Mildred Prunty v. Arkansas Freightways, Inc., and Chuck Baugh , 16 F.3d 649 ( 1994 )

JOHNSON, Circuit Judge:

The petition for rehearing is GRANTED. We withdraw our opinion of August 4, 1993, and substitute the following.

Mildred Prunty worked for Arkansas Freightways, Inc. (“AFI”) from April 1987, until June 1,1989. Throughout the last nine months of her employment with AFI, Mrs. Prunty was subjected to extreme and outrageous sexual harassment by her supervisor, Chuck Baugh. Mrs. Prunty brought this cause of action against AFI and Mr. Baugh,¹ alleging that both defendants were liable for intentional infliction of emotional distress and violations of Title VII² and the Texas Commission on Human Rights Act³ (“article 5221k”). Although the district court found that Mrs. Prunty had suffered severe emotional distress at the hands of Mr. Baugh, it held that AFI was not liable for the damages which flowed therefrom. The court also found that AFI was responsible for the sexual harassment of Mrs. Prunty, having violated Title VII. However, the court held that neither Title VII nor article 5221k authorized the type of relief which Mrs. Prunty sought. We affirm in part and reverse and remand in part.

I. Facts and Procedural History

Arkansas Freightways, Inc. is a trucking company which has numerous terminals throughout several states, including Texas. In 1987, AFI opened a terminal in Paris, Texas, and hired Mildred Prunty as a clerical worker for that terminal. Mrs. Prunty had the responsibility, for the most part, of running the entire Paris operation. Among other things, she interviewed applicants for truck-driver positions, made recommendations as to which applicants should be hired, dispatched drivers, ensured that the trucks were maintained, performed administrative functions, took care of customer service, and, if necessary, drove trucks. On July 13,1987, AFI promoted Mrs. Prunty to operations supervisor and made her a salaried employee.

From the beginning of her employment until as late as September 1988, Mrs. Prunty was supervised by Robert Smart, the terminal manager in charge of the Paris and Sherman terminals.⁴ AFI hired Chuck Baugh as the terminal manager for the Paris terminal in September 1988. Shortly after his arrival in Paris, Mr. Baugh began to daily make vulgar, offensive, and degrading comments about Mrs. Prunty both to Mrs. Prunty and to AFI truck drivers and dock workers.

Throughout this time, Mrs. Prunty communicated with Baugh’s supervisor, Mr. O.D. Rippy. Mr. Rippy, the vice president of AFI’s southwestern operations, worked in the Dallas office. Mrs. Prunty telephoned Mr. Rippy several times to discuss Baugh’s unprofessional behavior. She also wrote a letter to Mr. Rippy to inform him of Baugh’s abusive language and scurrilous remarks. She ended the letter by asking Rippy for help.⁵ Mrs. Prunty’s husband also telephoned Mr. Rippy to inform him of the abuse which Mrs. Prunty was experiencing. Mr. Prunty told Rippy about the remarks and gestures which Mr. Baugh had made to and about Mrs. Prunty and asked him to put an end to the situation. However, Mr. Rippy informed the Pruntys that Mr. Baugh and Mrs. Prunty would have to work out the problems themselves.

Receiving no help from Mr. Rippy, Mildred Prunty sent a letter through express mail to Mr. Sheridan Garrison, AFI’s president. In this letter, she stated that Mr. Baugh had made rude and obscene comments to her and about her. As a result of this letter, Mr. Rippy, the vice president who had previously ignored Mr. and Mrs. Prunty’s pleas for help, was ordered to investigate the Paris office to determine whether Mrs. Prunty’s allegations were meritorious. Rip-py then determined that the allegations were, indeed, legitimate. He had the workers at the Paris terminal to write down the types of statements which Baugh had made about Prunty. Mr. Rippy then faxed those statements to AFI’s office in Arkansas. Chuck Baugh was promptly dismissed.

Because Rippy faxed the statements, additional AFI employees were able to view the vulgarities spoken by Mr. Baugh to and about Mrs. Prunty. Baugh’s replacement, Scott Harris, was one of the Arkansas employees who read the statements. Mrs. Prunty testified that when she learned that Scott Harris knew about the obscenities uttered about her, she felt so humiliated and degraded that she could no longer work with or for him. Prunty therefore resigned her position as operations supervisor⁶ and found employment in Dallas with the United States Postal Service.

Prunty brought this cause of action in Texas state court, and AFI removed it to federal court. After a bench trial, the district court found that Baugh’s conduct was intentional, offensive, extreme, and outrageous; the court further held that Baugh’s conduct created an abusive, hostile, and offensive working environment. The court decided that the sexual harassment was so pervasive that AFI was charged with constructive knowledge thereof. Further, finding that Mr. Rippy actually knew of the sexual harassment, the court found that Rippy had done nothing to remedy the problem prior to April 1989— when Prunty contacted AFI’s president.⁷ The district court also determined that Mrs. Prunty had, indeed, suffered severe emotional distress as a result of Baugh’s conduct and that Prunty had successfully established a Title VII claim against AFI.

However, the court went on to hold that Mrs. Prunty was not entitled to any relief. Furthermore, the court decided that AFI could not be held liable for the intentional infliction of emotional distress because the court determined that Baugh had not acted within the course and scope of his employment.⁸ Finally, the court denied Mrs. Prunty\s requests for compensatory and punitive damages under Title VII and article 5221k because it concluded that such damages could not be recovered under those provisions.

Mrs. Prunty appeals, challenging the district court’s legal conclusions that Title VII and article 5221k disallow the recovery of compensatory and punitive damages. She also challenges the district court’s holding that AFI could be liable for Baugh’s actions only if Baugh acted within the course and scope of his employment.

II. Discussion

A. Title VII and Article 5221k Damages

Mrs. Prunty sought damages for the differences in wages and benefits between her job at AFI and her position with the Postal Service. She also sought damages for the travel expenses she incurs in driving to and from Dallas each day. The district court, hov/ever, determined that Mrs. Prunty presented no evidence of wage or benefit differentials.⁹ The court further decided that Title VII and article 5221k do not authorize the grant of compensatory and punitive damages under their provisions. The district court’s interpretation of those statutes was a legal conclusion which this Court would usually review de novo. Palmco Corp. v. American Airlines, Inc., 983 F.2d 681, 684 (5th Cir.1993). However, we need not address the propriety of the district judge’s conclusions, for our review of the record reveals that Mrs. Prunty did not present any evidence of damages whatsoever.

It is truistic, indeed elementary, that one who seeks compensatory damages must present evidence of those damages. Dan B. Dobbs, Remedies § 3.2, at 140 (1973). Hence, when one of the prima facie elements of a claim is damages and the claimant fails to introduce evidence of those damages, he or she commits a fatal error. In such cases, the district court has no choice but to deny the monetary relief requested. Thus, in this case, Mrs. Prunty’s failure to prove damages precluded her recovery of those damages, regardless of whether Title VII and/or article 5221k authorized the type of damages she requested.¹⁰ We therefore affirm the district court’s denial of the requested relief under Title VII and article 5221k, albeit for reasons other than those given by the district court.

B. Ratification

The district court concluded that an employer can be held hable for the intentional torts of its employee only when the employee acts within the course and scope of his employment and when the act furthers the object for which the employee was hired. This legal conclusion is subject to de novo review. Palmco Corp., 983 F.2d at 684.

A review of Texas law reveals quite readily that the district court erred in its legal conclusion. The law has been well-settled in Texas for well over a century that if an employer or a manager for an employer ratifies¹¹ or approves the intentional, malicious, or grossly negligent acts of an agent, the employer may be liable, not only for compensatory damages, but also for exemplary damages.¹² Purvis, 595 S.W.2d at 104; King, 234 S.W.2d at 404; Ft. Worth Elevators Co., 70 S.W.2d at 404-06; Gulf, Colorado and Santa Fe Ry. Co. v. Reed, 80 Tex. 362, 15 S.W. 1105, 1107 (1891); Hays v. Houston and Great Northern R.R. Co., 46 Tex. 272 (1876); Shearson Lehman Hutton, Inc. v. Tucker, 806 S.W.2d 914, 925 (Tex.App.—Corpus Christi 1991, writ dism’d w.o.j.); Al Parker Buick Co. v. Touchy, 788 S.W.2d 129, 130 (Tex.App.—Houston [1st Dist.] 1990); Group Hospital Services, Inc. v. Daniel, 704 S.W.2d 870, 877 (Tex.App.—Corpus Christi 1985); see also Hitt v. East Texas Theatres, Inc., 203 S.W.2d 963, 969 (Tex.Civ.App.—Texarkana 1947) (Finding that the employee had not acted within the scope of his employment, the court then turned to the question of whether the employer had ratified the employee’s acts).

Very few Texas appellate courts have discussed ratification in tort cases. However, the few courts which have faced that question have decided that ratification may occur when the employer or its vice-principal confirms, adopts, or fails to repudiate the acts of its employee. Hinote v. Oil, Chemical and Atomic Workers International Union, AFL-CIO, Local 4-23, 777 S.W.2d 134, 141 (Tex.App.—San Antonio 1989, writ denied); K-Mart No. 4195 v. Judge, 515 S.W.2d 148, 153, 154 (Tex.Civ.App.—Beaumont 1974, writ dism’d w.o.j.). The San Antonio Court of Appeals accepted a trial court’s definition of ratification in Hinote:

“RATIFICATION” means the adoption, confirmation or failure to repudiate prior unlawful acts which were not legally binding at a time when the [defendant] had the right and knowledge of facts necessary to repudiate such conduct; but which, by ratification or by the failure to repudiate, become the acts of the defendant.

777 S.W.2d 134, 141. The Beaumont Court of Civil Appeals held in Judge that since the defendant company’s manager had not repudiated the intentional, tortious acts his employees, the defendant company, as a matter of law, had ratified the acts. Judge, 515 S.W.2d at 153, 154.

Additionally, the Texas Supreme Court has determined that in some cases, an employer’s retention of an employee who has committed a tort may constitute ratification. See Reed, 15 S.W. at 1107; International and Great Northern R.R. Co. v. McDonald, 75 Tex. 41, 12 S.W. 860, 862 (1889). When the company 1) knows about the employee’s acts, 2) recognizes that the employee’s acts will continue if he is retained, 3) does nothing to prevent the ongoing tortious acts, and 4) chooses to retain the employee, the company ratifies the tortious acts and may be held liable for exemplary damages. See Reed, 15 S.W. at 1107; McDonald, 12 S.W. at 862.

In this case, the district court found that Mr. Rippy, the vice president of AFI’s southwestern region — a vice principal of the corporation¹³ — knew about Baugh’s harassment of Prunty and took no action to end the harassment. Until Mrs. Prunty contacted AFI’s president, Mr. Garrison, Rippy did absolutely nothing about the sexual harassment. Indeed, Mr. Rippy only investigated Prunty’s allegations after he was ordered to do so by a superior officer.

In regard to ratification, of course, it is evident that before one can ratify an act so that it becomes his own, he must know of the act with which he is charged. In Wilson v. Monarch Paper Co., we observed that “although [the employer’s] conduct often rises to the level of illegality, except in the most unusual cases it is not the sort of conduct, as deplorable as it may sometimes be, that constitutes ‘extreme and outrageous’ conduct.” 939 F.2d 1138, 1143 (5th Cir.1991). In other words, even though conduct may violate Title VII as sexual harassment, it does not necessarily become intentional infliction of emotional distress under Texas law. Only in the most unusual cases does the conduct move out of the “realm of an ordinary employment dispute,” Dean v. Ford Motor Credit Co., 885 F.2d 300, 307 (5th Cir.1989), into the classification of “extreme and outrageous,” as required for the tort of intentional infliction of emotional distress. See Wilson, 939 F.2d at 1145.

No one can seriously doubt — and the district court specifically found — that “Mr. Baugh’s sexual harassment of [Mrs. Prunty] was extreme and outrageous.”¹⁴ (Emphasis added.) However, if Mr. Rippy were made aware only of “an ordinary employment dispute,” he plainly, under the authority of this Court’s precedent, did not have sufficient knowledge to ratify Mr. Baugh’s “extreme and outrageous” tortious conduct so as to expose AFI to liability for the tort of intentional infliction of emotional distress.

This Court must look, then, to the district court’s findings of fact and conclusions of law to determine whether Mr. Rippy’s knowledge reached the level required for ratification. The district court found, inter alia, the following:

... Mr. Baugh subjected plaintiff directly and indirectly to sexual comments and innuendo. This conduct continued during the entire time Mr. Baugh was terminal manager. Plaintiff complained to Mr. Baugh’s supervisor, O.D. Rippy, about the working conditions ... on several occasions _ [T]he Court finds that Mr. Rip-py was aware of the sexual harassment of plaintiff by Mr. Baugh_ Mr. Rippy took no action to remedy the situation.... [P]laintiff contacted defendant’s president ... concerning the problems at the Paris Terminal. Mr. Baugh’s actions toward plaintiff were offensive, unwelcome, and constituted sexual harassment. This harassment altered the conditions of plaintiff’s employment with defendant and created an abusive, hostile, and offensive working environment- Mr. Baugh’s harassment was so pervasive that defendant is charged with constructive knowledge of such harassment_ Mr. Baugh’s sexual harassment of plaintiff was intentional and reckless, was extreme and outrageous [and] caused plaintiff severe emotional distress....

In order to establish a claim for intentional infliction of emotional distress, the plaintiff must prove: ... (2) that the conduct was extreme and outrageous; ... and (4) the emotional distress suffered by the plaintiff was severe. Dean v. Ford Motor Credit Co. Mr. Baugh’s actions amounted to an intentional infliction of emotional distress upon plaintiff.

Although the district court’s findings could have been more specific, this Court reads that court’s findings as a determination that Mr. Rippy not only knew of the sexual harassment, but also knew enough about the harassment to realize that Chuck Baugh’s conduct was extreme and outrageous.¹⁵ Although there is some dispute as to precisely what details were communicated to Mr. Rip-py, it was not clearly erroneous for the dis-triet court to so find, particularly in view of the pervasive and day-to-day recurrence of Mr. Baugh’s statements and actions.

Applying these facts to Texas’ definition of ratification reveals that Mr. Rippy ratified Mr. Baugh’s infliction of emotional distress upon Mrs. Prunty. We therefore hold that the district court, while not clearly erring in its findings of fact, erred in its conclusion of law by denying Mrs. Prunty damages based upon her claim of intentional infliction of emotional distress.

III. Conclusion

Because Mrs. Prunty failed to introduce evidence of her general and special damages, the Court need not reach the Title VII and article 5221k issues. Clearly without such evidence of damages, Mrs. Prunty is not entitled to the relief she requested. We therefore AFFIRM the district court’s denial of that relief.

As to the intentional infliction of emotional distress claim, however, the district court failed to apply the facts which he found— Rippy knew of the sexual harassment but failed to remedy the situation — to applicable Texas law. Such was error. Applying those facts to Texas law compels the conclusion that Mr. Rippy ratified Baugh’s actions, thereby subjecting AFI to liability for actual and exemplary damages. This Court must therefore REVERSE and REMAND the intentional infliction of emotional distress claim to the district court for the assessment of damages.

1 . The district court dismissed the claims against Mr. Baugh at trial because Mrs. Prunty had failed to serve Baugh with her complaint.

2 . 42 U.S.C. § 2000e et seq.

3 . . Tex.Rev.Civ.Stat.Ann. art. 5221k (Vernon 1987 and Vernon Supp.1992).

4 . Mr. Smart worked out of the Sherman terminal and visited the Paris terminal just once per week.

5 . Mr. Rippy denies receiving this letter; however, the district court found that Mr. Rippy was aware of Mr. Baugh’s conduct. AFI has not challenged this finding.

6 . She stated that she also resigned because she had not been promoted to the terminal manager position after AFI fired Baugh. However, the district court found that she never applied for the position, that she did not inform her superior officers that she was interested in the position, and that she was not qualified for the position. There was also evidence that Mrs. Prunty had informed her fellow workers that she would resign regardless of whether AFI offered her the terminal manager position.

7 .The court specifically determined;

11. Plaintiff complained to Mr. Baugh's supervisor, O.D. Rippy, about the working conditions at the Paris, Texas[,] terminal on several occasions. Mr. Rippy was the Southwest Region Vice-President for defendant. Based on the credible evidence, the Court finds that Mr. Rippy was aware of the sexual harassment of plaintiff by Mr. Baugh.

12. Prior to April 1989, Mr. Rippy took no action to remedy the situation at the Paris Terminal.

13. In April 1989, plaintiff contacted defendant’s president, Seridan [sic] Garrison, concerning the problems at the Paris Terminal.

8 . Mrs. Prunty challenges this finding as clearly erroneous. However, this Court’s disposition of the other issues in this case relieves us of the necessity of reviewing that factual finding.

9 . Mrs. Prunty has not questioned this finding.

10 . At oral argument before this Court, counsel for Mrs. Prunty asserted that she had introduced evidence that Mrs. Prunly's post office job required her to drive to and from Dallas daily. However, proving that damages exist is only one component of proving damages. Claimants must also prove the amount of those damages. This, Mrs. Prunty failed to do.

11 .The ratification question is properly before this Court. Indeed, counsel for AFI acknowledged during his oral argument before this panel that Prunty had proffered the ratification issue before the district court during the trial. Prunty likewise properly raised the ratification issue before this Court: During oral arguments she averred that AFI had ratified Chuck Baugh's actions. More importantly, under the section of her brief entitled "Arkansas Freightways is liable for the actions of Chuck Baugh for the intentional infliction of emotional distress upon Mildred Prunty,” she explained that Rippy knew of the sexual harassment but did nothing to stop it. Such a failure to repudiate the egregious acts of Baugh is, by definition, ratification. Hence, the ratification ball has never been hidden from any participant in this litigation — not the parties, not the district court, nor the members of this Court.

12 . If the employer’s liability is based upon re-spondeat superior grounds, then the employee must have acted within the scope of his employment. Country Roads, Inc. v. Witt, 737 S.W.2d 362, 364 (Tex.App.—Houston [14th Dist.] 1987). However, the Texas Supreme Court made clear in Ft. Worth Elevators Co. v. Russell that ratification is not based upon respondeat superior principles. Ratification is based upon the wrongdoing of the employer — the employer's ratification of the intentional or grossly negligent acts of its agents. 123 Tex. 128, 70 S.W.2d 397, 402-03, 406 (1934).

Outside the respondeat superior realm, the scope of employment requirement arises only in one context. An employer may be held liable for exemplary damages for the malicious or grossly negligent acts of its manager only if that manager acted within the scope of his or her employment. No scope of employment requirement exists in other non-respondeat superior situations. Hence, Texas courts have repeatedly and consistently held that an employer is liable for exemplary damages because of the willful acts of its agents if, but only if:

(a) the principal authorized the doing and the manner of the act, or

(b) the agent was unfit and the principal was reckless in employing him, or

(c) the agent was employed in a managerial capacity and was acting in the scope of employment, or

(d) the employer or a manager of the employer ratified or approved of the act.

Purvis v. Prattco, Inc., 595 S.W.2d 103, 104 (Tex.1980) (quoting King v. McGuff, 149 Tex. 432, 234 S.W.2d 403, 404 (1950) (emphasis added)); see also Ft. Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 404-06 (1934).

13 . Because Mr. Rippy is a corporate officer and because he has the authority to direct, supervise, hire, and discharge subordinates, he is a vice principal whose acts may subject AFI to liability for exemplary damages. Ft. Worth Elevators Co., 70 S.W.2d at 406; Southwestern Bell Telephone Co. v. Reeves, 578 S.W.2d 795, 800 (Tex.Civ.App.—Houston [1st Dist.] 1979, writ ref'd n.r.e.).

14 . The district court found, and AFI concedes, that Baugh’s conduct and statements were extreme and outrageous. Mrs. Prunty and other workers testified about some of the things which Mr. Baugh did: Among other things, he often told Mrs. Prunty and the other workers about sexually explicit dreams he had of Mrs. Prunty. On at least one occasion, Baugh told Prunty that he had seen a nude picture of her in a magazine. He claimed that the woman in the picture was hanging from a tree with her legs over the tree limb so as to expose and display her pudendum.

Baugh also described how he thought Mrs. Prunty's sexual organs looked in extremely graphic and vulgar ways. He told the truck drivers and dock workers that “[Prunty’s] pussy probably looks like she was hit between the legs with a double axe” and that "she would have to have a two-by-four to keep herself from falling in." Additionally, he constantly accused Mrs. Prunty of engaging in sexual acts with another worker. One witness testified that Baugh was “always” saying that “Jerry is fucking [Prunty] up here while we’re gone [from the office].” Further, Chuck Baugh brought obscene items, including a crocheted replication of a man's genitalia, to work to show them to Mrs. Prunty and to the other workers. He also talked to Prunty, over her protestations, about the sexual acts of animals. Once, he even touched Mrs. Prunty’s breast.

All of the witnesses who had worked in the Paris terminal acknowledged that these types of comments and activities occurred on a day-today basis. Although the other employees were all men, they testified that they were offended by Baugh's conduct. Further, each felt that the comments were extremely degrading to Mrs. Prunty. In fact, one of AFI’s employees testified that he believed that Mr. Baugh's conduct had placed Mrs. Prunty on the brink of a nervous breakdown.

15 . The district court's listing of the factors from Dean evinces its awareness that the additional findings — beyond those necessary for a Title VII claim — were required to establish the tort. It is undoubtedly for this reason that the court specifically found not only that Mr. Rippy was aware of the sexual harassment, but also that the sexual harassment was "extreme and outrageous [and] caused plaintiff severe emotional distress.”