Fuchs v. Lifetime Doors, Inc.

• Decision Date: 30 August 1991
• Docket Number: No. 90-8267,90-8267
• Citation: 939 F.2d 1275
• Parties: Bonnie FUCHS, Plaintiff-Appellant, v. LIFETIME DOORS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1275

939 F.2d 1275

20 Fed.R.Serv.3d 1251

Bonnie FUCHS, Plaintiff-Appellant, v. LIFETIME DOORS, INC., Defendant-Appellee.

No. 90-8267.

United States Court of Appeals Fifth Circuit.

Aug. 30, 1991.

Bill R. Jones, Edward L. Friedman, Hilton Hatchett Howell, Jr., Liddell, Sapp, Zivley, Hill & Labeon, Houston, Tex., for plaintiff-appellant.

Frederick D. Bostwick, III, Naman, Howell, Smith & Lee, Waco, Tex., Allen Butler, David A. Scott, William L. Keller, Clark, West, Keller, Butler & Ellis, Dallas, Tex., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before REYNALDO G. GARZA, POLITZ, and JONES, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Bonnie Fuchs sued her former employer, Lifetime Doors, Inc., for firing her in violation of the Texas Juror Reemployment Statute (TJRS), Tex.Civ.Prac. & Rem.Code. Secs. 122.001-122.002. She sought punitive damages in excess of the damages limitation contained in the statute. Five days before trial, Fuchs sought to amend her complaint to add two more claims arising from her termination by Lifetime. The district court refused to allow the amendment, applied the statutory limitation, and awarded Fuchs $4,940 in damages and $10,000 in attorney's fees. On appeal, we affirm as modified and remand for calculation of prejudgment interest.

Fuchs worked as a secretary for Lifetime. On March 22, 1988, Fuchs was selected as a juror in Robertson County, Texas, and served on a jury for six working days. On March 25, Lifetime informed her that she was fired effective immediately. Fuchs brought suit in state court, and the action was removed to the United States District Court for the Western District of Texas. For purposes of the summary judgment motion, Lifetime conceded that Fuchs was fired for serving as a juror, in violation of the TJRS, and that she suffered actual damages of at least $4,940, the maximum amount to which she was entitled under the district court's construction of the TJRS. Fuchs agrees that her actual damages are limited by the statute to six months' compensation, which in her case was $4,940. For some reason, Lifetime continued to provide Fuchs with medical insurance coverage from March 25, 1988, to the end of November 1989. During this time Fuchs' husband and daughter made numerous claims for medical benefits, which allegedly forced Lifetime to pay higher premiums to its group insurer. On January 17, 1990--about seven weeks after receiving notice that her coverage would be discontinued and only five days before trial--Fuchs sought a continuance and leave to amend her complaint to allege that Lifetime also wrongfully discharged her in order to deprive her of medical benefits. The district court denied this request and entered judgment for Fuchs in the amount of $4,940 as stipulated plus $10,000 in attorney's fees.

I. PUNITIVE DAMAGES

The central issue in this case is whether and with what limitations the TJRS allows the recovery of punitive damages by an employee terminated for serving as a juror. The Texas Civil Practice and Remedies Code provides:

Sec. 122.001. Juror's Right to Reemployment; Notice of Intent to Return

(a) A private employer may not terminate the employment of a permanent employee because the employee serves as a juror.

(b) An employee whose employment is terminated in violation of this section is entitled to return to the same employment that the employee held when summoned for jury service if the employee, as soon as practical after release from jury service, gives the employer actual notice that the employee intends to return.

Sec. 122.002. Damages and Attorney's Fees

(a) A person who is injured because of a violation of this chapter is entitled to damages, but the damages may not exceed an amount equal to six months' compensation at the rate at which the person was compensated when summoned for jury service.

(b) In addition to damages, the injured person is entitled to reasonable attorney's fees in an amount approved by the court.

On its face, Sec. 122.002(a) grants an entitlement to damages to "a person who is injured " (emphasis added). This language lends itself to the obvious interpretation that because damages awarded by the statute are intended to compensate the employee But in this diversity case, we must attempt to construe the TJRS as would Texas courts, and in light of their decisions, the "plain meaning" of Sec. 122.002 turns out not to be so plain. Although no court has decided the precise question before us, the Texas Supreme Court has interpreted a similar statute, the Workers' Compensation Retaliation Statute. ¹ That statute prohibits discharging an employee who files a workers' compensation claim and makes violators "liable for reasonable damages suffered by an employee as a result of the violation." In Azar Nut Co. v. Caille, 734 S.W.2d 667 (Tex.1987), the Texas Supreme Court rejected the argument--similar to the one above--that "reasonable damages suffered " did not include punitive damages, because an employee cannot "suffer" punitive damages. According to Azar Nut, "[t]he term 'damages' standing apart seems to be an unrestricted standard which would allow punitive damages." Id. at 669. As used in Sec. 122.002(a), therefore, it must be inferred that the term "damages" does not restrict the employee to compensatory damages alone. Under governing Texas interpretation, an employee terminated in violation of the TJRS is entitled, in an appropriate case, to punitive damages.

for "injuries," the TJRS does not contemplate punitive damages, which do not compensate. The statute's limitation of damages to six months' compensation seems consistent with this interpretation: the allowable damages relate to the actual losses suffered by the employee when her employment is terminated in violation of Sec. 122.001(a).

We turn now to the second clause of Sec. 122.002(a), which provides that "damages may not exceed an amount equal to six months' compensation." Citing the "intent" of the legislature and "public policy" considerations, Fuchs argues that this limitation should not apply to punitive damages. That is, she would construe "damages" in the first clause differently from "damages" in the second clause. This strains credibility. The statute would read: A wrongfully terminated employee "is entitled to [compensatory and punitive] damages, but the [compensatory] damages may not exceed...." Azar Nut does not dictate this tortured reading. Significantly, the Texas Supreme Court there noted that "[t]he legislature refused to limit the employee's recovery to economic loss alone, therefore a greater measure of damages was obviously intended." 734 S.W.2d at 669. If, in the TJRS, the legislature did not limit an employee's recovery to economic loss alone, it did limit the recovery of actual and punitive damages to six months' worth of the employee's compensation.

This interpretation of the TJRS hardly contravenes the "important public policy" embodied in the statute, as Fuchs urges. Wrongfully terminated employees retain more than enough incentive to enforce the TJRS. Apart from damages, an employee's primary remedy for wrongful termination is reinstatement pursuant to Sec. 122.001(b). Because Sec. 122.002(b) entitles the employee to recover reasonable attorney's fees, her remedy will be costless. Moreover, the employee may, in an appropriate case, recover punitive damages in addition to gaining her job back. If the employee does not return to her former job, the TJRS gives her up to six months to find different employment. If punitive damages are warranted, she may receive the entire six months' worth of compensation even if she finds a new job sooner.

Our interpretation of the TJRS also provides considerable incentive for employers not to terminate employees who must take

time off to serve as jurors. Even where, as in this case, the terminated employee earns near the statutory minimum wage, the employer may be liable for nearly $5,000 in punitive damages. The losing employer must bear the cost of the employee's legal fees as well as its own fees to defend a TJRS enforcement suit. This type of litigation could easily end up costing an unsuccessful defendant as much as $50,000. Few companies would brazenly risk this sum to fire one employee in violation of the TJRS. Fuchs vigorously asserts that unlimited punitive damages would carry an even more potent deterrence. This argument is always true, but it does not detract either from the deterrence that actually exists or from the evident intent of the legislature to fashion a limited remedy for TJRS violations.

II. MOTION TO AMEND COMPLAINT

Fuchs also challenges the district court's denial of her motions to continue the trial, to reopen discovery, and to amend her complaint, which were filed five days before trial. The amendment sought to assert additional claims against Lifetime for wrongful termination under section 510 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1140, and under Texas common law. ² It alleged that "[i]n an attempt to deprive Plaintiff of her ERISA benefits, Defendant fired her under the pretext of jury service." These benefits consisted of medical insurance coverage under which Fuchs' husband and daughter incurred large claims.

The district court's decision is reviewed for abuse of discretion, and "unless there is a substantial reason to deny leave to amend, the discretion of the district court is not broad enough to permit denial." Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (Former 5th Cir. Nov.1981). Such substantial reasons include "undue delay ... and undue prejudice to the opposing party." Id. Both of these reasons justify the district court's refusal to allow the amendment. The ostensible reason for waiting until the eve of trial to add the ERISA claim is that Fuchs did not discover her claim until November 1989 when Lifetime, eighteen months after...