*1 Physio, Ltd., GP, INC., PHYSIO Saadat, and Shawn
Saadat, Appellants NAIFEH, Appellee.
Natalie 14-08-00017-CV.
No. Texas, Appeals of
Court of (14th Dist.).
Houston
Feb. Adams, Houston, appel- WM for
Leslie lants. Houston, appellee. D. King,
Lindа Justices YATES Panel consists of Senior Justice HUDSON SULLIVAN and (dissenting).* OPINION MAJORITY YATES, B. LESLIE Justice. Tanja Saadat and Shawn Appellants appeal1 judgment Saadat the trial court’s holding individually firing them liable for appellee Natalie Naifeh the sole reason * Hudson, Therefore, appeal. Harvey silting pursue their we Senior J. otherwise Justice assignment. prosecution. appeal their for want of dismiss Tex.R.App 42.3(b). GP, P. Physio, Physio Inc. and Ltd. filed appeal noticе but did not file briefs *2 further, illegal act. perform any that she refused to case on based lack of re Serv., Hauck, See Sabine Pilot Inc. v. 687 sources pay attorney. to their The case (Tex.1985). trial, Because we proceeded S.W.2d ato bench and the trial hold that the Sabine Pilot doctrine should court that found Naifeh was solely fired on impose liability not be extended to indi- perform for refusing illegal act. The than plaintiffs vidual rather court damages trial assessed attor employer, we reverse and render. ney’s against fees jointly all defendants severally exemplary damages sep BACKGROUND Ltd., arately against Saadat, Physio, Tanja (collec- GP,
Physio Physio, Inc. and Ltd. and Shawn Saadat. The ap Saadats now tively “Physio”) operated occupational peal. physical therapy clinic. The Saadats Physio. began working own Naifeh ANALYSIS Physio in therapist 2003 as а and was fired issue, In their first argue the Saadats
in 2005. her The reason for termination is that the trial court in holding erred them litigation. the crux of this Naifeh claims personally liable for the Sabine Pilot viola- consistently falsify- Saadat was argues, tion. Naifeh and the trial court ing patient Naifeh’s treatment documents agreed, that in a setting, individ- to include additional services that were not uals liable for their own performed thereby obtain higher pay- tоrts, including wrongful discharge under ments Naifeh repeatedly from insurers. Sabine Pilot. We review trial court’s sign refused to these altered treatment legal conclusions de novo. BMC Software eventually documents and was fired. The Belgium, Marchand, N.V. v. they Saadats assert fired her for various (Tex.2002). infractions, performance unau- including patient thorized treatment on a and misuse employment Texas is an at will time. company Naifeh claims these rеa- state, meaning employment contracts were in an attempt sons manufactured by can be terminated party at will either up terminating refusing cover her for they unless have bargained otherwise. sign off paperwork, on fraudulent which Dutschmann, Fed. Express Corp. illegal she claims was unethical and under (Tex.1993); see also (2006).2 § 18 U.S.C. Int’l, Armijo v. Mazda No. 14-03-00365- CV, Physio Naifeh sued and the al (Tex.App.- Saadats at *3 WL leging wrongful against 27, 2004, termination all de May Houston pet. [14th Dist.] denied) (mem. fendants and that op.) (holding the Saadats were the em that an egos Physio.3 alter ployment agreement trial court at will is an enforce summary granted judgment to the Saadats able contract until terminated either as to alter ego.4 When case was called one party). The common-law exception trial, appeared employment defendants and stat will doctrine set they ed that were not going to defend the forth Sabine Pilot: an cannot relating Physio, regarding Section 1035 criminalizes tract behavior with but issue to, among things, other false statements re- brought appeal. claim has been garding health care made connection with payment for health care benefits. challenged appeal 4. Naifeh summary judgment trial alter court's on her alleged 3. Naifeh also that the Saadats tor- ego allegation. tiously intеrfered with her con- pro ther reason of reason for the sole employee fire an mak illegal act. 687 and better decision motes deterrence refusing perform Supreme wrongdoer Court it The Texas allows active at 735. because *3 public Bo promote directly responsible. tort created this to be held employee from be preventing F.Supp. an 694 policy Mgmt. Corp., of E. recki v. Int’l keeping his to choose between 47, (D.N.J.1988); Jasper, forced at 764 N.W.2d 59 liability. See Win criminal job facing 776. Co., Publ’g 795 Chronicle
ters v. Houston
(Tex.1990);
Pilot,
723,
analysis and
724
Sabine
with this
disagree
We
The issue of whether
that
holding
at 735.
persuaded by
are
courts
individual,
opposed
employer,
to the
as
in such
inappropriate
is
liability
an
individual
a
liable for Sabine
be held
can
relation
employment
The
circumstances.
appears to be an issue of
violation
Pilot
wrongful
in
ship
duty
source of the
is the
party
in
impression
Texas. Neither
first
as
Pilot. See
discharge torts such
Sabine
point
cases that are on
any
identified
Cal., 44
Miklosy
Regents
v.
Univ.
of
of
issue,
or
in the trial court
either
this
690,
876,
P.3d
Cal.Rptr.3d
80
188
Cal.4th
However,
other states
court.5
several
Albertson’s,
629,
(2008);
Schram
644-45
of
lia
issue
individual
have addressed
483,
Inc.,
415, 934 P.2d
490-91
Or.App.
146
tort
their
of a
of
bility under
version
(1997).
ex
relationship
employment
The
public
discharge in violation of
wrongful
em
only
employer
ists
bеtween
policy.
even
employees,
two
ployee, not between
supervi
is a
employees
when one of those
liabili
states allow individual
Some
Miklosy, 80
owner. See
sor or even the
are liable for
reasoning that individuals
ty,
644-45;
690,
at
188 P.3d
Cal.Rptr.3d
torts,
acting on
agents
even
their own
Maint., Inc., 182
Plant
Buckner
Atl.
See, e.g.,
employers.
of their
Jas
behalf
565,
12,
596,
N.E.2d
Ill.2d
230 Ill.Dec.
694
Nizam, Inc.,
per
764 N.W.2d
v. H.
(1998); Schram,
at 490-91.
569
934 P.2d
(Iowa 2009); Ballinger v. Del. Riv
775-76
hire
Only
employer
power
has the
Auth.,
A.2d
172 N.J.
er Port
fire,
merely
exercise
supervisors
(2002);
v. First Nat’l Bank
Harless
110-11
employer’s
behalf. See
power
Fairmont, 169
289 S.E.2d
W.Va.
at
Miklosy,
Cal.Rptr.3d
(1982).
According
their log
Dist.,
644-45;
Park
Waukegan
Smith v.
ic,
be
can
liable
employees
therefore
Ill.Dec.
896 N.E.2d
231 Ill.2d
any
the same as
Sabine Pilot violation
(2008); Schram, 934 P.2d at
See,
e.g., Jasper, 764 N.W.2d
other tort.
cannot,
110-11;
employees
in their
775-76;
Corporate
490.
Ballinger, 800 A.2d at
at
Harless,
They
wrongfully discharge
personal capaсity,
at 698-700.
fur-
289 S.E.2d
holding
government
offi-
argues that
cases from the First
the court's
5. Naifeh
two
“suggest
capacity
Appeals
of
in their official
Court
individual
cannot
sued
cials
in vio
can be liable for
termination
sovereign immunity. See S.W.3d
because
necessity
Pilot without the
lation of Sabine
only
Nguyen
wheth-
at
issue
was
showing
ego
was
the individual
the alter
constructively
employee
was
dis-
er
University
citing
company,”
Texas
bring
charged
fired
still
rather than
could
Hohman,
ployers will is an Sabine Pilot extreme wrong agents to deter ly specific exception and narrow to the *4 authority. doctrine, fully exercising termination See at employment will and both the Buckner, 596, at 230 Ill.Dec. 694 N.E.2d Supreme Texas and this court Court have responsibility 570. Fear of financial for a consistently rejected attempts to expand potential discourage supervi lawsuit could scope. its Ed Rachal Found. v. D’Un (Tex.2006); terminating employees legiti sors from ger, 207 S.W.3d Baird, Co., mate situations. Reno 18 Mayfield Eng’g v. Lockheed & Scis. Cf. (Tex.App.-Houston Cal.4th 970 S.W.2d (1998) (analyzing supervisor lia denied); pet. see [14th Dist.] also statute). Buckner, bility under state discrimination 230 Ill.Dec. 694 N.E.2d at Moreover, it can be difficult to deter remedy against Naifeh Physio,7 568. has scope mine—or limit in individuals expanding impose Sabine Pilot indi —-the might be held accountable for a deci liability against vidual the Saadats is more particularly sion to terminate. This is true appropriately the task of the Texas Su corporate involving in a environment preme Legislature. or the Texas Court evaluation of and collec group Rachal, 333; See Ed 207 S.W.3d at Melen decisionmaking tive for terminations. See Corp., dez v. Exxon id. at 1346-47. (Tex.App.-Houston no [14th Dist.] Mayfield, pet.); 970 S.W.2d found, argues,
Naifeh and the trial court liability appropriate is because indi finding ego, Absent a of alter we con- are liable for their own torts in the viduals finding clude that the trial court erred in corporate setting. See Walker that the Saadats were liable on Anderson, (Tex.App.- 232 S.W.3d Naifeh’s Sabine Pilot claim. sustain We Loiseau, no pet.); Dallas Ennis v. issue. the Saadats’ first We need (Tex.App.-Austin issues, reach the Saadats’ other two which However, pet.). these cases involve challenge validity of a Sabine Pilot torts such as fraud that can be committed claim in these circumstances on other Ennis, by an individual.6 See 164 S.W.3d reverse the trial court’s grounds. We purpose at 700-01. The of individual lia and render judgment against the Saadats bility corporate setting prevent in the is to judgment nothing against that Naifeh take using an individual from them. agency
structure or law as a blanket HUDSON, Justice, Senior liability insulate himself from for his other J. HARVEY Walker, dissenting. tortious wise conduct. See liability only may pursue their individual
6. We note that the Saadats have been chose to theory. under a Sabine Pilot subject to individual under Texas law legal pursuant to more traditional theories. Indeed, actually judgment Naifeh However, unclear, for that are Naifeh reasons against Physio. cause, will, cause, or no bad good ee at exception to the Pilot1 the Sabine Does County Hosp. to an Montgomery doctrine” extend at all. cause “employment-at-will (Tex. Brown, who is not the em- 965 S.W.2d individual defendant Dist. v. words, 1998). In other plaintiff? definition, ployer employment-at- By individual, еmployer not the who is may an require does not will doctrine dis- be liable plaintiff, of the careful, reasonable, in mak or even to be plaintiff under Sabine charge of Tex. Farm ing its termination decisions. majority answers doctrine? Pilot Sears, Bureau Mut. Ins. Cos. with supports position its negatively and (Tex.2002). 604, 609 How- arguments and authorities. cogent Further, employ- I do not doubt that the ever, acknowledges, this is majority as decidedly benefi- ment-at-will doctrine jurists struggled have on which an issue efficiency. Nor do I dis- cial to economic my the states are divided. Unlike unjustified the notion that fear of pute myself persuaded by a colleagues, I find corporate productivi- litigation cripple authori- contrary opposing rationale and *5 However, Supreme Court ty. the Texas ties. to the exception a common law recognized the could majority argues The Saadats Pi- dоctrine in Sabine employment-at-will wrongful termi- logically not be liable termination is based on an lot when a authority to they had no nation because an act. employee’s refusal to do unlawful majority fire The concludes Naifeh. public of that and its The wisdom decision GP, i.e., Physio Inc. only employers, the are not at issue here. policy ramifications Ltd., power to termi- Physio, and had the exception, it is our Having found such emplоyment. the ra- nate Naifeh’s While court, appellate duty, as in intermediate allure, it rests on a logical tionale has a give application appropriate. it where world, In the real no one legal fiction. by the fact that Naifeh was fired disputes to believe a good There are reasons Moreover, disputes no one Tanja Saadat. employee may be liable his or corporate Only of that termination. the effectiveness termi- capacity wrongful her individual can it be said in the most abstract sense First, intensely person- nation. the tort is Naifeh, fire and it is Tanja did not negligence, It not based on but on al. comfort to her to now learn that little words, malice. In other the intentional intrinsic, authority Tanja had not of termination is gravamen employment. to terminate her mistake, but in corporate found in some majority’s strongest argument, The hatred, uniquely passion human of mind, my specter is that the of individual meanness, revenge. For exam- spite, discourage corporate super- could in this the uncontroverted evidence ple, terminating employees legit- visors Naifeh to case shows asked cases, majority imate situations. in a massive insurance fraud participate by the employer employ- is shielded records reflect- by signing patient scheme The doctrine does ment-at-will doctrine. treatments and services that had never inherent of the right stem from an refused, administered. Naifeh been the absence of a con- employer, but from she was fired. regarding period tractual agreement Thus, campaign The then set out on a may Saadats employment. be credibility profes- employ- destroy or the Naifeh’s by terminated 1985). Serv., Hauck, (Tex. Inc. v. Sabine Pilot Saadats reputation. alleged sional The also filed a claim under Texas Theft had that Naifeh was fired because she Act. Liability treatment
performed unauthorized The Saadats also created multiple false untrue, patient’s allegation knee. The was disciplinary records and submitted them to later at a Texas and the Saadats admitted the Texas Workforce in an Commission hearing they Workforce Commission prevent attempt Naifeh from reсeiving copy prescription, had a authorized unemployment benefits. Finally, the Saa- patient’s physician, for treatment of dats submitted multiple disciplinary false the knee. Physical records Therapy Texas fired, day after Naifeh was the Saa- Board in effort to have profes- Naifeh’s police falsely report alleging dats filed a sional license revoked. Naifeh had stolen documents. The Saa- The tort committеd here is akin to as- dats also a fake manufactured “Confiden- sault, battery, imprisonment, false (with tiality Agreement” Naifeh’s forged other intentional torts. The conduct was signature) stating that “all re- information purposely directed at Naifeh with the de- Physio[’s] day-to-day operation lated to liberate intention inflicting injury regards patient billing information and upon very her. This is the behavior Sa- confidential!,] shall I kept and shall not bine Pilot was to prеvent, intended any any share with information authority restricting there is no Texas lia- patient any Using individual.” the fa- bility solely to the employer. *6 Agreement Confidentiality bricated and notes, report, majority As the police false the Saadats asserted other states have considered, results, against misappropriation claims Naifeh for with mixed whether of proprietary wrongful confidential and information the common law tort discharge of conspiracy misappropriate expose to can a corporate employee per- confiden- to tial proprietary They liability.2 information. sonal view wrongful Some dis- jurisdictions approaches Other take varied scope ed within the or course and of his her See, liability wrongful employment firing claims of individual for employee. another Inc., 751, Nizam, At spectrum, e.g., termination. one of the v. Jasper end H. 764 N.W.2d California, Illinois, (Iowa 2009) recog (holding and Kansas do liability 777 that for the nize liability wrongful-discharge wrongful discharge for claims tort of based on refusal against non-employers. individual See Reno an commit unlawful act can extend to the Baird, 640, 499, v. 18 Cal.4th corporate 76 officers who authorized or directed 1333, (Cal.1998) (holding discharge); 957 Ballinger P.2d 1334 that the v. Del. River Port Auth., 97, (N.J. supervisors may individually not be sued un 172 N.J. A.2d 110 2002) ("[A]n der Employment partic California's Fair personally Hous who individual Act, stating holding ipates wrongful may discharge that this "also in the tort of liable.”); applies wrongful individually Kamensky to common law actions for be held Maint., Indus., Inc., discharge”); Buckner v. Atl. Plant Roemer 1 Pa. D. & C.4th Inc., (1988) (president employer corpo 182 Ill.2d 230 Ill.Dec. 499-500 of (Ill.1998) (no personal subject personal liability N.E.2d 569-70 termi ration is for liability retaliatory discharge nating for of subor a reinstated for worker’s filing compensation dinate for a unеmployment workers' failure to withdraw com an Elevator, claim); claim); Coop. pensation Rebarchek v. Bank Farmers Harless First Nat’l (Kan. Fairmont, 272 Kan. 289 S.E.2d W.Va. 2001) (same). 1982) (W.Va. ("The At opposite discharge end of the to fix serves Iowa, spectrum, Jersey, Pennsylvania, responsibility New on the but this does Virginia recognize personal employee and West lia not mean that who has another bility wrong non-employers obtaining principal protagonist of individual for been the ful employee's discharge termination even when the individual act- would not also be an “at-will” precisely It is because impose indi breach. any other tort and
charge as
“bad
from a
protected
for them own
is not
employee
vidual
termination;
have reasoned
no
Others
because he has
tortious conduct.3
cause”
by the
committed
only
pub-
that the tort
protections; and because
contractual
employed
entity
acts,
legal
or
person
discourage
lic
seeks to
criminal
policy
courts rea
employee.4 “These
terminated
excep-
a narrow
that Sabine Pilot created
employee
or
individual officer
son that an
doctrine.
employment-at-will
tion to
of
commit the tort
a
cannot
corporation
Further,
it
rule in Texas
general
is the
discharge
wrongful
because
corporation’s employee
a
is
authority sepa
no
employee has
officer or
for tortious acts which he directs
liable
exercised on behalf
authority
rate
during
his
participates
employment.
employ
discharge
corporation
Anderson,
Walker
H. Ni
Jasper v.
corporation.”
ee of the
pet.).
(Tex.App.-Dallas
(Iowa
zam, Inc.,
764 N.W.2d
2009).
director,
Thus, they
that “the exis
reason
shareholder or
corporate
A
...
employment contract is
tence of an
wrongfully
terminates
example,
claim
prerequisite
most fundamental
is
interference
employee
liable
tortious
discharge.” Bourque v. Town
con-
corporation’s employment
with the
(D.N.H.1990).
Bow,
F.Supp.
intentional,
willful,
if the
tracts
action is
these
courts
hold
Accordingly,
the actor
advances the interest of
tort
discharge is
“wrongful
corpora-
than the interests of the
rather
corporate setting, not
individu
within a
Skinner, 898
Holloway v.
tion.
Jasper,
al tort.”
764 N.W.2d
(Tex.1995).
Here, the
inferences
and the reasonable
evidence
Texas, however,
tort
the common law
there from would be sufficient to establish
not derived from
wrongful discharge
inten-
Tanja’s actions were willful and
law;
it
neither does
principles of contract
*7
tional,
Physio’s
although
it was not in
employment.
If
a contract of
spring from
refusing
Naifeh
interest to terminatе
termination violates some
employee’s
act, Tanja
in her
for its
commit a criminal
acted
provision, he
sue
contractual
liable.”).
solely
firing
jurisdictions
wheth
die
was an intentional act done
Other
consider
supervisor, agent
protagonist”
coemployee’s
within
or
own
"principal
er
acted
for the
scope
scope
of his own
interest and therefore outside the
course
wrongfully discharging
employ
emрloyment”).
another
when
Mississippi
example,
Supreme
ee.
For
Stores, Inc.,
3.
512 F.3d
individual is
liable
See DeCarlo v. Bonus
Court has held
not
cases);
(5th Cir.2007) (collecting
wrongfully discharging an
actions in
176-77
for his
Elecs., Inc.,
Higgins
217 Ariz.
employee if the individual acted within
v. Assmann
(Ariz.Ct.App.2007); Bal
scope
employment, but it
173 P.3d
458
course and
of his
110-11; Harless, 289
question
linger,
of whether an
800 A.2d at
addressed the
not
at 698-99.
should
held liable
S.E.2d
employ
he
termination if
acted outside his
Carolina,
Hooper
4.
379
v. North
contrary
employer’s
ment
duties
(M.D.N.C.2005)
Stores, Inc.,
F.Supp.2d
814-15
v. Bonus
interests. See DeCarlo
law);
(North
(en banc);
Miklosy
(Miss.2008)
Regents
Carolina
358-59
So.2d
Cal.,
Cal.
Univ.
Cal.4th
Bourgeous
Healthcare
see
also
Horizon
(Cal.
Rptr.3d
Corp.,
P.2d
N.M.
Reno,
2008);
(N.M.1994)
P.2d at
(leaving
question
open "the
1347; Buckner,
Ill.Dec.
N.E.2d
discharge
retaliatory
claim lies
whether a
569-70; Rebarchek,
ations raised in Sabine relieve pressured
“at-will” from being acts,
to eommit criminal would rationally
apply agents. to both the and its pressure against exerted Naifeh to
falsify records was no less intimidating
because it was aby asserted fellow em-
ployee. Tanja the power had to terminate
Naifeh and did so because she would party
become a to a criminal enterprise.
Her very conduct constitutes the essence
of the common law tort created Sabine
Pilot
Accordingly, respectfully I dissent. GONZALEZ-GILANDO,
Jose Ever
Appellant,
The STATE of Texas.
No. 07-09-0290-CR. Texas, Appeals
Court of
Amarillo.
Feb.
Rehearing Overruled March *8 Although question Tanja’s of whether delivery payment in connection with the of or conduct was itself criminal is at in issue for health care imprison- services can face case, civil Tanja's difference between in- up years, ment person to five Physio's easily terests and interests is seen stake, personal makes such a statement sepаrately when one considers the risks and corporate employer, distinct from that of in arising Tanja's benefits to each conduct avoiding detection. A reasonable factfinder (a) documents, (b) altering and in ask- asking therefore could that in conclude Nai- sign Naifeh to the altered documents and records, sign patient Tanja feh to was terminating refusing her for to do It so. acting in her own interest to conceal the fact сonceivably Physio's was financial interests altered, that the docmnents had been so that bills, thus, to inflate its one could make a if it were discovered that were billed insurers argument by altering colorable records by Physio per- for services that were not support billing practices, Tanja used to its formed, appear it would that Naifeh and not acting Physio's was best interests. But responsible. was person because a who makes false statements