City of Ingleside v. Kneuper

• Decision Date: 29 March 1989
• Docket Number: No. 3-88-138-CV,3-88-138-CV
• Citation: 768 S.W.2d 451
• Parties: The CITY OF INGLESIDE, Texas, Appellant, v. George KNEUPER, Appellee.
• Court: Texas Court of Appeals

Page 451

768 S.W.2d 451

The CITY OF INGLESIDE, Texas, Appellant, v. George KNEUPER, Appellee.

No. 3-88-138-CV.

Court of Appeals of Texas Austin.

March 29, 1989.

Rehearing Denied May 3, 1989.

Frank E. Weathered, Brin & Brin, Corpus Christi, Robert D. Stokes, Flahive, Ogden & Latson, Austin, for appellant.

Thomas R. Hays, Gary, Thomasson, Hall & Marks, Corpus Christi, for appellee.

Before SHANNON, C.J., and EARL W. SMITH ^* and JONES, JJ.

JONES, Justice.

This appeal arose out of a suit filed by George Kneuper, appellee, under what has been dubbed the Texas "Whistleblower Act," Tex.Rev.Civ.Stat.Ann. art. 6252-16a (Supp.1989), after he was fired from his job as Director of Public Works for the City of Ingleside, appellant. The trial court initially reinstated Kneuper to his job through the granting of a temporary injunction. Following a trial on the merits in which the jury answered all questions in Kneuper's favor, the trial court granted judgment for Kneuper for damages and permanent injunctive relief. We will modify the judgment and affirm it as modified.

On March 10, 1987, Kneuper reported to the Texas Rangers what he believed to be criminal activity in connection with building inspections and the City's former building inspector, who had already been fired at the time of the report. On March 27, Kneuper was terminated by the city manager. At trial, the City argued that Kneuper had been terminated for negligence in the performance of his duties, insubordination, and the willful violation of personnel rules and regulations. Kneuper contended that he had been fired for reporting the violations of law.

The Whistleblower Act provides as follows, in pertinent part:

Sec. 2. A state or local governmental body may not suspend or terminate the employment of, or otherwise discriminate against, a public employee who reports a violation of law to an appropriate law enforcement authority if the employee report is made in good faith.

* * *

* * *

Sec. 4. (a) A public employee who sues under this Act may recover:

(1) actual damages;

(2) exemplary damages;

(3) costs of court; and

(4) reasonable attorney's fees.

(b) In addition to amounts recovered under Subsection (a) of this section, a public employee whose employment is suspended or terminated in violation of this Act is entitled to:

(1) reinstatement in his former position;

(2) compensation for wages lost during the period of suspension or termination; and

(3) reinstatement of any fringe benefits or seniority rights lost because of the suspension or termination.

Excluding sub-questions relating to attorney's fees, which are not in dispute, the jury answered the following questions:

QUESTION 1

Was George Kneuper's report of a violation of law by Keith Eppard to the Texas Ranger the reason or one of the reasons that the City terminated George Kneuper's employment? ¹

Answer: Yes

QUESTION 2

Was George Kneuper's report of a violation to the Texas Ranger made in good faith?

You are instructed that "good faith" means honesty in fact in the conduct concerned. You are to consider George Kneuper's actual belief as long as that belief was not unreasonable.

Answer: Yes

QUESTION 3

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 George Kneuper for damages sustained as a result of the city's termination of George Kneuper's employment?

Consider the following elements of damages, if any, and none other:

(a) Mental anguish and suffering in the past.

Answer: $50,000

(b) Mental anguish and suffering which, in reasonable probability, he will suffer in the future.

Answer: $36,000

(c) Loss of earnings in the past.

Answer: $600

(d) Loss of earning capacity which, in reasonable probability, he will suffer in the future.

Answer: $75,000

(e) Retirement and other employees benefits to which George Kneuper would have been entitled had he continued to work for the City of Ingleside, Texas.

Answer: $108,000

QUESTION 4

What sum of money, if any, do you find from a preponderance of the evidence that George Kneuper should be awarded against the City 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 damages in response to QUESTION 3.

Answer: $300,000

On the basis of these answers, the trial court awarded Kneuper judgment for $344,600 actual damages (which included attorney's fees through trial), $300,000 exemplary damages, prejudgment interest, and appellate attorney's fees, and permanently enjoined the City from terminating Kneuper's employment for any conduct occurring prior to the date of the judgment.

In five points of error, the City attacks the judgment for failing to submit, as a predicate to the award of exemplary damages, a question inquiring whether the City acted with malice; for awarding Kneuper a total of $183,000 for future economic loss while at the same time enjoining the City from terminating his employment; for having legally and factually insufficient evidence to support the jury's answers to questions 3(d) and 3(e), regarding future economic loss; for having legally and factually insufficient evidence to support the jury's answers to questions 3(a) and 3(b), regarding past and future mental anguish; and for having legally and factually insufficient evidence to support the jury's answer to question 4, regarding exemplary damages.

The City's first point of error raises the issue whether the Act requires, as a prerequisite to an award of exemplary damages, a finding that it acted with malice in terminating Kneuper's employment. Our primary goal in resolving this issue is the search for the Legislature's intent, which we must, if possible, determine from the language of the Act itself. Crimmins v. Lowry, 691 S.W.2d 582 (Tex.1985). Kneuper suggests that the language of the Act is clear and unambiguous. Because malice is not expressly stated to be a prerequisite to an award of exemplary damages, he argues that it is not required. A proper analysis, however, is not so simple.

In order to ascertain legislative intent, a statute will be construed in the light of the entire body of law existing at the time of its enactment, including the common law. In re Estates of Carrigan, 517 S.W.2d 817 (Tex.Civ.App.1974, no writ). See generally 2A Singer, Sutherland Statutory Construction § 50.01 et seq. (4th ed. 1984). From the earliest Texas cases in which exemplary damages were recognized, extraordinarily reprehensible conduct has been required. See Demarest, The History of Punitive Damages in Texas, 28 S.Tex.L.Rev. 535 (1987). Possibly the first such case in Texas was Graham v. Roder, 5 Tex. 141 (1849), in which the Supreme Court held:

Where either of the elements of fraud, malice, gross negligence, or oppression "mingle in the controversy, the law, instead of adhering to the system or even the language of compensation, adopts a wholly different rule. It permits the jury to give what it terms punitory, vindictive, or exemplary damages; in other words, blends together the interests of society and the aggrieved individual, and gives damages not only to recompense the sufferer, but to punish the offender. This rule seems settled in England and the general jurisprudence of this country."

Id. at 149 (quoting from Sewg.Meas.Dam., at 38-9). Two years later, the Supreme Court again approved the recovery of exemplary damages if the injury was "tainted with fraud, malice, or willful wrong." Cole v. Tucker, 6 Tex. 266, 268 (1851). Except for some fluctuations in the definition of "gross negligence," culminating in the Supreme Court's decision in Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex.1981), the prerequisites are essentially the same today. See, e.g., Dennis v. Dial Finance & Thrift Co., 401 S.W.2d 803, 805 (Tex.1966); InterFirst Bank Dallas, N.A. v. Risser, 739 S.W.2d 882, 907-08 (Tex.App.1987, no writ).

Hence, the Legislature's allowance of exemplary damages in the Act must be viewed against the backdrop of a lengthy history, both at common law generally and in Texas, of requiring malice, fraud, a willful and wanton act, or gross negligence as a prerequisite to an award of such damages.

In our view, the failure of the Legislature to expressly list a finding of malice as a prerequisite to a recovery of exemplary damages under the Act is not dispositive. Section 4(a)(1) lists no prerequisites for a recovery of actual damages either, but there is little doubt that such damages would not be recoverable without a finding that they resulted from or were proximately caused by a violation of the Act. See, e.g., McKinley v. Stripling, 763 S.W.2d 407 (Tex.1989), in which the Supreme Court rejected a similar argument as applied to the Medical Liability and Insurance Improvement Act, Tex.Rev.Civ.Stat.Ann. art. 4590i (Supp.1989):

Although the statute does not mention the term "proximate cause," this is not dispositive of the issue before us. Before the statute was enacted, no one disputes that Texas law required that an issue on proximate causation be submitted. [Citation omitted.] Nothing in the statute subsequently enacted indicates that the legislature intended to eliminate this requirement. In the absence of any legislative history suggesting that juries no longer need to find proximate cause in informed consent cases, the statute's omission of such an element is inconclusive.

As in McKinley, the legislative history of the Whistleblower Act contains no suggestion that the traditional prerequisites for an award of exemplary damages were intentionally or consciously omitted. Accordingly, their omission is not conclusive of legislative intent. Indeed, under Kneuper's construction, section 4(a) of the Act would not even require a violation of the Act to recover exemplary damages, since it states only that a public...