City of Houston v Rhule

July 25, 2011-Case Report

 

City of Houston v. Rhule

 

In an “old law” worker’s compensation case the City of Houston (“the City”), and Christopher Rhule (“Rhule”), a former firefighter for the Houston Fire Department, entered an agreed judgment (“Agreement”) settling the case.  The Agreement provided in part that Rhule shall receive lifetime open reasonable and necessary medical [expenses] for the injuries made the basis of his claim as provided by the Texas Worker’s Compensation Act with a mutually agreed upon doctor.

                       

The City subsequently breached the Agreement, and Rhule filed suit to enforce the Agreement.

 

Rhule’s suit alleged breach of contract by the City.  Rhule sought damages for “out-of-pocket expenses, incidental expenses, loss of the ‘benefit of the bargain,’ cost of reasonable medical care and treatment in the past, cost of medical care and treatment which will in all reasonable medical probability be required in the future, physical pain and suffering in the past . . . , mental anguish damages . . . , nominal damages, attorney’s fees necessary to bring and prosecute this action, [and] costs of court.”  Alternatively, Rhule sought specific performance of the Agreement and actual damages, costs of court, and attorney’s fees.  Rhule also sought a declaratory judgment to clarify his rights under the Agreement specifically including his right to ongoing lifetime medical expenses relating to his injury.  Rhule also specifically sought attorney’s fees under Chapters 37 and 38 of the Civil Practice and Remedies Code.

 

The City filed a plea to the jurisdiction, arguing that Rhule’s breach of contract claim and request for declaratory relief were barred.  The trial court denied the plea to the jurisdiction and the parties proceeded to a trial before a jury.

 

 At trial jury found in Rhule’s favor and awarded damages of $127,500 for the City’s breach of the Agreement. Damages were comprised of $50,000 for past physical pain, $75,000 for past mental anguish, and $2,500 for out of pocket expenses.  The jury also found that Rhule was entitled to attorney’s fees in the amount of $53,000 for trial, $10,000 for an appeal to the Court of Appeals, and $20,000 for an appeal to the Texas Supreme Court.

 

The City appealed to the Court of Appeals contending that (1) the trial court lacked subject matter jurisdiction over Rhule’s damages to the extent that the requested damages exceeded remedies allowed by the Worker’s Compensation Act; (2) the trial court erred in submitting a question to the jury that allowed it to award Rhule damages for physical pain as a result of the City’s breach of the Agreement; (3) the trial court erred in entering judgment on the jury’s award of damages for mental anguish because there was no evidence of Rhule’s propensity for mental anguish at the time the parties entered into the Agreement; and (4) the trial court’s award of attorney’s fees was erroneous because Rhule failed to establish any damages that would support an award of attorney’s fees, or, alternatively, Chapter 38 of the Civil Practice and Remedies Code does not authorize an award of attorney’s fees against a municipality.

 

The Court of Appeals held that by entering into the Agreement settling Rhule’s worker’s compensation claim, the City had waived its immunity from liability under that agreement.  The Legislature’s waiver of the City’s immunity from suit for the purposes of Rhule’s original worker’s compensation claim also waives the City’s immunity from suit for Rhule’s suit to enforce the Agreement. 

 

The Court held that damages for physical pain are not traditionally recovered in a breach of contract suit concluding that the trial court should not have submitted a question to the jury on damages for physical pain.  The Court of Appeals reversed the award of $50,000 for physical pain sustained as a result of the City’s breach of the Agreement.

 

The Court of Appeals modified the jury award denying the $50,000 for physical pain and as modified affirmed the verdict.

 

Justice Massengale dissented arguing a suit against a governmental entity for pain and suffering or mental anguish damages is contrary to Labor Code Section 416.002(b). Labor Code Section 416.002(b) provides “[a]n action against a governmental entity or unit or an employee of a governmental entity or unit for a breach of the duty of good faith and fair dealing is governed by Chapters 101 and 104, Civil Practice and Remedies Code.”

 

 

 

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