Court Opinion

ID: 9760793
Source: CourtListenerOpinion
Date Created: 2023-08-29 01:16:25.833841+00
Date Added: 2024-06-11T07:29:16.629055
License: Public Domain

EDELMAN, Justice,
concurring and dissenting.
I concur in the judgment and opinion of the Court except as to the sufficiency of the evidence to support the award of punitive damages, from which I dissent.
In Transportation Ins. Co. v. Moriel, 879 S.W.2d 10 (Tex.1994), the Texas Supreme Court substantially clarified the Texas gross negligence standard and “no evidence” review of gross negligence findings. Id. at 26. However, that opinion was expressly limited to gross negligence, and declined to state the circumstances in which “intentional” misconduct will justify punitive damages. Id. at 23 n. 16. This case presents that issue.
Punitive damages are levied against a defendant as punishment for outrageous, malicious, or otherwise morally culpable conduct. Id. at 16. Since the legal justification for punitive damages is similar to that for criminal punishment, punitive damages require appropriate substantive and procedural safeguards to minimize the risk of unjust punishment. Id. at 16-17. Although Moriel addressed those safeguards only in the context of gross negligence, such safeguards are no less essential in awarding punitive damages for malice, fraud or intentional conduct.
Importantly, as noted in Moriel, the fact that an insurer denies a claim knowing it has no reasonable basis for doing so justifies only an award of compensatory damages and nothing more. Id. at 18. Such behavior justifies punitive damages only when further accompanied by malicious, intentional, fraudulent or grossly negligent conduct. Id.
This reasoning would suggest that the fact that an employer discharges or discriminates against an employee because he has filed a *82workers’ compensation claim also justifies compensatory damages only. Punitive damages are not automatically recoverable merely because a discharge is “retaliatory.”
Of the four categories of conduct which Moriel recognizes as justifying an award of punitive damages, gross negligence is the least willful, and, in that sense, the least culpable. Accordingly, the requirements necessary to establish the more culpable types of conduct, i.e., fraud, malice, and intentional acts, should be no less rigorous than those required to prove gross negligence. Said another way, the requisites to prove gross negligence would largely be defeated if less could be shown to recover punitive damages for malice, fraud or intentional conduct.
The two elements required to prove gross negligence are:
(1) viewed objectively from the standpoint of the actor, the act or omission must involve an extreme degree of risk, considering the probability and magnitude of the potential harm to others, and (2) the actor must have actual subjective awareness of the risk involved, but nevertheless proceed in conscious indifference to the rights, safety, or welfare of others.
Id. at 23.1
With regard to the first element, “extreme risk” refers to the possibility of causing extraordinary harm not ordinarily associated with breach of contract or bad faith, such as death, grievous physical injury, or financial ruin. Id. at 24. Thus, the harm must be independent and qualitatively different from the sort of injuries that typically result from bad faith or breach of contract. Id. Anxiety and embarrassment do not, and mental anguish might not, satisfy this requirement. Id. at 24, 26.
As to the second element, a defendant’s subjective mental state can be proved by either direct or circumstantial evidence. Id. at 23.
To the extent that extreme risk, awareness thereof by the defendant and action in conscious disregard of that risk must be shown to prove gross negligence, no less should be established to recover punitive damages for malice, fraud or intentional conduct. If anything, those theories should involve proof of the same risk and awareness, and a more willful mental state by the defendant.
In this case, the trial court found that the conduct of appellants, “jointly and severally, was intentional, willful and malicious in its wrongful discharge” of appellee. However, the findings of fact do not reflect a risk of extraordinary harm to appellee that is independent and qualitatively different from the sort of injuries that typically result from wrongful discharge. Nor do those findings show, even circumstantially, that appellants were aware of such a risk, and acted either in conscious disregard of it or with intent to expose appellee to it.
Upholding an award of punitive damages under these circumstances would suggest that such damages are recoverable whenever the Anti-Retaliation Law is violated. That is a result which I do not believe the legislature intended or the Constitution permits. I would therefore sustain appellants’ points of error challenging the sufficiency of the evidence supporting punitive damages, and reverse and remand the award of punitive damages.2

. Although these elements were set forth in the context of an insurance bad faith lawsuit, "gross negligence in the context of insurance is no different from gross negligence in any other context." Moriel, 879 S.W.2d at 23 (emphasis in original).

. Upon reversal, the judgment in Moriel was remanded rather than rendered because the decision represented a substantial clarification of the law. Thus, in the interest of justice, an opportunity to retry that case in accordance with the newly announced standards was warranted. The same would hold true to the extent that new standards were applied to this case.