E-Z Mart Stores, Inc. v. Hale

• Decision Date: 13 September 1994
• Docket Number: No. 06-93-00079-CV,E-Z,06-93-00079-CV
• Citation: 883 S.W.2d 695
• Parties: MART STORES, INC., Appellant, v. Linda HALE, Appellee.
• Court: Texas Court of Appeals

Page 695

883 S.W.2d 695

E-Z MART STORES, INC., Appellant, v. Linda HALE, Appellee.

No. 06-93-00079-CV.

Court of Appeals of Texas,

Texarkana.

Submitted March 29, 1994.

Decided July 21, 1994.

Rehearing Denied Sept. 13, 1994.

John R. Mercy, Atchley, Russell, Waldrop, Hlavinka, Texarkana, for appellant.

Tom Needham, Needham, Johnson, Lovelace, Johnson, Dallas, for appellee.

Before CORNELIUS, C.J., and BLEIL and GRANT, JJ.

OPINION

GRANT, Justice.

E-Z Mart Stores, Inc. appeals from a judgment favoring Linda Hale in her lawsuit alleging a breach of contract and a breach of the duty of good faith and fair dealing. E-Z Mart contends that as a matter of law there was no contract between itself and Hale, that the evidence is legally or factually insufficient to support the existence of a contract, that no issue was submitted to the jury on the existence of a contract, and that, absent a finding on the existence of a contract, Hale could not collect on her allegation of a breach of the duty of good faith and fair dealing.

Linda Hale testified that on August 6, 1987, while she was working as an E-Z Mart store manager, she injured her back carrying a wooden ladder used to change gasoline prices displayed on an outside sign post. E-Z Mart had previously posted a notice to its employees that, effective May 22, 1987, E-Z Mart was switching to a self-insurance program for workers' compensation benefits. After her injury, Hale reported her injury to the E-Z Mart employee in charge of such claims, and E-Z Mart paid Hale monetary benefits and began paying for her medical expenses. On May 31, 1988, Hale was informed that E-Z Mart had stopped paying the expenses. E-Z Mart contends that an investigator hired by it had determined that Hale's injury did not occur in the manner that she had alleged and that he recommended that her claim should be denied.

Hale sued E-Z Mart claiming negligence, a violation of the Texas Insurance Code, breach of contract, misrepresentation, fraud, and a violation of the duty of good faith and fair dealing. After four days of trial, the jury charge submitted theories of negligence, violation of the Texas Insurance Code, breach of the duty of good faith and fair dealing, and, perhaps, breach of contract. The jury found that E-Z Mart had breached the contract and its duty of good faith and fair dealing and that it violated the Texas Insurance Code. Hale moved for judgment only on the theories of breach of contract and breach of the duty of good faith and fair dealing. The trial court entered judgment awarding the plaintiff $254,686.27, fifty weeks of compensation benefits at the rate of $143.33 a week, and pre- and post-judgment interest.

I. BREACH OF CONTRACT

The parties initially argue whether a contract existed between them, whether this issue should have been presented to the jury, and what effect the failure to submit the issue should have had on the resulting judgment. E-Z Mart is a nonsubscriber under the Workers' Compensation Act and, therefore, Hale must prove either that E-Z Mart was negligent or that E-Z Mart and Hale had a contract providing the same benefits as would be received under workers' compensation coverage. The jury refused to find, in response to question 9, that E-Z Mart's negligence, if any, was not a proximate cause of any of Hale's total incapacity. Hale does not challenge this finding and is, therefore, relegated to her contract theory of recovery. Under Texas law, a contract is enforceable when an employer obligates itself to provide the benefits that would be provided under workers' compensation. Tigrett v. Heritage Bldg. Co., 533 S.W.2d 65, 70 (Tex.Civ.App.-Texarkana 1976, writ ref'd n.r.e.); see also Hazelwood v. Mandrell Industries Co., 596 S.W.2d 204, 205 (Tex.Civ.App.-Houston [1st Dist.] 1980, writ ref'd n.r.e.).

Hale asserts that the existence of contractual duties was established as a matter of law by the evidence as presented by E-Z Mart's attorney. In pretrial motions and briefs, E-Z Mart relied on the existence of the self-insurance program in arguing that Hale's claims were barred by federal preemption under ERISA. During the voir dire phase of the trial, E-Z Mart's attorney told venire members that E-Z Mart had set up its own program to handle on-the-job employee injuries, that the program was governed by the same rules as a workers' compensation program, and that the evidence would show that E-Z Mart sent a bulletin to all of its employees informing them that claims under the new system would be handled the same as claims under the workers' compensation system. In his opening statement, E-Z Mart's attorney stated that E-Z Mart sent the bulletin to explain to its employees that claims would be handled in the same fashion, and, in closing argument, E-Z Mart's attorney again explained to the jury that E-Z Mart had set up a program to handle claims from on-the-job injuries. Thus, E-Z Mart did not place in issue whether a contract of insurance existed. An issue that is not in controversy need not be presented to a jury.

Both parties contend that the other side waived its argument on the existence of the contract by failing to object to a jury charge submitted without an issue regarding the contract's existence. If an entire theory is omitted from the charge, it is waived, and the defendant has no duty to object. Ramos v. Frito-Lay, Inc. 784 S.W.2d 667, 668 (Tex.1990). Where an issue is omitted which constitutes only a part of a complete and independent ground and other issues necessarily referable to that ground are submitted and answered, the omitted elements are deemed found in support of the judgment if no objection is made and they are supported by sufficient evidence. Id; see also TEX.R.CIV.P. 279; Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 495 (Tex.1991) (breach of contract case following Ramos ).

Jury questions 13 and 14 set out parts of the breach of contract claim. Question 13 asks: "Did Linda Hale receive an injury on or about August 6, 1987, in the course of her employment that was a producing cause of any total incapacity?" Question 14 inquires about the duration of such incapacity. The jury questions clearly assume the existence of an insurance contract between E-Z Mart and its employees. The evidence presented conclusively proves that E-Z Mart made the decision to replace workers' compensation insurance with a self-insurance program. Since Hale was an employee, the contract applied to her as well as the other eligible employees of E-Z Mart. Based upon these facts, the manner in which the case was presented to the jury, and the character of the questions submitted to the jury, we deem a finding of the existence of a contract to provide workers' compensation benefits to its employees by E-Z Mart. This finding is made in support of the judgment. See Cielo Dorado Dev. v. Certainteed Corp., 744 S.W.2d 10, 11 (Tex.1988). This point of error is overruled.

Hale additionally argues that any error committed by the trial court in submitting question 13 unconditioned on any other question was invited by E-Z Mart because its attorney encouraged the court to submit the question unconditionally. Although E-Z Mart's attorney did request question 13 to be the first question in the charge, he also suggested changes in it which would have made it a general question regarding whether the injury occurred in the course and scope of employment, and he also objected to question 14 as setting up a statutory cause of action which had not been pleaded, apparently indicating a workers' compensation suit. E-Z Mart did not invite the error.

E-Z Mart next contends that if the court determines that a finding on the existence of a contract might be deemed, the evidence was legally and factually insufficient to support such a finding. In reviewing a legal sufficiency point of error, the court should examine only the evidence and inferences that support the jury's finding, and it should disregard all evidence and inferences to the contrary. Larson v. Cook Consultants, Inc., 690 S.W.2d 567 (Tex.1985). If there is any evidence of probative value which supports the finding, then the point of error fails. Holley v. Watts, 629 S.W.2d 694 (Tex.1982). When reviewing a factual sufficiency point of error, the court should examine all of the evidence and set aside the finding only if it goes against the overwhelming weight of the evidence so as to be clearly wrong and manifestly unjust. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Hale pleaded both an express and an implied contract. E-Z Mart contends that there is no evidence to support the existence of an express contract, and Hale does not dispute this. The evidence shows that E-Z Mart posted a notice in the store where Hale worked which stated that:

Effective 5-22-87 all E-Z Mart employees are covered by Workmen's Compensation Ins. through E-Z Mart, Inc. Self Insurance Program. The Company has assumed the role of your Workmen's Comp. Insurance Company.

Because this is not a formal contract of offer and acceptance, it is best categorized as an implied contract, based on the relationship of the parties and their actions.

A contract implied in fact arises from the acts and conduct of the parties, it being implied from the facts and circumstances that there was a mutual intention to contract. Haws & Garrett G. Con., Inc. v. Gorbett Bros. Weld. Co., 480 S.W.2d 607, 609 (Tex.1972). The real difference between express contracts and those implied in fact is in the character and manner of proof required to establish them. Id. It may be said broadly that any conduct of one party, from which the other may reasonably draw the inference of a promise, is effective in law as such. Id.

A vice-president of E-Z Mart testified that the corporation created and funded its own program to provide benefits parallel to those provided under the Workers' Compensation Act. E-Z Mart posted the notice and, after her injury,...