at 821. Thus, so long as the evidence falls within a zone of reasonable disagreement, we cannot substitute our judgement for that of the trier-of-fact. Id. at 822.
Moreover, a no-evidence point must be sustained only when the record presents one of the following situations: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of the vital fact. Id. at 810 (citing Robert W. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960)).
2. Factual Sufficiency
In reviewing a factual sufficiency issue, we consider all the evidence, whether it supports or is contrary to the finding. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003); Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). The party challenging the factual sufficiency of a finding on which an adverse party bore the burden of proof must demonstrate that there is insufficient evidence in the record to support the finding. Gooch v. Am. Sling Co., 902 S.W.2d 181, 184 (Tex.App.-Fort Worth 1995, no writ). We set aside the finding based on factual insufficiency only if the evidence supporting the jury's verdict is so contrary to the overwhelming weight of the evidence as to be manifestly unjust and clearly wrong. Mar. Overseas Corp., 971 S.W.2d at 407 (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)).
B. Analysis 1. Wrongful Termination
By its first issue, appellant contends the evidence was legally and factually insufficient to support the jury's finding of wrongful termination. Section 451.001(1) of the Texas Labor Code provides as follows: "A person may not discharge or in any other manner discriminate against an employee because an employee has filed a workers' compensation claim in good faith." Tex. Lab. Code Ann. § 451.001(1) (Vernon 1996). At trial, appellee had the burden to prove that his termination resulted from his filing a workers' compensation claim in good faith. See Cont'l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996). Although the filing of a workers' compensation claim in good faith by an employee need not be the employer's sole motivation for the employee's termination, it must be such that without it the discriminatory conduct would not have occurred when it did. Id. (citing Tex. Dep't of Human Servs. v. Hinds, 904 S.W.2d 629, 636 (Tex. 1995)). An employee can establish a causal connection between the termination and the filing of a workers' compensation claim by either direct or circumstantial evidence. Garcia v. Allen, 28 S.W.3d 587, 600 (Tex.App.-Corpus Christi 2000, pet. denied) (citing McIntyre v. Lockheed Corp., 970 S.W.2d 695, 697 (Tex.App.-Fort Worth 1998, no pet.); Duhon v. Bone Joint Physical Therapy Clinics, 947 S.W.2d 316, 318 (Tex.App.-Beaumont 1997, no writ)). Circumstantial evidence sufficient to establish this causal link may include the following: (1) knowledge of the compensation claim by those making the decision on termination; (2) expression of a negative attitude toward the employee's injured condition; (3) failure to adhere to established company policies; (4) discriminatory treatment in comparison to similarly situated employees; and (5) evidence that the stated reason for the discharge was false. Id. (citing Cont'l Coffee Prods. Co., 937 S.W.2d at 450-51).
Here, it is undisputed that appellee filed a workers' compensation claim on November 23, 1999, approximately two months before he was terminated on January 26, 2000. Appellant contends, however, the evidence does not establish a causal connection between the filing of the workers' compensation claim and appellee's termination. We disagree.
Gail Roberts, appellee's second-line supervisor, testified that when she terminated appellee she had knowledge of the fact that he had filed a workers' compensation claim. See id. at 600 (setting out that direct evidence can establish knowledge of the claim by those making the decision to terminate). Additionally, appellee testified that although he had notified Ira Gordon, his first-line supervisor, of his desire to file a workers' compensation claim on November 9, 1999, and every day thereafter for two weeks, Gordon failed to act on his request. See id. (providing that evidence of a negative attitude toward an employee's injured condition can be established by direct evidence). However, during his testimony, Gordon denied receiving any request from appellee to file the claim. See City of Keller, 168 S.W.3d at 819-21 (holding that it is the province of the jury to resolve conflicts in evidence, to draw whatever inferences it may from conflicting inferences, and to judge the credibility of the witnesses). Furthermore, while Roberts testified that appellee's filing of a workers' compensation claim had no effect on the decision to terminate him, appellee testified that Marilyn Olson, a nurse employed by appellant, informed him during a conversation about the status of his workers' compensation claim that part of the reason for his termination was the fact that he had filed the claim. See Garcia, 28 S.W.3d at 600 (stating that direct evidence may demonstrate that the given reason for the discharge was false). Yet, during her testimony at trial, Olson denied making such a statement. See City of Keller, 168 S.W.3d at 819-21.
Viewing the evidence presented in the record in the light most favorable to the verdict and disregarding all contrary evidence that a reasonable jury could have disbelieved, we find the evidence was legally sufficient to support the jury's finding of wrongful termination. See Ysleta Indep. Sch. Dist. v. Monarrez, 48 Tex. Sup. J. 1014, 2005 Tex. LEXIS 603, at *3 (Tex. Aug. 26, 2005) (per curiam) (citing City of Keller, 168 S.W.3d at 807).
Moreover, we cannot say that the jury's verdict is so contrary to the overwhelming weight of the evidence as to be manifestly unjust and clearly wrong. See Mar. Overseas Corp., 971 S.W.2d at 407 (citing Ortiz, 917 S.W.2d at 772; Cain, 709 S.W.2d at 176). We, therefore, find the evidence was factually sufficient to support the jury's finding of wrongful termination.
Accordingly, we overrule appellant's first issue.
2. Malice
By its third issue, appellant contends the evidence was legally insufficient to support the jury's finding that appellant acted with malice in terminating appellee. We agree.
While an employer's violation of section 451.001 of the Texas Workers' Compensation Act is unlawful, the fact that it is unlawful is not itself grounds for an award of punitive damages. Cont'l Coffee Prods. Co., 937 S.W.2d at 454. Instead, the Texas Supreme Court has held that before punitive damages may be awarded against an employer for violating section 451.001, malice on the part of the employer must be established, so as to ensure that only egregious violations of the statute are subject to punitive damages. Id. In addition, section 41.003 of the Texas Civil Practice and Remedies Code states that to support an award of punitive damages, proof of malice must be shown by clear and convincing evidence. See Tex. Civ. Prac. Rem. Code Ann. § 41.003 (Vernon 1997 Supp. 2004-05).
Because the standard of proof on this issue was elevated at trial, the standard of appellate review must also be elevated. City of Keller, 168 S.W.3d at 817 (citing Southwestern Bell Tel. Co. v. Garza, 164 S.W.3d 607, 627 (Tex. 2004)). In reviewing the legal sufficiency of the evidence relating to malice, which is a predicate to an award of punitive damages, we must consider all the evidence. See id.; In re D.E., 761 S.W.2d 596, 599 (Tex.App.-Forth Worth 1988, no writ) (providing that when a challenge is made to a finding requiring clear and convincing evidence, the reviewing court must consider all the evidence). Evidence contrary to a verdict on an issue of punitive damages cannot be disregarded. City of Keller, 168 S.W.3d at 817.
Although section 41.001 of the Texas Civil Practice and Remedies Code defines malice to mean "a specific intent by the defendant to cause substantial injury or harm to the claimant," TEX. CIV. PRAC. REM. CODE ANN. § 41.001 (Vernon 1997 Supp. 2004-05), which is distinct from actual malice, Southwestern Bell Tel. Co., 164 S.W.3d at 619 n. 13, the jury was asked and instructed as follows:
Do you find by clear and convincing evidence that the harm to Victor Skrabanek resulted from actual malice?
"Clear and convincing evidence" means the measure or degree of proof that produces a firm belief or conviction of the truth of the allegations sought to be established.
"Actual malice" means ill will, spite, evil motive, or purpose to injure another.
Answer "Yes" or "No."
The jury answered "yes" and awarded appellee $300,000 in punitive damages.
Because neither appellee nor appellant objected to the language of the instruction, we assume, in our evaluation of the evidence, the portions of the charge as noted above correctly state the law. See id. (citing Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex. 2001) (stating that the sufficiency of the evidence must be assessed "in light of the jury charge the district court gave without objection")). Therefore, to support an award of punitive damages based on malice in the present case, appellee had the burden of establishing, by clear and convincing evidence, that appellant exhibited ill-will, spite, or a specific intent to cause injury to him. Id.
While appellee asserts that his dignity was impugned by being placed on Step 3 probation, the record shows that appellant's discipline policy allowed for such corrective action to be administered. There is no evidence to suggest that this action was taken with ill-will, spite, or a specific intent to injure appellee. See id. Even though appellee asserts that appellant labeled him a "liar" to support Step 3 probation, the record does not establish that appellant scrutinized him in this manner. Instead, Roberts testified that a factor in placing appellee on Step 3 probation was the determination that he had changed his story concerning the August 1999 incident. Appellee also asserts that appellant's delay in reporting his workers' compensation claim and its failure to preserve notes in appellee's personnel file confirm appellant acted with malice. Again, however, the record does not support this assertion. See id. Moreover, appellant offered testimony that tended to show it did not act with ill-will, spite, or a specific intent to cause appellee injury: Roberts testified that, at appellee's request, his departure was treated as a retirement instead of a termination; she also testified that appellee was allowed to retire with full benefits; and she testified that there was no discussion regarding appellee's termination with other employees within the department.
Therefore, in considering all the evidence, we conclude that appellee presented no evidence that would allow a jury to determine by clear and convincing evidence that appellant acted with actual malice in terminating him. See City of Keller, 168 S.W.3d at 817; In re D.E., 761 S.W.2d at 599. Thus, the evidence was legally insufficient to support a finding of actual malice. Moreover, without evidence of actual malice, appellee was not entitled to an award of punitive damages. Cont'l Coffee Prods. Co., 937 S.W.2d at 454. We sustain appellant's third issue.
III. Jury Charge
By its second issue, appellant contends the trial court erred in submitting a spoliation instruction to the jury and that submission of the instruction harmed appellant. We, however, decline to address appellant's second issue as it is not dispositive of this appeal in light of our disposition of appellant's first and third issues. See Tex.R.App.P. 47.1.
Even if we were to presume error in the submission of the spoliation instruction to the jury, we could not conclude that appellant was harmed by the instruction. See Tex.R.App.P. 44.1.
IV. Damages
Through its fourth issue, appellant argues the trial court erred by failing to offset the jury's award of lost earnings by the present value of pension payments made to appellee by appellant. We disagree.
Section 451.002(a) of the Texas Labor Code states that "[a] person who violates Section 451.001 is liable for reasonable damages incurred by the employee as a result of the violation." TEX. LAB. CODE ANN. § 451.002(a) (Vernon 1996). Here, the jury awarded appellee $182,653 in damages for lost earnings in the past and $129,214 for lost earnings in the future. The parties stipulated that the present value of pension payments made to appellee since his termination is $129,602, while the present value of pension payments to be paid to appellee in the future is $133,975. Appellant asserts that this monthly pension payment to appellee is not a collateral source, and therefore, should be used to offset the lost earnings damages awarded by the jury. Appellant filed a post-trial motion requesting that the jury award of lost earnings be offset by the present value of the pension payments paid in the past and to be paid in the future to appellee; the trial court denied the motion.
The collateral source rule is a rule of both evidence and damages. Taylor v. American Fabritech, Inc., 132 S.W.3d 613, 626 (Tex.App.-Houston [14th Dist.] 2004, pet. denied) (citing Lee v. Lee, 47 S.W.3d 767, 777 (Tex.App.-Houston [14th Dist.] 2001, pet. denied); Exxon Corp. v. Shuttlesworth, 800 S.W.2d 902, 907-08 (Tex.App.-Houston [14th Dist.] 1990, no writ); RESTATEMENT (SECOND) OF TORTS § 920A (1979)). In general, the collateral source rule precludes a tortfeasor from presenting evidence of, or obtaining an offset for, funds received by the plaintiff from a collateral source. Id. "When the defendant tortfeasor is the employer of the injured plaintiff, payments made under an employee benefit plan create a particular puzzle." Id. If the benefit plan is a fringe benefit for the employee, it is viewed as a collateral source with respect to the employer; however, if the benefit plan was purchased for the primary purpose of protecting the employer, then it is not considered a collateral source as to the employer. Id. (citing Tarrant County Waste Disposal, Inc. v. Doss, 737 S.W.2d 607, 611 (Tex.App.-Fort Worth 1987, writ denied); S. Pac. Transp. Co. v. Allen, 525 S.W.2d 300, 306 (Tex.Civ.App.-Houston [14th Dist.] 1975, no writ); RESTATEMENT (SECOND) OF TORTS § 920A cmt. a (1979)).
In the instant case, appellee's pension plan vested after five years of employment with appellant. The pension plan at issue is a defined benefit plan comprised of pooled funds from which appellant pays all qualified retirees their monthly pension benefits. Appellant concedes that the pension paid to appellee is not compensation for injuries to appellee. There is no evidence that the benefit plan was purchased for the primary purpose of protecting appellant. Thus, the purpose of the pension fund at issue is not to protect the employer in the event of liability, but to serve as a benefit for those employees whose plans have vested and who are eligible to retire. The defined benefit plan, for all its purposes, is a fringe benefit; it is a collateral source with respect to the employer. Even though the payments have been made directly by appellant, the monthly pension payments paid by appellant to appellee are considered a collateral source. See id. Therefore, we conclude appellant was precluded from obtaining an offset against the jury's award of lost earnings by the present value of the pension payments to appellee. See id. For these reasons, we overrule appellant's fourth issue.
V. Conclusion
Accordingly, we affirm the judgment of the trial court in favor of appellee's wrongful termination claim and the award of damages for past and future lost earnings. We reverse and render judgment as to appellee's claim of malice and punitive damages and reform the judgment so that appellee take nothing on his claim of punitive damages.