CARNATION COMPANY, Petitioner, v. Willie Ellis BORNER, Respondent.
No. B-8862.
Supreme Court of Texas.
Dec. 10, 1980.
Rehearing Denied Feb. 4, 1981.
610 S.W.2d 450
CAMPBELL, Justice.
The trial court, however, also rendered judgment against Berman and Perry Brothers, Inc. for punitive damages. It rendered judgment for City Products Corporation against those defendants for thirty thousand dollars, and it rendered judgment for Z. S., Inc. for fifteen thousand dollars. The jury made findings that neither City Products Corporation nor Z. S., Inc. had suffered any actual damages, but that the stated amounts should be awarded as punitive damages. When a distinct, wilful tort is alleged and proved in connection with a suit upon a contract, one may recover punitive damages, but even in that instance the complainant must prove that he suffered some actual damages. International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567 (Tex.1963); A. L. Carter Lumber Co. v. Saide, 140 Tex. 523, 168 S.W.2d 629, 631 (1943); Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934); McDonough v. Zamora, 338 S.W.2d 507, 513 (Tex.Civ.App.—San Antonio 1960, writ ref‘d n. r. e.); Briggs v. Rodriguez, 236 S.W.2d 510 (Tex.Civ.App.—San Antonio 1951, writ ref‘d n. r. e.). See also, Southwestern Investment Co. v. Neeley, 452 S.W.2d 705, 707 (Tex.1970); Seegers v. Spradley, 522 S.W.2d 951, 957 (Tex.Civ.App.—Beaumont 1975, writ ref‘d n. r. e.). The court of civil appeals was correct in reversing that part of the judgment.
We examined the other points that Berman and Perry Brothers, Inc. urged in the court of civil appeals to determine if there are factual matters which require our remand of the cause to that court. They have urged a number of factual insufficiency points, but our decision renders all of them immaterial. They are points which complain of the trial court‘s judgment against them for punitive damages, and we have held that neither Berman nor Perry Brothers, Inc. is subject to those damages. That part of the judgment of the court of civil appeals was correct in its reversal of the trial court‘s judgment.
We, therefore, reverse that part of the judgment of the court of civil appeals which dissolved the injunction ordered by the trial court and affirm that portion of the trial court‘s judgment. We affirm that part of the judgment of the court of civil appeals which reversed the trial court‘s judgment for punitive damages in favor of City Products Corporation and Z. S., Inc. Since both petitioners and respondents have in part prosecuted their appeals with effect, one-half of the costs in the trial court and on appeal are adjudged against City Products Corporation, Z. S., Inc., and A & I Levy Estates, a partnership. The other half of the trial and appellate costs are adjudged against the Estate of Max Berman and Perry Brothers, Inc. Commercial Standard Ins. Co. v. Ebner, 149 Tex. 28, 228 S.W.2d 507, 511 (1950);
Leebron & Robinson, Laron D. Robinson and W. Michael Leebron, II, Houston, for respondent.
CAMPBELL, Justice.
This is a wrongful termination case. Trial was to a jury which found that Defendant Carnation wrongfully and maliciously terminated its employee, Plaintiff Borner, under
Borner was employed by Carnation for eighteen years from 1955 until his discharge on August 10, 1973. In October 1971, Borner was hit by a stack of falling crates and injured his right shoulder. In March 1973, he reinjured his shoulder when another stack of crates fell on him. Following his 1973 injury, Borner was absent from work until May 14, 1973, when he returned to work with a full release to “return to regular duty” from his physician, Dr. Donald Nowlin. Borner worked full time at his same job as a milk-loader from May 14, 1973 until his termination.
Subsequently Borner filed a worker‘s compensation claim for both injuries. The claim was settled by a compromise settlement agreement which was approved by the Industrial Accident Board on August 8, 1973. Carnation terminated Borner on August 10, 1973, stating that he was “Physically unable to perform assigned work.” Borner had been back on the job since May 14, 1973, with no complaints filed by Carnation about his job performance.
While employed at Carnation, Borner was a member of a local Union. Carnation and the Union were parties to a collective bargaining agreement which contained a grievance and arbitration procedure. After his discharge, Borner reported the facts of his discharge to his Union which filed a grievance on his behalf with Carnation on August 14, 1973. When Carnation failed to respond, the Union wrote to Carnation on October 4 and December 4, 1973, requesting that Carnation comply with the grievance procedure and reply to Borner‘s grievance. Carnation responded in a letter dated January 2, 1974, which stated:
The company agrees for a period of one (1) year, effective from August 10, 1973, to allow Mr. Borner to return to work at
such time that in our opinion he is physically able to perform heavy duty work.
After Borner received this letter, his Union representative told him to see his own lawyer. The Union did not seek arbitration of Borner‘s grievance and no further action was taken by the Union or Carnation.
In 1975 Borner filed this suit1 claiming that his discharge violated
Section 1. No person may discharge or in any manner discriminate against any employee because the employee has in good faith filed a claim, hired a lawyer to represent him in a claim, instituted, or caused to be instituted, in good faith, any proceeding under the Texas Workmen‘s Compensation Act, or has testified or is about to testify in any such proceeding.
Section 2. A person who violates any provision of Section 1 of this Act shall be liable for reasonable damages suffered by an employee as a result of the violation, and an employee discharged in violation of the Act shall be entitled to be reinstated to his former position. The burden of proof shall be upon the employee.
A jury found that Carnation‘s discharge of Willie Borner violated Article 8307c, Section 1; that no settlement was reached on the grievance filed by Willie Borner; and that Carnation acted willfully and maliciously in discharging or in any other manner discriminating against Willie Borner. The jury awarded damages for lost wages between August 10, 1973 and the time of trial, for loss of wages Borner would probably receive in the future, and for retirement and other employee benefits Borner would have been entitled had he continued to
The questions presented by this case are whether:
- Borner‘s filing of a grievance precludes his filing an Article 8307c suit;
- future damages are recoverable under
Article 8307c ; and - exemplary or punitive damages are recoverable under
Article 8307c .
PRECLUSION OF ARTICLE 8307c SUIT
Section 8.4 of the collective bargaining agreement states:
The Company and the Union shall meet promptly to settle any grievance filed. If they are unable to settle the written grievance within ten (10) calendar days, the Union may invoke arbitration and name its representative. Within five (5) days after the Union has named its representative, the Company shall name its representative, and the two shall attempt to settle the grievance, or to agree on an impartial arbitrator, within five (5) days. (emphasis added).
Under this section, Carnation and the Union were required to meet promptly to settle grievances. However, the Union had the sole discretion to invoke arbitration and neither Carnation nor Borner could participate in that decision.
Carnation contends that Borner‘s filing of a grievance pursuant to the collective bargaining agreement precludes his filing an
Carnation relies upon Thompson v. Monsanto Company, 559 S.W.2d 873 (Tex.Civ.App.—Houston [14th Dist.] 1977, no writ). In that case, Thompson was injured, awarded compensation and discharged. He filed a grievance with the Union which exercised its right to arbitrate the grievance. The arbitrator found that his discharge was justified. Subsequently Thompson filed an
We find that Borner‘s position is distinguishable. Borner filed a grievance pursuant to the collective bargaining agreement. Once the grievance was filed, its processing was under the exclusive control of the Union. No arbitration procedure was invoked by the Union and no final and binding arbitration decision was obtained. No resolution of Borner‘s grievance was ever reached.
Carnation urges that the collective bargaining agreement must be strictly followed. However, it ignored the agreement when handling Borner‘s grievance. Carnation did not meet promptly with the Union to settle Borner‘s grievance. After the grievance was filed, Carnation did not respond for almost five months. In addition, Carnation did not follow its own reprimand procedure before terminating Borner.
Carnation also argues that a settlement was reached on Borner‘s grievance because the Union did not respond to Carnation‘s letter of January 2, 1974. However, the trial court submitted an issue concerning settlement of the grievance and the jury found that no settlement was reached.
The Legislature‘s purpose in enacting
The remedies provided by the collective bargaining agreement and
FUTURE DAMAGES
Special Issue No. 4 provides:
What sum of money, if any, if paid now in cash, do you find from a preponderance of the evidence would reasonably and adequately compensate Willie Borner for damages sustained as a result of the discharge or discrimination, if any, by Carnation Company on or about August 10, 1973?
Consider the following elements of damage, if any, and none other:
- Loss of wages in the past between August 10, 1973 and today.
- Loss of wages, if any, which Willie Borner, will in reasonable probability incur in the future.
- Retirement and other employee benefits to which Willie Borner would
have been entitled had he continued to work for Carnation Company. Answer in Dollars and Cents, if any, to each.
Answer: a. $24,768.00
b. $52,000.00
c. $44,000.00
Carnation‘s only objection made at trial4 which has been preserved for appeal was that future damages are not recoverable under
EXEMPLARY DAMAGES
The trial court submitted the following issue on exemplary damages:
What sum of money, if any, do you find from a preponderance of the evidence that the Plaintiff, Willie Borner, should be awarded against Defendant, Carnation Company, as exemplary damages?
“Exemplary Damages:” means an amount which you may in your discretion award as an example to others and as a penalty or by way of punishment, in addition to any amount which you may have found as actual damages. You may consider compensation for inconvenience and the mental anguish suffered by Willie Borner.
Answer in dollars and cents, if any.
Answer: $60,000.00
Carnation urges for the first time on appeal that exemplary damages are not recoverable because they are not “suffered by an employee.” We cannot consider this argument because included in the definition of “exemplary damages” was the element of “inconvenience and the mental anguish suffered by Willie Borner.” This element was submitted without objection6 and would be within the statutory definition of “damages suffered by an employee.” Because there was no objection to the definition of “exemplary damages,” which included the element of “inconvenience and mental anguish,” we hold that these damages are recoverable.7
The judgments of the courts below are affirmed.
DENTON, J., dissenting in which STEAKLEY, POPE and McGEE, JJ., join.
DENTON, Justice, dissenting.
I respectfully dissent. It is my opinion that the award of exemplary damages under
Section two of
The cases cited by Borner supporting recovery of exemplary damages are distinguishable. K.W.S. Mfg. Co. v. McMahon, 565 S.W.2d 368 (Tex.Civ.App.—Waco 1978, writ ref‘d n. r. e.) was a suit for five percent of the stock of a corporation based on actionable fraud and for wrongful termination of an employment agreement. Exemplary damages were recovered; however, a distinct tort independent of the contract action was involved. The court of civil appeals recognized that exemplary damages cannot be recovered for breach of contract absent an independent tort. Id. at 372.
Pan American Petroleum Corp. v. Hardy, 370 S.W.2d 904 (Tex.Civ.App.—Waco 1963, writ ref‘d n. r. e.), was a suit to recover actual damages for failure to develop a gas lease as a prudent operator, and to recover exemplary damages for misrepresentations, falsifications, and concealment of material facts by the defendant. Both actual and exemplary damages were awarded. The court submitted a definition of exemplary damages which included “compensation for inconvenience, reasonable attorney fees, and other losses too remote to be considered under action damages.” Id. at 908. This is similar to the definition submitted in the instant case. Pan American, however, involved an actionable tort. The present case does not.
Allison v. Simmons, 306 S.W.2d 206 (Tex.Civ.App.—Waco 1957, writ ref‘d n.r.e.), was a usury case involving conspiracy, interlocking ownership, operation of a usurious brokerage device, and unreasonable harassment in collection methods. Actual and exemplary damages were recovered. The same definition of exemplary damages used in Pan American, supra, was submitted. Id. at 211. The court of civil appeals held the definition proper. Again, Simmons involved a distinct and independent tort action.
Although the majority specifically disapproved the trial court‘s definition of “exemplary damages,” it allows recovery of exemplary damages because “there was no objection to the definition of ‘exemplary damages.‘” I strongly disagree. Carnation specifically objected at trial that such element of damages was not recoverable under
I would reverse the judgment of the court of civil appeals and remand the cause to the trial court for proper determination of damages.
Notes
“It is not the position of Carnation that the mere existence of a grievance procedure in a collective bargaining agreement is a bar to an Article 8307(c) cause of action. It is also not the position of Carnation that Borner or any other employee should necessarily be mandated to utilize the grievance procedure of a collective bargaining agreement to resolve issues which may overlap into a statutory cause of action, e. g., an Article 8307(c) cause of action. It is also not the position of Carnation that Federal pre-emption automatically applies in these types of cases.”
The defendant especially excepts and objects to part B in that it allows for a consideration and finding by a jury of loss of wages in the future.
Defendant submits that this is not a proper instruction, based upon evidence that the plaintiff does not wish to be reinstated and that future damages are not recoverable under the Act.
With regard to part C under Special Issue No. 4, the defendant objects and especially excepts on the basis that it allows for a calculation and determination by the jury of retirement and other employee benefits, to which plaintiff would have been entitled had he continued to work for Carnation Company.
Defendant submits that such damages are not recoverable under Article 8307(c), and speculative and not capable of calculation, and constitutes an improper measure of damages in this cause.
“The Defendant objects and especially excepts to Issue No. 5 on the basis that it allows the jury to calculate and to find that Carnation Company, Defendant, may be liable for punitive damages in this cause.
Defendant submits that such elements of damages are not properly recoverable under an 8307(c) action.”