Miniex v. Hous. Hous. Auth.
| Decision Date | 05 September 2019 |
| Docket Number | CIVIL ACTION NO. 4:17-0624 |
| Parties | Karen MINIEX, Plaintiff, v. HOUSTON HOUSING AUTHORITY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Joel M. Androphy, Zenobia Harris Bivens, Justin Carl Pfeiffer, Michael J Hurta, Victoria Rose Mery, Berg and Androphy, Houston, TX, for Plaintiff.
Brian Joseph Begle, Andrea Chan, Xiliang Zhang, Olson & Olson LLP, Houston, TX, for Defendant.
Before the Court in this False Claims Act ("FCA") retaliation lawsuit is Defendant Houston Housing Authority's ("HHA") Brief in Support of Renewed Motion for Judgment as a Matter of Law, or Alternatively, Motion for New Trial or Remittitur ("HHA's Motion") [Doc. # 257].1 Plaintiff Karen Miniex filed a response.2 The Motion is ripe for decision.3 Based on the parties' briefing, pertinent matters of record, testimony and evidence introduced at trial, and relevant legal authority, the Court grants in limited part and otherwise denies Defendant HHA's Motion.
Defendant HHA, one of the nation's largest public housing authorities, hired Plaintiff Karen Miniex in March 2012 to serve as its general counsel. Miniex served in that role until HHA's President and CEO, Tory Gunsolley, terminated her employment in December 2016 following a dispute over the proper handling of a fraud investigation. After her termination, Miniex sued HHA, alleging she was retaliated against in violation of the FCA for reporting her concerns about systemic fraud in HHA's housing voucher program. After a six-day trial,4 the jury entered a verdict in Miniex's favor.5 Pursuant to the jury's verdict, the Court awarded Miniex $751,502 in back pay, $600,000 in front pay, $46,786 in pre-judgment interest, and $317,750 and $215,000 in past and future mental anguish, respectively.6
HHA seeks judgment as a matter of law ("JMOL"), a new trial, or remittitur. HHA contends JMOL is appropriate because no reasonable jury could find, based on the trial evidence and testimony, that Miniex proved three essential elements of her FCA retaliation claim—namely, that her reports were protected, went beyond her job duties, and were known of by Gunsolley. HHA next asserts that a new trial is warranted based on allegedly erroneous jury instructions and Miniex's lack of evidence suggesting that her reports caused Gunsolley to discipline and terminate her. Finally, HHA argues Miniex's wage and noneconomic damages awards are unsupported by evidence, excessive, and should be remitted.
The majority of HHA's arguments lack merit. The Court concludes that the jury was properly instructed and reasonably found for Miniex on all essential elements of her FCA retaliation claim. Moreover, the back pay award is supported by trial evidence and is not excessive. The Court, however, concludes that Miniex's front pay and noneconomic damage awards are excessive. The Court therefore denies in large part HHA's Motion, but downwardly amends Miniex's front pay award to $216,861 and Miniex's future noneconomic damage award to a nominal figure of $100. The Court further grants HHA's Motion for remittitur of Miniex's past noneconomic damages and requires Miniex to elect between lowering her past noneconomic damages to $217,070.34 and the Court holding a new trial.
The parties' proof at trial established the following facts. HHA is a governmental entity that provides affordable housing to low-income individuals in the Houston area.7 To fulfil its mission, HHA administers public housing and issues housing vouchers to eligible individuals through its Housing Choice Voucher Program ("HCVP").8 HHA also administers a Veterans' Affairs Supportive Housing ("VASH") program, which provides housing vouchers to chronically homeless veterans referred through the Veterans Administration ("VA").9 While the VASH program has distinct eligibility requirements from HCVP, the VASH program is managed by HCVP management.10 HHA's primary source of funding for its programs is the U.S. Department of Housing and Urban Development ("HUD").11
In March 2012, Tory Gunsolley, HHA's President and CEO, hired Karen Miniex to serve as HHA's general counsel.12 From 2012 through 2015, Gunsolley awarded Miniex positive reviews and pay raises.13
As HHA's general counsel, Miniex oversaw investigations into employee and client fraud.14 HHA's fraud investigator, Benjamin Skalka, reported directly to Miniex.15 When Skalka investigated fraud, he communicated his findings to Miniex, she directed his efforts, and they coordinated the drafting of formal fraud reports.16 When a fraud report was finalized, Miniex submitted the report to Gunsolley.17 If Gunsolley decided it was appropriate, he would present the matter to HHA's Board of Commissioners ("Board"),18 HHA's governing authority.19 Both Miniex and Skalka would frequently contact and work with HUD's Office of Inspector General ("HUD-OIG"), the division in HUD tasked with combatting fraud.20
In the first half of 2016, Skalka discovered that two HHA employees within the HCVP program, Shawntea Radford and Carmen Newland, were involved in separate fraudulent schemes to sell housing vouchers.21 During his two investigations, Skalka observed HCVP protocol violations and other management decisions that raised his suspicions that a fraud cover-up was ongoing.22 Skalka's investigations, his and Miniex's subsequent reports, and HHA's handling of those reports are a focus of this lawsuit.
Skalka began his investigation into Radford in late January 2016.23 During this investigation, Skalka learned that while Radford was working for HHA, she had been arrested for felony tampering with government documents and received deferred adjudication.24 Robin Walls, HCVP's director, conducted witness interviews and investigated Radford's fraud without informing Skalka or the legal department.25
On February 11, 2016, Miniex submitted to Gunsolley a report by Skalka concerning Radford's fraud in the HCVP program.26 Miniex informed Gunsolley she had notified HUD-OIG about Radford's fraud.27 As a result of the incident, Radford was suspended and her employment at HHA was terminated thereafter.28
Skalka began his investigation into Newland in May 2016.29 Before Skalka was informed of the matter, Walls conducted an internal investigation and concluded that the problems arose from administrative errors by the VA.30 Skalka would later find this conclusion implausible because documents within the relevant files had clearly been manipulated; name entries had been whited out and written over by hand.31 According to Skalka, the fraud was "black and white."32 On the day Skalka began his investigation in earnest, Mark Thiele, the Vice President of HCVP, provided Skalka with a stack of client files that Thiele and Walls had identified were not VASH eligible.33 This was suspicious to Skalka because it indicated HCVP management had known of multiple transgressions but had not informed Skalka or the legal department.34 Skalka also learned Walls had approved Newland for unlimited overtime while Newland was under investigation for a different problem, time clock fraud, and Newland averaged 20 to 40 overtime hours a week.35 Newland's direct supervisor, Patricia Doggett, admitted during an interview with Skalka that she was "unclear" as to her duties, had not done a quality control screening on Newland's files, and she "didn't want to throw Carmen Newland under the bus."36
On June 14, 2016, Miniex submitted to Gunsolley a report by Skalka on Newland's fraud in connection with the VASH program, along with several exhibits documenting Newland's fraudulent scheme.37 Skalka concluded that Newland had been selling VASH vouchers to persons with no association with the VA.38 Along with Skalka's report, Miniex submitted a cover letter where she recommended Newland's termination.39 Miniex further recommended the termination of three HCVP managers—Mark Thiele, Robin Walls, and Patricia Doggett—for negligent supervision.40 Miniex reasoned that based on the level of fraudulent activities Radford and Newland had achieved, the HCVP managers knew or should have known of the fraud.41 Miniex requested that she be allowed to present the Newland matter to HHA's Board, and recommended that HHA hire a third party to investigate how widespread the problem was and whether vouchers were being fraudulently issued on a systemic basis.42 Miniex added that she had informed HUD-OIG of Newland's fraud and that she deferred to Gunsolley, HHA's Board, and HUD-OIG on next appropriate steps.43
Gunsolley responded to Miniex the same day he received Skalka's report, the exhibits, and Miniex's cover letter.44 Gunsolley explained that he was not convinced that there was enough evidence to terminate anyone, including Newland or Doggett, even though he had not read the attached exhibits.45 Gunsolley also told Miniex that the sale of veterans vouchers did not really matter because there were more vouchers than veterans.46 Gunsolley directed Skalka to interview Robin Walls regarding unspecified inaccuracies.47 Skalka interviewed Walls, who said that discrepancies in VASH files were attributable to VA errors.48 Skalka did not credit this assertion and determined that the only inaccuracy in his report was a misspelling of Walls's name.49 Following several more interviews, Skalka submitted an amended report, correcting the spelling error.50 Bryce, who also was present during the Walls interview, advised Gunsolley in an email that he should consider hiring a third party to investigate "whether vouchers are being issued fraudulently on a systemic basis."51 Bryce acknowledged that "[t]wo incidents in such a short period of time certainly gives one pause as to just how widespread the problem may be."52
On June 20, 2016, Gunsolley and Miniex met to discuss Skalka's amended report and her recommendations to terminate HCVP management and hire an...
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