Universal Services Co., Inc. v. Ung

• Decision Date: 28 July 1994
• Docket Number: No. B14-93-00026-CV,B14-93-00026-CV
• Citation: 882 S.W.2d 460
• Parties: UNIVERSAL SERVICES COMPANY, INC., Appellant, v. Huy Hieng Khaouv UNG, individually, and as Next Friend of Bun Hourk Ung, Bun Ly Ung, & Thaeng Ung, Minors, and Bun Chay Ung, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 460

882 S.W.2d 460

UNIVERSAL SERVICES COMPANY, INC., Appellant, v. Huy Hieng Khaouv UNG, individually, and as Next Friend of Bun Hourk Ung, Bun Ly Ung, & Thaeng Ung, Minors and Bun Chay Ung, Appellees.

No. B14-93-00026-CV.

Court of Appeals of Texas Houston (14th Dist.).

July 28, 1994.

Rehearing Denied Sept. 1, 1994.

Mark T. Price, George Jackson, Jeff Nobles, Lynne Liberato, Alene Levy, Houston, for appellant.

James B. Lewis, Arthur Glover, Ronald P. Schramm, Houston, for appellees.

Before SEARS and LEE, JJ., and MORSE, Former J. (Sitting by Designation)

MAJORITY OPINION

SEARS, Justice.

This is an appeal from a judgment awarding appellees $2,500,000.00 in punitive damages in their worker's compensation wrongful death action. Appellant raises eight points of error. We affirm.

Bun Meng Ung was struck and killed by a trailer that became disconnected from a truck as it traveled on Interstate 10. There was a large pothole in the road. When the truck hit the hole, the trailer became disconnected and veered into the workmen. Appellees sued appellant, the State of Texas, and the Hammerblow Corporation (the manufacturer the trailer hitch). Appellees settled with all defendants except appellant and went to trial solely on the issue of punitive damages.

At the time of the accident, Ung was working for appellant as a member of a crew cleaning debris from the shoulder of the road. Ung's crew was supervised by Lyle Strandlien. The area in which the crew was working was protected by a closed driving lane, marked by orange steel barrels filled with sand. Two one-ton buffer trucks and a dump truck were placed at the site to shield the workers from errant vehicles. There was conflicting testimony regarding the location of these trucks at the time of the accident. A lighted sign board on the back of each truck directed traffic away from the shoulder and the closed driving lane. Appellant had also placed signs ahead of the work site advising motorists of sweepers. The workers themselves wore brightly colored vests supplied by appellant.

Appellant first complains that the damage award violates the United States and Texas Constitutions because the procedures provided the jury no guiding standard and encouraged unlimited discretion. Appellant cites Pacific Mutual Life Insurance Company v. Haslip, 499 U.S. 1, 22-24, 111 S.Ct. 1032, 1046, 113 L.Ed.2d 1 (1991), which sets out three factors for determining whether there were meaningful constraints upon the jury's discretion in assessing exemplary damages. Those three factors are: (1) whether the jury instructions were adequate, (2) whether there was a post-trial review of the award, and (3) whether appellate review is based on a comparative analysis. 499 U.S. at 22-24, 111 S.Ct. at 1046. We turn first to the adequacy of the instruction given.

The instruction given the jury provided:

"Exemplary damages" means an amount that you may in your discretion award as an example to others as a penalty or by way of punishment. (emphasis added).

The purpose of punitive damages in Texas is to punish the wrongdoer, to set an example to others, and to compensate the victim. See Hofer v. Lavender, 679 S.W.2d 470, 474 (Tex.1984). Instructions similar to the one submitted in this case have been upheld as not violative of the U.S. or Texas Constitutions. See, e.g., Missouri Pac. R.R. Co. v. Lemon, 861 S.W.2d 501 (Tex.App.--Houston [14th Dist.] 1993, writ requested). In Lemon, the jury was advised that "exemplary damages" means "an amount that 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 that you may have found as actual damages." Id. at 525. A panel of this court held that, although this instruction was not as lengthy as the one upheld in Haslip, it similarly " 'enlightened the jury as to the punitive damages' nature and purpose, identified the damages as punishment for civil wrongdoing of the kind involved, and explained that their imposition was not compulsory'." Haslip, 499 U.S. at 19, 111 S.Ct. at 1044. Thus, this court held that the Lemon instruction satisfied due process constraints. Lemon, 861 S.W.2d at 525.

Appellant attempts to distinguish Lemon by pointing to the final phrase in the Lemon instruction, "in addition to any amount that you may have found as actual damages," which is not found in the instruction here. However, such a phrase was unwarranted in this case since no actual damages could be recovered due to the Worker's Compensation Act. Furthermore, we do not find that phrase crucial to the question whether the jury was given adequate guidance in assessing "punitive" damages.

In Transportation Insurance Company v. Moriel, 37 Tex.Sup.Ct.J. 450 (Feb. 2, 1994), the Texas Supreme Court discussed the constitutional issues surrounding awards of punitive damages. In Moriel, the court stated that Texas jury instructions are the only aspect of Texas procedure to meet or exceed the minimal requirements. Id. at 465 n. 25. In so stating, the court referred to the instructions given the Moriel jury which included the factors set forth in Alamo National Bank v. Kraus, 616 S.W.2d 908, 910 (Tex.1981). By noting that "Texas jurors are instructed on the factors set forth in Kraus ...," the court implied that constitutional requirements are met by inclusion of these factors in an instruction. See id. However, such an implication does not necessarily suggest that the court would hold unconstitutional an instruction without the Kraus factors. In any event, the court expressly provided that we may not retroactively apply procedural standards adopted in Moriel. See id. at 463. Besides the questionable implication in Moriel, we find no case law indicating that this instruction violates due process. Thus, we find that the instruction in this case was not error.

We further find that there was extensive post-trial review of the award. Appellant filed a motion for new trial, or in the alternative, a motion for remittitur which included a constitutional challenge to the instruction regarding exemplary damages. Appellants complain that the trial court conducted no meaningful review of the award; however, the entire hearing on this motion focused on the award of exemplary damages. Appellant also complains that the trial court did not state on the record its reasons for refusing to interfere with the award. Like the courts in Lemon and Haslip, we find no constitutional violation by the trial court in failing to articulate its basis for the denial of the motion.

Appellate review of awards of exemplary damages involves consideration of the following factors:

(1) the nature of the wrong,

(2) the character of the conduct involved,

(3) the degree of culpability of the wrongdoer,

(4) the situation and sensibilities of the parties concerned, and

(5) the extent to which such conduct offends a public sense of justice.

Kraus, 616 S.W.2d at 910. The jury found that appellant committed gross negligence resulting in the death of Ung. The jury heard evidence that the supervisor was aware of the potential danger to his crew because he had observed a prior accident involving a loose trailer in approximately the same location a year before. Furthermore, the evidence was conflicting as to the placement of buffer trucks to protect the crew members, but there was evidence that the placement provided the crew no protection. The trial judge allowed evidence of the possible negligence of parties other than appellant, including the driver of the truck, the owner of the trailer, and the State's duties with respect to highway repair. The jury also learned that Ung left a wife and four children. We find this evidence sufficient to support the jury's award under the Kraus factors.

Appellant also asks that we utilize another factor, not included in the Kraus case, to determine whether the award is excessive. This factor is a comparison of the award to the defendant's net worth. In support of applying this test, appellant cites a number of California cases. Absent any Texas precedent for utilizing this analysis, we decline appellant's invitation to do so.

Finally, appellant argues that there can be no meaningful comparison between actual damages and exemplary damages in this case because there is no award of actual damages. Indeed, because this is a worker's compensation case, there can be no award of actual damages. Even so, it does not automatically follow that the award is excessive. Furthermore, an exact amount of actual damages is unnecessary to determine whether exemplary damages are reasonable. Wright v. Gifford-Hill & Co., 725 S.W.2d 712, 714 (Tex.1987). We hold that the award is not excessive under the U.S. or Texas Constitutions.

In addition to arguing that the award is excessive, appellant argues that, as an employer, it was denied equal protection because punitive damages may be awarded against it without any jury award of actual damages. Appellant claims there is no rational basis for drawing a distinction between employers and other plaintiffs. We disagree. A plaintiff in a worker's compensation case cannot recover actual damages, but waives any common law or statutory rights of action in exchange for the receipt of worker's compensation benefits. TEX.REV.CIV.STAT.ANN. art. 8306, §§ 3a, 5 (Vernon 1964) (repealed 1989). In actions for exemplary damages, it would be nonsensical to require a plaintiff to plead and submit issues on actual damages which cannot be recovered. Wright, 725 S.W.2d at 714. Furthermore, the lack of such a finding of actual damages does not necessarily result in excessive exemplary damages. Thus, we find a rational basis for allowing plaintiffs in worker's compensation to recover exemplary damages without having to plead, prove, and obtain jury findings of actual damages. We overrule point of error one.

In point of error two, appellant challenges the legal and factual sufficiency of the evidence...