Rodriguez v. Benson Properties, Inc.

• Decision Date: 15 March 1989
• Docket Number: Civ. A. No. SA-88-CA-903.
• Parties: Gloria RODRIGUEZ, Plaintiff, v. BENSON PROPERTIES, INC., Defendant.
• Court: U.S. District Court — Western District of Texas

716 F. Supp. 275

Gloria RODRIGUEZ, Plaintiff, v. BENSON PROPERTIES, INC., Defendant.

Civ. A. No. SA-88-CA-903.

United States District Court, W.D. Texas, San Antonio Division.

March 15, 1989.

Alonzo Villarreal, Jr., San Antonio, Tex., for plaintiff.

Shelton E. Padgett, Akin, Gump, Strauss, Hauer & Feld, San Antonio, Tex., for defendant.

ORDER

PRADO, District Judge.

On this date came on to be considered Defendant's Motion for Partial Summary Judgment and Application for Injunctive Relief, filed in the above-styled and numbered cause on November 30, 1988. Plaintiff has filed no opposition to the motion.

Defendant requests the Court to enter summary judgment in its favor on the four state law causes of action brought by Plaintiff against Defendant in her First Amended Complaint. These causes of action are for (1) breach of an implied covenant of good faith and fair dealing, (2) breach of a verbal hiring promise, (3) breach of the doctrine of promissory estoppel, and (4) breach of contract and promissory estoppel.

I. First Cause of Action

As to the first cause of action, in her complaint, Plaintiff contends that a covenant of good faith and fair dealing was implied in the employment relationship which existed between Plaintiff and Defendant. Texas courts have recognized that an employer/employee relationship is contractual in nature. Pioneer Casualty Co. v. Bush, 457 S.W.2d 165, 169 (Tex.Civ.App. — Tyler 1970, writ ref'd n.r.e.); Northwestern Nat'l Life Ins. Co. v. Black, 383 S.W.2d 806, 809 (Tex.Civ.App. — Texarkana 1964, writ ref'd n.r.e.). Texas courts have also recognized that certain contracts may create a special relationship between the parties that gives rise to a duty of good faith and fair dealing. Aranda v. Insurance Co. of N. America, 748 S.W.2d 210, 212-13 (Tex.1988) (workers compensation insurers owe duty to claimants); Arnold v. National County Mutual Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987) (insurers owe duty to claimants); Izaguirre v. Texas Employers' Ins. Ass'n, 749 S.W.2d 550, 553 (Tex.App. — Corpus Christi 1988, no writ) (workers compensation insurers owe duty to claimants); Aetna Casualty & Surety Co. v. Marshall, 699 S.W.2d 896, 901 (Tex. App. — Houston 1st Dist. 1985, writ granted) (workers compensation insurers owe duty to claimants); Brooks, Tarlton, Gilbert, Douglas & Kressler v. United States Fire Ins. Co., 832 F.2d 1358, 1376 n. 15 (5th Cir.1987) (insurers owe duty to insured).

Plaintiff claims that the employer/employee relationship is also a special relationship which should give rise to a duty of good faith and fair dealing. No Texas case has expressly held, however, that a duty of good faith and fair dealing exists between an employer and employee as a result of their contractual relationship. See Lumpkin v. H & C Communications, Inc., 755 S.W.2d 538, 540 (Tex.App. — Houston 1st Dist. 1988, no writ) (court would not extend law to employment contracts in face of Texas Supreme Court's failure to do so). Texas courts have made clear that such a duty does not arise in all contractual relationships; only in certain special relationships. Arnold, 725 S.W.2d at 167; English v. Fischer, 660 S.W.2d 521, 522 (Tex. 1983).

In determining whether such a special relationship exists, Texas courts have looked at two aspects of the relationship: (1) the parties' relative bargaining power, and (2) the degree of control exercised by one party over the other. Aranda, 748 S.W.2d at 212; Arnold, 725 S.W.2d at 167. In the insurance context, it is clear that insurers usually have much more bargaining power when determining the provisions of their insurance contracts then insureds. Also, insurers exercise exclusive control over the processing of claims of insureds, determining the amount and timing of any payments on claims. Id. The nature of insurance contracts is such that "unscrupulous insurers" may "take advantage of their insureds' misfortunes in bargaining for settlement or resolution of claims." Arnold, 725 S.W.2d at 167.

This is not the case with employment contracts. While disparity of bargaining power may exist in many employment contract situations, this is not always the case and certainly not to the degree it exists in the context of insurance contracts. The same is true as to control. While an employer certainly controls an employee, he may not control all aspects of the employment relationship. Some may be within the exclusive control of the employee. It does not appear to this Court that the relationship created by an employment contract is the kind of "special relationship" which exists with insurance contracts and gives rise to a duty of good faith and fair dealing. Because the Court does not find a duty to exist, Plaintiff cannot recover on her first cause of action.

II. Second Cause of Action

Plaintiff's second cause of action is for breach of a verbal hiring promise. In her complaint, Plaintiff states this cause of action as follows: "Plaintiff performed his sic duties faithfully during his sic period of employment and was never reprimanded or warned concerning his sic work performed or other problems. The aforesaid termination was without just cause in breach of contract." Plaintiff's First Amended Complaint, Mar. 8, 1989, at 9. Plaintiff apparently contends that she was promised a job for as long as her work performance was satisfactory, and that her discharge, if any, would occur only for just cause after notice, investigation and a hearing.

Texas courts have long recognized that, in this state, absent a specific contract term to the contrary, employment relationships are terminable at will by either party. East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99 (1888). This concept, known as the "employment-at-will" doctrine, means an employer may terminate an employee at any time for any reason. The reason need not be fair, reasonable, or otherwise correct. Lumpkin, 755 S.W.2d at 539.

In determining whether Plaintiff may recover on her second cause of action, the Court must consider the Texas law concerning wrongful discharge. "In order to establish a cause of action for wrongful termination, an employee must prove that he and his employer had a contract that specifically provided that the employer did not have the right to terminate his employment at will, and that the contract was in writing." Stiver v. Texas Instruments, Inc., 750 S.W.2d 843, 846 (Tex.App. — Houston 14th Dist. 1988, no writ). This writing must provide in a "special and meaningful way" that the employer may not terminate the employment relationship at will. Id. "The necessity of a written document flows from the statute of frauds which provides, generally, that contracts not to be completed within one year are not enforceable unless they are made into a written memorial." Benoit v. Polysar Gulf Coast, Inc., 728 S.W.2d 403, 406 (Tex. App. — Beaumont 1987, writ ref'd n.r.e.) (citing Tex.Bus. & Com.Code § 26.01(b)(6)).

Plaintiff's second cause of action is based on an alleged breach of a verbal promise. Because a wrongful termination claim must be grounded upon a writing, Plaintiff cannot recover on her second cause of action as a matter of law.

III. Third Cause of Action

Plaintiff's third cause of action is for breach of the doctrine of promissory estoppel. Plaintiff states "Defendant's breach of its representations constituted a breach of the doctrine of promissory estoppel. As a proximate result of the defendant's breach of agreement and representations, plaintiff has suffered loss of income and fringe benefits and other damages." Plaintiff's First Amended Complaint, Mar. 8, 1989, at 9. Apparently, Plaintiff contends through this cause of action that Defendant is promissorily estopped from denying the validity of any alleged verbal hiring promises made by Defendant to Plaintiff.

The requisite elements of promissory estoppel are (1) a promise (2) which the promisor can reasonably forsee will be relied upon (3) substantially to the promisee's detriment. English, 660 S.W.2d at 524. When it is...