Goodman v. Page

Citation984 S.W.2d 299
Decision Date19 November 1998
Docket NumberNo. 2-97-122-CV,2-97-122-CV
Parties137 Lab.Cas. P 58,575 Lee GOODMAN, Jr., Goodman-Wade Enterprises, Inc., d/b/a Creative Living, Lee Goodman Investments, Inc., d/b/a Special Services Management, Appellants, v. Clara PAGE, Appellee.
CourtCourt of Appeals of Texas

Bourland, Kirkman, Seidler & Evans, David Evans, Fort Worth, for Appellant.

Howie & Sweeney, L.L.P., John Howie, Dallas, Holman, Hogan, Dubose & Townsend, Richard P. Hogan, Jr., Houston, for Appellee.

Before DAY, LIVINGSTON, and BRIGHAM, JJ.

OPINION

SAM J. DAY, Justice.

Goodman-Wade Enterprises, Inc., Lee Goodman, Investments, Inc., and Lee Goodman, Jr. 1 appeal an adverse judgment awarding $973,000 in actual damages, punitive damages, and attorney's fees for the wrongful discharge of Clara Page.

We affirm in part, affirm as modified in part, and reverse and render in part.

FACTUAL BACKGROUND

This appeal involves a suit for retaliatory discharge brought under chapter 242 of the Texas Health and Safety Code against Goodman-Wade Enterprises, Lee Goodman Investments, and Goodman. Goodman owned a complex network of companies doing business in the health care industry in fourteen states. In Texas, Goodman owned six corporations that owned or operated group homes for mentally disabled individuals, including Goodman-Wade Enterprises and Lee Goodman Investments. Goodman-Wade Enterprises owned and operated group homes in the Palestine area. Lee Goodman Investments provided management services for those homes.

Clara Page began working for Goodman-Wade Enterprises in 1986 as a part-time care provider. By 1988, Page had been named administrator of six group homes in the Palestine region. In 1990, she accepted a position as a member of Lee Goodman Investment's Quality Assurance team, in addition to her administrative role. On March 18, 1993, she was promoted to state administrator over all of Goodman's group homes. Throughout her six-year tenure with the organization, she received numerous bonuses, commendations, and recognition for her service to Goodman's corporations.

On June 16, 1993, Page filed a report with her supervisor, Peter Maung, regarding allegations of abuse in one of the homes. Goodman fired Page on June 30, 1993. 2 Two days later, the Texas Department of Human Services notified Goodman and his corporations that they were barred from participating in all Medicaid programs for 10 years. Because the overwhelming majority of the residents in Goodman's homes were Medicare or Medicaid patients, this prohibition effectively put Goodman and his corporations that owned the homes out of the mental health care business in Texas. As a result, on August 31, 1993, Goodman's homes were sold to a corporation named Rescare.

On September 16, 1993, Page filed suit against Appellants for retaliatory discharge under section 242.133 of the health and safety code. 3 Following a trial on the merits, a jury found in favor of Page and awarded her $470,000 in actual damages and $225,000 in punitive damages. After the parties entered a Rule 11 agreement that a forty percent contingency fee was a reasonable and necessary amount of attorney's fees, the trial court awarded Page an additional $278,000 in attorney's fees.

On appeal, Appellants contend that (1) the evidence was legally and factually insufficient to support the jury's award of $470,000 in actual damages, (2) they were statutorily exempt from liability under chapter 242 of the health and safety code, (3) the evidence was legally insufficient to support the jury's implied finding that Appellants were the owners or employees of an "institution," (4) the trial court erred in holding Appellants jointly and severally liable for $225,000 in exemplary

damages, and (5) the trial court miscalculated the attorney fee.

STANDARD OF REVIEW

In determining a "no-evidence" point, we are to consider all of the evidence in the light most favorable to the party in whose favor the verdict has been rendered, and to indulge every reasonable inference from the evidence in that party's favor. See Formosa Plastics Corp. v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex.1998); Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1799, 140 L.Ed.2d 939 (1998); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951). If there is more than a scintilla of such evidence to support the finding, the claim is sufficient as a matter of law, and any challenges go merely to the weight to be accorded the evidence. See Formosa Plastics Corp., 960 S.W.2d at 48; Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex.1996).

An assertion that the evidence is "insufficient" to support a fact finding means that the evidence supporting the finding is so weak or the evidence to the contrary is so overwhelming that the answer should be set aside and a new trial ordered. See Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We are required to consider all of the evidence in the case in making this determination. See Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex.1998).

LIABILITY UNDER SECTION 242.133

To recover for wrongful retaliation under section 242.133, the plaintiff must prove that (1) the defendant is an institution, 4 or the owner or employee of an institution, (2) the defendant suspended or terminated the plaintiff's employment, or otherwise disciplined or discriminated against the plaintiff, (3) for reporting abuse or neglect of a resident to the plaintiff's supervisors, the department, or a law enforcement agency. See TEX. HEALTH & SAFETY CODE ANN. § 242.133 (Vernon 1992).

In this case, the Appellants do not challenge the sufficiency of the evidence that they terminated Page for reporting the abuse of a resident. Rather, Appellants argue that there is no evidence that Goodman and Lee Goodman Investments were employees or owners of an institution and there is no evidence to show that Page was terminated or otherwise retaliated against by Goodman-Wade Enterprises.

Although Appellants assert different rationales in points four through six for avoiding liability, they contend that the same factual background supports their respective arguments. They concede that Page went to work for Goodman-Wade Enterprises in 1986 and this corporation was the owner of an "institution." But they assert that in March 1993, Page was promoted to state administrator and became an employee of Lee Goodman Investments, which was not an institution or the owner of an institution and thus not within the scope of section 242.133. Furthermore, they contend that Goodman was not the owner or employee of an institution and thus cannot be held liable under the statute. We address each of these contentions separately.

1. Goodman-Wade Enterprises

The record indicates that Page's letter of termination, signed by "Lee Goodman, CEO," was typed on Creative Living 5 letterhead. Moreover, when Page filed a claim for unemployment benefits with the Texas Employment Commission in July 1993, she named Creative Living as the organization for which she last worked, and Bob Upton, managing director of Lee Goodman Investments, signed the notice from the Texas Employment Commission on behalf of Creative Living. Because this constitutes some evidence that Goodman-Wade Enterprises terminated Page's employment, we overrule Appellants' fifth point.

2. Goodman

In their sixth point, Appellants contend that Goodman cannot be liable for retaliatory discharge under section 242.133 because he was not an owner or employee of an institution. This contention is without merit. At trial, Goodman testified that he owned Goodman-Wade Enterprises, which Appellants now concede was an "institution." Moreover, Upton testified that Goodman "did all the talking" in the meeting where Page was fired and that Goodman was the one who ultimately fired Page. This is some evidence that Goodman was the owner of an institution and that he terminated Page's employment. Accordingly, we overrule Appellants' sixth point.

3. Lee Goodman Investments

In their fourth point, Appellants contend that Lee Goodman Investments cannot be liable for terminating Page because it was not the owner of an institution. We agree. The only evidence in the record about Lee Goodman Investments indicates that this corporation merely provided the management services to the homes owned by Goodman-Wade Enterprises. Because there is no evidence in the record that Lee Goodman Investments was an institution or the owner or employee of an institution, we sustain Appellants' fourth point.

B. Statutory Exemption

In their third point, Appellants contend that even if the evidence was legally sufficient to hold them liable for retaliatory discharge, section 242.003 of the health and safety code exempts them from a cause of action brought under section 242.133. 6 However, under Rule 94 of the Texas Rules of Civil Procedure, parties must affirmatively plead any matter constituting a matter in avoidance or an affirmative defense. See TEX.R. CIV. P. 94. A matter in avoidance of statutory liability that is not affirmatively pleaded by the parties is waived. See id.; Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex.1988).

In this case, Appellants did not affirmatively plead the exemption under section 242.003, nor do we find any record reference in Appellants brief where this issue was tried by consent. Indeed, in their motion for judgment N.O.V., Appellants took a contrary position, arguing that none of them were an institution subject to the provisions of chapter 242. By failing to argue in the trial court that they were exempt under section 242.003, Appellants waived this defense and are precluded from raising it for the first time on appeal. See Davis v. City of San Antonio, 752 S.W.2d 518, 519 (Tex.1988); Gilbert v. Smedley, 612 S.W.2d 270, 275 (Tex.Civ.App.--Fort Worth 1981, writ ref'd n.r.e.). Acc...

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