Holcroft v. Missouri-Kansas-Texas R. Co.

• Decision Date: 01 May 1980
• Docket Number: No. KCD 30423.,KCD 30423.
• Citation: 607 S.W.2d 158
• Parties: John S. HOLCROFT, Jr., Respondent, v. MISSOURI-KANSAS-TEXAS RAILROAD COMPANY, Appellant.
• Court: Missouri Court of Appeals

607 S.W.2d 158

John S. HOLCROFT, Jr., Respondent, v. MISSOURI-KANSAS-TEXAS RAILROAD COMPANY, Appellant.

No. KCD 30423.

Missouri Court of Appeals, Western District.

March 3, 1980.

Motion for Rehearing and/or Transfer Denied April 7, 1980.

Application to Transfer Denied May 1, 1980.

Daniel M. Dibble, Kansas City, for appellant.

Clyde G. Meise, Mark A. Thornhill, Meise, Cope & Coen, Kansas City, for respondent.

Before WASSERSTROM, C. J., Presiding, and WELBORN and MURPHY, Special Judges.

Motion for Rehearing and/or Transfer to Supreme Court Denied April 7, 1980.

J. DONALD MURPHY, Special Judge.

Plaintiff obtained a verdict for $1.00 nominal damages and $75,000 punitive damages against the defendant railroad for failure to comply with the service letter statute, Section 290.140, RSMo 1978. Defendant on this appeal contends that the trial court erred in submitting the issue of punitive damages to the jury without either a submission and finding of actual malice or proof of substantial actual damages or other injury. Defendant contends alternatively that the punitive damage award is grossly excessive.

Plaintiff was employed on March 13, 1964, by defendant railroad as a special agent at a salary of $405.00 per month. His previous employments included jobs as an insurance investigator and deputy sheriff. His duties with the railroad were essentially those of a railroad detective—to investigate and attempt to prevent thefts of railroad property and property being shipped by rail. In this connection, he worked with the Federal Bureau of Investigation and, in particular, an agent named Alan Rotton who became his personal friend. Plaintiff was stationed at the Kansas City terminal.

From the date of plaintiff's employment in March 1964, until the year 1974, plaintiff performed his duties as a special agent to the reasonable satisfaction of his employer. He received several increases in pay and at the date of his termination in 1975 his salary was $880.00 per month. In April 1973, following the successful completion of an investigation of thefts from rail cars near Eve, Missouri, he received a letter of commendation from the vice-president in charge of administration of the railroad for his "excellent work." There was no evidence that at any time during his eleven years with the railroad his personnel file contained any derogatory information.

In October 1971, Mr. Gene Bolin was hired by the railroad to serve as a special agent for eastern Missouri. He was interviewed and recommended for the position by plaintiff. In May 1973 Bolin was promoted to the job of chief special agent and became plaintiff's immediate supervisor. His office was in Denison, Texas. Bolin testified that plaintiff had wanted the job as chief special agent and had expected to be appointed. Plaintiff, however, testified that he had not been interested in the promotion because it required his transfer to Denison and entailed a salary increase of only $45 per month.

In 1974, plaintiff, working with FBI agent Rotton, commenced an investigation of grain thefts from the railroad yards in Kansas City, Kansas. Mr. William Ziedel, a vice-president of the railroad with administrative supervision over the special agents, approved the investigation and told plaintiff to keep him "directly informed." Ziedel's office was in Dallas, Texas. Plaintiff testified that he was instructed by Ziedel not to make reports to Bolin but to submit a written report to Ziedel after the investigation was completed. Ziedel, however, testified that he did not tell plaintiff to bypass Bolin and had assumed that he and Bolin would both receive interim reports, oral and written, as the investigation continued. Ziedel testified that he was "in fairly constant communication" with plaintiff about the progress of the investigation but did not receive any written reports. Bolin, too, received telephone reports from plaintiff at his office in Denison. Plaintiff testified that Ziedel seemed "well pleased" with the progress and results of the investigation.

It is clear from the testimony of both plaintiff and Bolin that beginning in 1974 the personal and business relations between plaintiff and Bolin became strained.

In the summer of 1974, during the course of the grain investigation, it became known to agent Rotton that two employees of defendant named Doyle, a terminal superintendent, and DeVeney, a chief clerk, had, a year or so previously, falsified some railroad payroll records. The railroad had handled the matter administratively and, after a formal hearing, had discharged the offenders and subsequently rehired them without restoration of back pay (the railroad suffered no pecuniary loss as a result of the falsifications). Rotton decided to seek prosecution of Doyle and DeVeney in the federal court and asked plaintiff to help him in the investigation. Plaintiff agreed and advised his superiors of the proposed investigation. They—Ziedel and Bolin—did not express any objection.

Early in the investigation it occurred to plaintiff that his participation in the ongoing investigation of Doyle and DeVeney might create trouble for him with his employer because Doyle and DeVeney were in "top positions" and might cause "repercussions." He decided to seek letters of recommendation from railroad officials to protect himself in the event his job was put in jeopardy. He therefore in July 1974 requested and obtained recommendations from several officials of the railroad, including Ziedel and Bolin. Plaintiff told them he wanted the letters because he was seeking other employment—which was not true. All of the letters so obtained referred to plaintiff's association with the railroad in favorable terms and none contained any statement of dissatisfaction with any aspect of his performance. Bolin's letter, although more restrained than the others, stated that plaintiff "during his ten years of service . . . has carried out all assignments called upon to perform" and "he would go to an assignment and the railroad could depend upon him to do the job properly and without problems." At the trial Ziedel and Bolin testified that their letters of recommendation were based upon plaintiff's past service as a special agent, which had been satisfactory, and not upon his performance at the time, which Bolin, at least, considered to be unsatisfactory.

In the fall of 1974 plaintiff and Rotton went to Dallas for a meeting with Ziedel and Mr. R. M. Whitman, president of the railroad. Plaintiff and Rotton testified that Ziedel had arranged the meeting to discuss the grain theft and the Doyle-DeVeney investigations. Ziedel contended that the meeting was requested by plaintiff. At the meeting Whitman expressed concern about Doyle and DeVeney (who by that time had been rehired) and referred to them as "very fine people." In response Rotton told Whitman that they "still were going to be prosecuted."

Thereafter Rotton signed a complaint against Doyle and DeVeney in the federal district court in Kansas City, Kansas, alleging falsification of payroll records. Plaintiff was listed as a witness. On the day following, Bolin telephoned plaintiff from Denison, Texas, and instructed him to contact the FBI and the district attorney's office and attempt to secure dismissal of the charges. He told plaintiff that prosecution would be detrimental to the efforts of the railroad to successfully complete pending applications for loans with the federal government. Plaintiff testified that Bolin threatened him with loss of his job if he failed to cooperate. He testified that Ziedel in the same telephone conversation likewise urged him to attempt to get the charges dismissed, saying that the prosecution "would in no way benefit the railroad." Ziedel denied participating in the conversation. Bolin admitted that the conversation took place between him and plaintiff, but denied that he threatened to discharge plaintiff. Plaintiff testified that he made no attempt to get the charges dismissed because he considered such an effort to be an obstruction of justice. Rotton, when told of the telephone call, advised plaintiff to make a written record of the incident for submission to the United States attorney as a possible violation of the federal statute on obstruction of justice.

On April 28, 1975, Doyle and DeVeney pleaded guilty in the United States district court to misdemeanor charges and received suspended sentences. On the same day and after the pleas of guilty were entered Bolin handed plaintiff a letter of termination signed by Bolin which stated in part:

"Your employment as a Special Agent, from the time I have been in charge of this department, has been inadequate and completely unsatisfactory, in that you have failed to perform the duties requested of you and you have neglected to keep me informed on matters that have occurred in the Terminal at Kansas city, that I should have been made aware of."

Bolin testified that he had decided in early 1974 to terminate plaintiff, but on the advice of Ziedel had deferred firing him because of plaintiff's involvement in the grain theft and the Doyle-DeVeney investigations. Ziedel testified that he had concurred in the decision to terminate plaintiff.

In July 1975 plaintiff requested a service letter from the defendant railroad. The reply from the personnel manager merely stated that Bolin's letter of April 28 gave the reason for plaintiff's discharge.

Plaintiff was unemployed for eleven months following his termination. He eventually obtained a job as a deputy sheriff at a salary of $500 per month. At the trial he offered no evidence to prove that the service letter contributed to his unemployment or to his loss of income. Prior to trial counsel stipulated as follows:

"MR. DIBBLE: . . . As I understand it, counsel for plaintiff is not contending and does not intend to prove any actual damages, even if there is shown to be a violation of the service letter statute, other than the one

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