Wal-Mart Stores Inc. v. Lane

• Decision Date: 29 June 2000
• Docket Number: No. 13-98-250-CV,WAL-MART,13-98-250-CV
• Parties: (Tex.App.-Corpus Christi 2000) STORES, INC., Appellant, v. THOMAS J. LANE, Appellee.
• Court: Texas Court of Appeals

Page 282

31 S.W.3d 282 (Tex.App.-Corpus Christi 2000)

WAL-MART STORES, INC., Appellant, v. THOMAS J. LANE, Appellee.

No. 13-98-250-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS, CORPUS CHRISTI.

June 29, 2000

Rehearing Overruled November 9, 2000.

On appeal from the 214th District Court of Nueces County, Texas. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Justices Dorsey, Hinojosa, and Rodriguez.

OPINION

J. BONNER DORSEY, Justice.

By six points of error, Wal-Mart seeks reversal of a multi-million dollar jury verdict awarded in favor of its former employee, T.J. Lane. While employed by Wal-Mart, Lane complained that a female co-worker was "spreading rumors about him" that he had sexually harassed her. Upon investigating Lane's complaint, Wal-Mart concluded that Lane had indeed sexually harassed the female employee, and terminated Lane for that reason. Lane then brought suit against Wal-Mart for slander, retaliatory discharge, negligent investigation, and sex discrimination. The jury found for Lane, and awarded in excess of two million dollars in damages. We reverse and render judgment that Lane take nothing.

Facts

T. J. Lane was hired as a sales clerk with Wal-Mart, and was soon on the fast track career path. He was quickly promoted to a lower-management position, and was in line to become a store manager. While in the management training program at the Flour Bluff Wal-Mart in Corpus Christi, Texas, Lane met Suzanne Sparks, another Wal-Mart employee.

One evening, Lane worked with Suzanne Sparks in the store's cash office. The cash office was a small office equipped with a security camera that recorded everything that happened there. The day after working with Sparks, Lane was told by the store's personnel manager that someone was "spreading rumors" about him. Lane requested to meet with her about it. Per his request, he met with her, an assistant manager, and Joyce Wickham, another store employee.

During the meeting, Lane learned that Suzanne Sparks had told Wickham that he had flirted with her, discussed his sexual fantasies and tried to kiss her when they were in the cash office the previous night. Both the personnel manager and Wickham assured Lane that this was common behavior for Suzanne Sparks, and she had done the same with other managers in the past. They said they wanted to warn him about her. Since the camera in the cash room was broken, the encounter was not recorded.

Two weeks later, Lane was told by another store employee that Suzanne Sparks had told her that Lane had tried to grab her crotch. Lane contacted the Wal-Mart District Manager, Dan Sanders. He told Sanders that Sparks was spreading "sexual rumors" about him, and that he had been told that Sparks had done the same thing to other managers in the past. Sanders told Lane he would investigate it, and instructed him to stay away from Sparks.

Sanders began his investigation. He spoke with the store manager, and together, they interviewed Suzanne Sparks and took her statement. Sparks' written statement said that Lane "came on" to her in the office. She said that he tried to grab her in the crotch and she told him to stop. He then told her about sexual practices involving multiple partners in which he and his wife engaged. He asked her if she would meet him after work with one of her friends. She agreed to meet him, but received a page and left the room. He later asked her friend why they didn't show up, but other than that nothing came of the whole incident. She said that he had been nothing but professional since that time, so she had decided to "blow the whole situation off and forget about it."

After taking Sparks' statement, Dan Sanders interviewed several other employees at the Flour Bluff store. He took statements from Sparks' friend that was supposed to meet them that night, and the assistant manager and store employee who attended the first meeting with Lane and the personnel manager. Sanders also contacted the Wal-Mart store where Lane had previously worked. Upon completing the investigation, Sanders reported his findings to Wal-Mart's regional personnel office and its legal department.

Sanders summoned Lane to his office and asked him about the allegations contained in Suzanne Sparks' statement. Specifically, he asked Lane if he had ever discussed his sexual fantasies with her, grabbed her in the privates, or invited her on a "three-way" date with one of her friends. He also asked if Lane ever approached the friend and asked her why they did not show up for the date. Lane denied it all.

Sanders then asked Lane if he had ever discussed his sexual fantasies with anyone at a Wal-Mart store where he previously worked. At first Lane denied that as well, but then he remembered a conversation he had with a former boss there. He admitted that he had a conversation with Kellie Masters, his former boss at the Greenwood Wal-Mart store, where she told him that a woman had made a pass at her at a party and she told her husband about it, and he acted interested. She said to Lane, "All you men can think about is having two women." Lane said, "Well, it goes the same way for women. . . All they can think about is having two men." She responded, "Yeah, but your fragile little egos can't handle that." Lane said at that point, they laughed and left. Lane was terminated after that meeting with Sanders.

Lane sued Suzanne Sparks and Wal-Mart for negligent investigation, retaliatory discharge, slander, and violations of the Texas Commission on Human Rights Act and the Texas Labor Code. He sought compensatory and exemplary damages plus attorneys' fees. The case was tried to a jury, which made the following findings:

1. Lane's sex was a motivating factor in Wal-Mart's termination of him;

2. Wal-Mart retaliated against Lane for reporting that he had been sexually harassed by Suzanne Sparks;

3. Wal-Mart slandered Lane with malice;

4. The slanderous statements were not made outside Wal-Mart's investigation of the incident or to any person who did not have a business interest or duty in the matter;

5. Wal-Mart had voluntarily agreed to investigate the matter, but had conducted the investigation negligently.

The jury assessed actual damages at $2.3 million dollars and punitives at $800,000. The trial court entered judgment on the verdict against Wal-Mart and Suzanne Sparks, jointly and severally. Wal-Mart appeals that judgment.

I. Slander

Wal-Mart first argues that the evidence was legally and factually insufficient to base a finding of slander. We agree, and sustain this point of error.

Standard of Review

When reviewing for legal sufficiency, we must determine whether any evidence supports the challenged finding. In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951). If so, it must be upheld. Id. In conducting the review, we consider only the evidence and reasonable inferences that support the verdict and disregard all evidence and inferences to the contrary. Richey v. Brookshire Grocery Co., 952 S.W.2d 515, 521 (Tex. 1997); Ellis County State Bank v. Keever, 888 S.W.2d 790, 794 (Tex. 1994).

When reviewing for factual sufficiency, we must determine whether the challenged finding is against the great weight and preponderance of the evidence. We must consider and weigh all of the evidence, not just that evidence that supports the verdict. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). We can set aside the verdict only if it is so contrary to the overwhelming weight of the evidence that the verdict is clearly wrong and unjust. Maritime Overseas Corp., 971 S.W.2d at 407. See Ortiz, 917 S.W.2d at 772. A court of appeals is not a fact finder. Accordingly, we may not pass upon the witnesses' credibility or substitute our judgment for that of the jury, even if the evidence would clearly support a different result. Maritime Overseas Corp., 971 S.W.2d at 407. See Pool v. Ford Motor Co., 715 S.W.2d 629, 634 (Tex. 1986). If we reverse a trial court's judgment for factual insufficiency, we must detail all the evidence relevant to the issue and clearly state why the jury's finding is factually insufficient or so against the great weight and preponderance of the evidence that it is manifestly unjust. Maritime Overseas Corp., 971 S.W.2d at 407. See Keever, 888 S.W.2d at 794; Pool, 715 S.W.2d at 635. We must explain how the contrary evidence greatly outweighs the evidence supporting the verdict. Maritime Overseas Corp., 971 S.W.2d at 407. See Keever, 888 S.W.2d at 794; Pool, 715 S.W.2d at 635.

Wal-Mart contends that the evidence is insufficient to support the verdict because (1) no evidence exists that defamatory statements were made by a vice principal of Wal-Mart; (2) no evidence exists that any slanderous statements caused harm to Lane; and (3) the evidence is factually insufficient to overcome the investigatory privilege. Wal-Mart argues that the privilege may only be overcome by clear and convincing evidence that a vice principal of Wal-Mart either (1) made the statements with ill will or malice or (2) made the statements while entertaining serious doubts as to their truth.

1. Wal-Mart Agent

First, Wal-Mart argues that only a vice principal could make Wal-Mart liable for defamation. A corporation can only act through its officers or its agents. Corpus Christi Development Corp. v. Carlton, 644 S.W.2d 521 (Tex. App.--Corpus Christi 1982, no writ). The rule is that a corporation may be held liable for defamation by its agent if such defamation is referable to the duty owing by the agent to the corporation and was made in the discharge of that duty. Texam Oil Corp. v. Poynor, 436 S.W.2d 129 (Tex. 1968). Also, a corporation may be liable for the tortious acts of a vice-principal of the corporation. A vice-principal is a corporate officer, a person with authority to employ, direct, and discharge servants of the master,...