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Richard Rosen Inc. v. Mendivil

Court of Appeals of Texas, Eighth District, El Paso

November 23, 2005


          Appeal from the 171st District Court of El Paso County, Texas (TC# 96-2579)

          Before Barajas, C.J., McClure, and Chew, JJ.


          DAVID WELLINGTON CHEW, Justice

         Appellee Fernando Mendivil sued his former employer, Richard Rosen, Inc., and its vice-president Kirk Sales for intentional infliction of emotional distress and defamation based on their conduct leading to and after the end of Mr. Mendivil's employment with the company.[1] The jury found in favor of Mr. Mendivil on both causes of action. The defendants filed a motion for judgment notwithstanding the verdict (“JNOV”) and after a hearing, the trial court took the motion under advisement. The trial court granted the JNOV with respect to the punitive damages award as to Mr. Sales. The trial court then rendered judgment on the verdict and awarded Mr. Mendivil $290, 120 in actual damages and $25, 000 in exemplary damages, plus costs and interest. In three issues, Appellant Richard Rosen, Inc. contends the trial court erred in denying its amended motion for JNOV because there was no evidence to support Mr. Mendivil's causes of action or the award of exemplary damages. We affirm the trial court's judgment in part and reverse and render in part.

         From 1992 to 1995, Appellant operated numerous retail stores in Texas and New Mexico. In late August 1992, a former employer of Mr. Mendivil recommended him for a managerial position with Appellant. Mr. Mendivil had previously managed a clothing store in El Paso. Mr. Mendivil interviewed with the owner Richard Rosen, [2] Mark Rosen, and Kirk Sales and was subsequently hired.

         In November 1992, Mr. Mendivil started employment with Appellant as a supervisor for the company's stores in New Mexico. Mr. Mendivil moved to Santa Fe, New Mexico for the job. He was to receive a salary, a ten percent bonus or commission based on the gross profits for each store he supervised, an apartment, and sometime in the future, a van. Mr. Mendivil reported to Kirk Sales, the vice president of the company. To start, Mr. Mendivil made some quick changes to the Santa Fe store and the holiday season went very well. He then took over supervision of the Las Vegas store and increased sales at that store after remodeling it. By 1994, Mr. Mendivil was supervising six stores in New Mexico. In March 1995, the company issued a memorandum formally announcing Mr. Mendivil's position as the immediate supervisor of the company's New Mexico operations. The memorandum praised Mr. Mendivil as having “a good track record” and for being a “hard worker.”

         Mr. Mendivil traveled between the New Mexico stores on a weekly basis, to delegate certain tasks and to see how each store was progressing. When he traveled between the stores, Mr. Mendivil would also transport special orders, and certain products to balance out inventory. Mr. Mendivil was required to attend weekly management meetings in El Paso. Six months after he started with the company, Mr. Sales and Mr. Rosen offered to buy Mr. Mendivil a car, but he suggested that they buy him a van so that he could move products between the stores as needed. The company purchased a 1994 Chevy Astro Van for Mr. Mendivil's use and it reimbursed his gas and maintenance costs.

         After March 1995, Mr. Mendivil began having communication problems with Mr. Sales and Mr. Rosen following a disagreement about the sales strategy for the fabric department. In April, Mr. Mendivil began to have additional problems with Mr. Sales and Mr. Rosen because they wanted to cut back on mailing costs. In a letter to Mr. Mendivil, Mr. Rosen complained about the need to cut expenses and criticized Richard Garcia, the manager of the Alamogordo store. Mr. Mendivil received more letters similar to the April letter from Mr. Rosen. In addition, Mr. Rosen reversed changes that Mr. Mendivil had made in remodeling the stores. Mr. Mendivil decided to resign from the company because he felt he was not getting cooperation from Mr. Rosen and Mr. Sales. Prior to making his decision to resign, he had no indication that they had any intention to fire him.

         Mr. Mendivil met with Mr. Sales on June 10, 1995 at the Santa Fe store. He told Mr.Sales that he planned to resign. Mr. Sales asked him why and Mr. Mendivil explained to him he was not getting cooperation from Mr. Rosen, particularly with regard to the remodeling changes he had ordered. Mr. Sales as was his custom, reminded Mr. Mendivil about being the highest paid employee and having a van, as his company perk. Mr. Mendivil told him that up until then, he had done a very good job in the stores, had increased sales, and trained good managers, but felt it was better that he move on because he did not want it to become a bad situation between them. Mr. Mendivil said he would stay on to do the inventory and then settle up on his bonuses. Mr. Sales thanked Mr. Mendivil for wanting to stay on to do all the inventory, praised him for his work, and promised to give him a good recommendation. During their conversation, Mr. Mendivil mentioned the company van because they had bought the van for him after he “ran [his] truck into the ground.” Mr. Sales told Mr. Mendivil that he would talk to Mr. Rosen and work out a deal. He and Mr. Sales agreed that the resignation would be effective August 1.

         In his deal with Mr. Sales, Mr. Mendivil gave his notice of resignation, but wanted to settle up on the bonus, which was based on the inventory taken of all the stores. Mr. Sales told Mr. Mendivil that it would take until August 1 to tabulate the inventory, so the date of August1 was chosen for purposes of settling up the bonus and also Mr. Mendivil would have time to finish remodeling the stores.

         Mr. Mendivil and Mr. Sales telephoned Mr. Rosen and informed him that “Fernie just resigned.” Mr. Sales gestured to Mr. Mendivil to leave so he could continue the conversation in private and Mr. Mendivil left the room to continue preparing the store for inventory that afternoon. According to Mr. Mendivil, no one ever told him that he was abusive, he never was told he was a bully, and they never told him of any complaints against him.

         On June 26, 1995, Mr. Mendivil had a conversation with Mr. Sales at the store in El Paso on the sales floor. Mr. Mendivil was there to pick up some merchandise to take back to Santa Fe on his return. Mr. Sales suggested that they move up the date that he was suppose to be leaving because it might be better for the company. Mr. Mendivil reminded him that they had made an agreement and told him that he had already set up his schedule based on that date and it would be an inconvenience. Mr. Sales said “[a]ll right” and “[w]e'll go discuss it with [Mr. Rosen].” Mr. Rosen, however, had already left that day. Mr. Mendivil tried to talk to Mr. Rosen on June27, but Mr. Rosen had gone out to his ranch.

         On June 28, Mr. Mendivil spoke with Mr. Rosen. By that time all the physical inventories of the New Mexico stores were complete. Mr. Mendivil went to Mr. Rosen's office and told him that Mr. Sales had mentioned to him the other day that he was thinking about changing his leaving date. Mr. Mendivil reminded Mr. Rosen that they had agreed upon the August 1 leaving date. He also told him that it was only fair that Mr. Rosen honor the agreed upon date since he had not left them hanging with inventories and so forth. Mr. Rosen agreed and then questioned him about why he was leaving. Mr. Rosen tried to talk Mr. Mendivil out of leaving, told him that he would call him, and said “I think we can fix all of this.”

         Two days later, Mr. Mendivil wrote a letter to Mr. Rosen. In the letter, Mr. Mendivil stated the following in part:

As you are well aware, I gave notice to resign as supervisor of your stores, on Sat. June 10th. I explained to you that my reason was that I felt I was being forced to resign by you, because of lack of your support from you as owner of this company. I felt it impossible to do my job properly as I have been, without this support which you had shown me in the previous years. In addition, the constant references by Kirk Sales made toward paying me the highest salary in the company and paying for my apartment and that [the] company bought me a van. This plication [sic] that I wasn't worth these expenses and constant harassment about this, was to much to be dealing with. I believe the van was to haul merchandise from store to store, or do I get to keep it?
My resignation was accepted by Mr. Kirk Sales. After discussion, we both agreed my last day of employment would be 8/1/95. I offered to stay and complete the year end inventories and releave [sic] Robert Garcia during his vacation. In addition it would give Kirk enough time to finish the year end finacial [sic] statements. Kirk thanked me and accepted this very fair notice. He said he was very appreciative of my effort to make a smooth transition.
On Monday, 6/26/95, Kirk and I again discussed my departure. He stated that you all had discussed my leaving and felt it best I leave at once. I stated that I had made up my schedule and plans to leave on 8/1/95, as previously agreed. I told him it was not very fair to displace me in this manner, since he had accepted the time table we discussed on Sat. June 10th; when I first gave him my resignation. I tryed [sic] to finish our discussion, but he was too busy on the phone with Phil. He suggested I talk to you, but you had left the building. I again tryed [sic] to talk to you on Tues. 6/27/95, but he told me you were at >the ranch.' When you and I finally were able to talk on Wed. 6/28/95, I was able to explain why I felt you were forcing me to resign, but you had to leave before we discussed my departure date etc. You asked for my home phone number and said you would call, but never did.
At this writing, I am not sure what you actually want me to do!

         Mr. Mendivil also requested that they meet to discuss how he should account for his time through August 1 as well as severance-related matters. Mr. Mendivil received no response to the June 30 letter.

         On about July 1, Mr. Mendivil began to hear rumors from other employees of the company that he had been fired. He told them that he had resigned and that they had misunderstood the news of his resignation. Mr. Mendivil decided to fax a letter to all store managers as well as to Mr. Rosen. The July 1 letter stated in part:

There have been incorrect rumors spread, that I have been fired by Mr. Richard Rosen. Employees at several stores have stated that they recieved [sic] a call from Mr. Rosen himself. This incorrect and damaging and vicious rumors are very damaging to my character. I would like to correct this by making you aware of the truth! I resigned on 6/10/95. I gave notice to Mr. Kirk Sales that my last day would be 8/1/95, and he agreed and accepted this date. If there is any change to this date, it will be at the request of Mr. Rosen, and new arrangements will be made. I will honor my word to stay till 8/1/95 and will make myself to you, available.

         No one in the company contacted Mr. Mendivil about the July 1 letter.

         Right before the July 4 weekend, Mr. Mendivil received a message from the Santa Fe store manager that he was wanted in El Paso on Monday. Mr. Mendivil packed up a few items of clothing and picked up some merchandise to deliver to the Alamogordo store on his way to El Paso. When Mr. Mendivil arrived at the store in Alamogordo, the store manager, Richard Garcia, asked him what he was doing there and told him Mr. Rosen said he had been fired. Mr. Mendivil was shocked by Mr. Garcia's statement and could not believe what he was hearing.

         According to Mr. Garcia, Mr. Rosen called him that day and told him that Mr. Mendivil was no longer with the company and had been fired. Mr. Garcia was shocked by the news and, at first, thought less of Mr. Mendivil because “when someone gets fired there's probably a reason for it.” Mr. Garcia recalled that Mr. Mendivil wondered aloud how Mr. Garcia ...

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