Housing Authority of the City of Crystal City, Texas v. Ricardo S. Lopez

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-97-00032-CV

Housing Authority of the City of Crystal City, Texas, Appellant

v.

Ricardo S. Lopez, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 299TH JUDICIAL DISTRICT

NO. 94-04098, HONORABLE CARL C. ANDERSON, JUDGE PRESIDING

Ricardo Lopez sued the Housing Authority of the City of Crystal City, Texas, alleging

retaliatory discrimination in violation of the Whistleblower Act. (1) The trial court rendered judgment on a jury

verdict, awarding Mr. Lopez $28,549.57 in past lost earnings, $10,000 in future lost earning capacity,

$25,000 for mental anguish, and $100,000 in exemplary damages. The Housing Authority appeals, raising

legal and factual sufficiency points of error. We will reverse and render in part, remand in part, modify the

judgment in part, and affirm the judgment as modified.

BACKGROUND

Mr. Lopez was employed by the Housing Authority as Assistant Executive Director.

Shortly after requesting a legal clarification from the United States Department of Housing and Urban

Development (HUD) regarding a possible conflict of interest involving the Housing Authority, Mr. Lopez

was downgraded in title and authority and given an extremely poor evaluation. Sometime later he reported

to HUD three possible violations by the Housing Authority of federal and local rules. Within less than a

week he was demoted to a position earning less than half of his previous salary. Mr. Lopez resigned shortly

thereafter and remained unemployed for five and a half months. He sued the Housing Authority alleging

a violation of the Whistleblower Act.

STANDARD OF REVIEW

In six points of error the Housing Authority contends the trial court erred because there was

no evidence or, in the alternative, insufficient evidence to support the jury verdict. In deciding a no-evidence point, we consider only the evidence and inferences tending to support the finding of the trier of

fact and disregard all evidence and inferences to the contrary. We will uphold the finding if more than a

scintilla of evidence supports it. See Burroughs Wellcome Co. v. Crye , 907 S.W.2d 497, 499 (Tex.

1995) . In deciding a factual-sufficiency point we consider and weigh all the evidence and should set aside

the judgment and order a new trial only if the judgment is so contrary to the overwhelming weight of the

evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

Ultimately this appeal turns on whether the record supports the jury verdict in favor of Mr. Lopez.

DISCUSSION

Violation of the Whistleblower Act

In point of error one the Housing Authority contends the evidence is legally and factually

insufficient to support the jury's finding that it retaliated against Mr. Lopez because of his reports to HUD.

The Whistleblower Act provides for the recovery of damages and other relief when a governmental entity

discriminates against a public employee who in good faith reports a violation of law to an appropriate law

enforcement agency. Former Act §§ 554.002, .003. If the employer's discriminatory act occurs within

ninety days of the employer's report it is presumed, subject to rebuttal, that the wrongful act was committed

because the employee made the report. Id. § 554.004.

The relevant time period spans only four months, beginning in September 1993 and ending

with Mr. Lopez's resignation in January 1994. Prior to this period Mr. Lopez had been employed by the

Housing Authority for six years; for four of those years he held the position of Assistant Executive Director

earning an annual salary of $22,800. By the time he resigned, his position had been downgraded to Clerk

(Clerk of the Works) and his salary reduced to $10,400. On September 28, the Housing Authority

Board voted to award a contract to a general contractor whose proposed subcontractor was the brother

of the Chairperson of the Board. The following day Mr. Lopez called HUD, the agency which oversees

and subsidizes the Housing Authority, informing HUD of a potential conflict of interest and requesting

clarification. HUD's legal counsel responded that because the Chairperson had abstained from voting,

there were no federal concerns but a legal opinion regarding state law and local regulations would be

necessary. Mr. Lopez relayed this information to the Interim Executive Director, and reminded her again

on October 22 to seek legal advice. On November 12, Maria Farias assumed the position of Executive

Director. Less than a week later, the Chairperson wrote Ms. Farias requesting clarification regarding the

possible conflict and noting Mr. Lopez's concerns. Ms. Farias gave Mr. Lopez a copy of this letter. On

December 9, he again advised the Board that according to HUD a legal opinion was necessary to resolve

any possible violation of state or local regulations; he sent a copy of this letter to HUD. On January 6, the

Chairperson sent a letter to HUD, urging HUD to provide the legal clarification because the Housing

Authority did not have the funds to seek local counsel. Expressing concern for her brother, the

subcontractor who had not yet been paid, the Chairperson stated she saw no conflict of interest and

suggested that prompt payment outweighed resolution of the conflicts issue.

Shortly after Ms. Farias arrived on November 12, she proposed increasing her salary from

$32,000 to $55,000. Mr. Lopez informed her that a comparability study was required by HUD before

her salary could be increased. She replied that she would consider it, but to his knowledge the study was

never done. On November 24, the Board voted to change Mr. Lopez's title from Assistant Executive

Director to Financial Officer. Although his salary remained the same, the position was lower in the

agency's managerial hierarchy and Mr. Lopez no longer exercised as much authority at the agency. Before

obtaining HUD approval of the title change the new Director effectively removed him from his duties as

Assistant Executive Director. Mr. Lopez was not even informed of the change until December 7, a week

after she downgraded his position.

On December 12, less than a month after the new Director began and just forty-five days

after Mr. Lopez first reported to HUD, Ms. Farias conducted a written evaluation that recommended

demoting or dismissing Mr. Lopez because his work rated only "satisfactory," "below expectations," or

"unsatisfactory." Copies were given to Mr. Lopez and the Board. At trial there was testimony that Mr.

Lopez had consistently received outstanding evaluations in the past. In fact, he had been seriously

considered for the position of Executive Director at least two times, including most recently when Ms.

Farias was chosen instead.

The juncture occurred when Mr. Lopez called HUD on January 4, 1994, reporting several

possible violations of federal and local rules, including: (1) the Director was living in the housing project

in a rent-free unit which HUD had not approved; (2) the Board had voted to waive the usual probationary

period for benefits for her without following the proper procedure; and (3) the Board had voted to increase

her salary without conducting a comparability study. Mr. Lopez had discussed all three concerns with the

Director, Ms. Farias, before he notified HUD. Coincidentally his report to her came just two weeks before

he received the poor evaluation. On January 10, he was demoted to Clerk at an annual salary of $10,400.

After his appeal to the grievance committee was unsuccessful, Mr. Lopez resigned on January 23.

At trial the jury charge, accompanied by proper instructions, asked, "[d]id the Housing

Authority of the City of Crystal City, Texas retaliate against Ricardo Lopez for reporting in good faith to

an appropriate law enforcement authority what he believed to be a violation of law?" The jury answered

yes. Whether we look at all the evidence or only that evidence favorable to the jury finding, we find the

jury could have concluded that the Housing Authority discriminated against Mr. Lopez because he reported

agency violations to HUD. Mr. Lopez was given a poor evaluation and his title changed less than two

months after he reported the first violation to HUD. Less than a week after Mr. Lopez reported the other

three violations, he was demoted to Clerk, incurring a substantial pay cut. Under the statute the jury was

free to presume a causal link existed between the reports and the discriminatory acts. Although there was

testimony that Mr. Lopez had neglected to take care of certain agency business, Mr. Lopez testified that

some of the tasks were not performed because he was out of the office on approved leave and that

obstacles imposed by Ms. Farias herself prevented him from completing other tasks. The jury could have

chosen to believe Mr. Lopez and concluded that the basis given for his demotion was pretextual. A witness

for the Housing Authority implied that Mr. Lopez was demoted because he was rude, refused to do his

work, and had "an attitude" regarding Ms. Farias. On cross-examination the attorney for Mr. Lopez asked

this witness:

Q: . . . What did you witness, personally, that makes you testify that way?

A: In some of the -- sometime -- a few of the meetings we had in the office, staff

meetings, he was always contradicting what [the Executive Director] had to say;

what had to be done.

Q: Telling her that she wasn't doing it by the rules and regulations?

A: Yes.

The jury could have chosen to believe the actual testimony rather than the implication. We hold there is

some evidence to support the jury's finding of retaliation and that finding is not so contrary to the

overwhelming weight of the evidence as to be clearly unjust. We overrule point of error one because the

evidence is both legally and factually sufficient to support the jury verdict.

Past Lost Earnings

The Housing Authority claims in point of error two that the trial court erred in rendering

judgment for past lost earnings in the amount of $28,549.57 because the evidence did not support such a

finding. Past lost earnings are the actual lost income due to the retaliation minus any benefits received, such

as unemployment or income from a new job; the amount is calculated from the time of retaliation to the date

of trial. Mr. Lopez introduced in evidence a chart listing his past lost earnings as (1) lost salary

($5,687.43); (2) unpaid compensation time ($396.06); (3) unpaid vacation time ($1,618.40); and (4) lost

benefits ($20,847.68). Mr. Lopez calculated his lost salary based on the week he worked at the Housing

Authority at a decreased salary plus income lost during his five and a half months of unemployment, less

unemployment benefits. Mr. Lopez did not testify as to his new salary and, therefore was unable to

calculate any dollar amount lost between the time he began his new job and the date of trial. He also

submitted evidence which revealed that the agency calculated his accumulated compensation and vacation

time using his reduced salary after the demotion rather than his former salary as Assistant Director. Mr.

Lopez also testified that he lost $1100 in medical and life insurance benefits, as part of lost benefits, the

amount he would have received had he not been demoted. Those amounts for which Mr. Lopez

introduced sufficient evidence total $8801.89.

While Mr. Lopez' testimony was sufficient to support the monetary awards for lost salary,

unpaid compensation time, unpaid vacation time, and insurance benefits, we find little evidence to uphold

the entire award of $20,847.68 for lost benefits. Under lost benefits, Mr. Lopez sought damages for

retirement, medical and life insurance, social security, vacation, sick leave, holidays, and annual salary

adjustment. Mr. Lopez did not provide a monetary breakdown of these elements and, thus, failed to

provide a sufficient basis for arriving at this total for lost benefits. Furthermore, we decline to uphold any

damages for loss of an "annual salary adjustment," which is a bonus given at the discretion of the Housing

Authority. We find the evidence both legally and factually insufficient to support an award of $20,847.68

for lost benefits with the exception of $1,100 in insurance. While we uphold $8801.89 in damages for lost

salary, underpaid compensation and vacation time, and lost health and life insurance benefits, we sustain

the second point of error as to the balance of $19,747.68 in lost benefits.

Future Lost Earning Capacity

In point of error three the Housing Authority claims the trial court erred in rendering

judgment for future lost earning capacity in the amount of $10,000 because the evidence does not support

such a finding. Recovery for future lost earning capacity is available under the Whistleblower Act. See

City of Ingleside v. Kneuper , 768 S.W.2d 451, 457 (Tex. App.--Austin 1989, writ denied). However,

the amount awarded must be based on something more than mere conjecture and must be "proved with

that degree of certainty of which the case is susceptible." Id. at 458-59 (quoting McIver v. Gloria , 169

S.W.2d 710, 712 (Tex. 1943); see also Booney v. San Antonio Transit Co. , 325 S.W.2d 117, 121

(Tex. 1959). After his demotion Mr. Lopez's salary was reduced to $10,400. The jury may have

surmised that such a demotion placed Mr. Lopez at a disadvantage in the job market, thereby subjecting

him to future losses. On the other hand, Mr. Lopez had every opportunity to present evidence illustrating

the exact disadvantage he suffered in lost future earnings as a result of his demotion. He testified that, after

his resignation, five and half months passed before he became employed again, but conspicuously failed

to testify as to his new salary. Without any evidence that his earning capacity had in fact been diminished,

the jury was left to merely speculate about Mr. Lopez's future loss of earning capacity. Facts existed but

were not revealed which could have provided the jury a basis for an intelligent answer. Because Mr. Lopez

failed to testify as to any basis for loss of future income, we hold there was legally and factually insufficient

evidence to support the jury award for future lost earning capacity.

Mr. Lopez's claim that the $10,000 represents the salary decrease from Assistant Director

(later Financial Officer) to Clerk is inapplicable here. Lost earning capacity addresses that which he will

be unable to make in the future due to the retaliatory demotion. Under his theory, the $10,000 represents

lost wages; these are an element of past lost earnings. Mr. Lopez has already received damages for the

lost salary caused by his pay cut and unemployment under his claim for past lost earnings. We sustain point

of error three.

Mental Anguish

The Housing Authority contends the trial court erred in awarding damages in the amount

of $25,000 for past mental anguish because the evidence did not support such a finding. We agree. The

trial court properly defined mental anguish as a "relatively high degree of mental strain and distress . . . more

than mere disappointment, anger, resentment, or embarrassment, although it may include all of these. It

includes mental sensation of pain resulting from such pain- ful emotions such as grief, severe

disappointment, indignation, wounded pride, shame, despair, or public humiliation." See Saenz v. Fidelity

& Guar. Ins. Co. , 925 S.W.2d 607, 614 (Tex. 1996); Wichita County v. Hart , 892 S.W.2d 912, 926

(Tex. App.--Austin 1994) (citing Kneuper , 768 S.W.2d at 460 ), rev'd on other grounds , 917 S.W.2d

779 (Tex. 1996). However, mental anguish damages may not be awarded without "direct evidence of the

nature, duration, severity of [plaintiff's] anguish, thus establishing a substantial disruption in his daily routine"

or other evidence of a high degree of mental pain and distress. Saenz , 925 S.W.2d at 614 (quoting

Parkway Co. v. Woodruff , 901 S.W.2d 434, 444 (Tex. 1995)); see Hart , 892 S.W.2d at 926 (requiring

plaintiff to show mental anguish beyond mere worry, disappointment or anger) (emphasis added).

In the present case we find that Mr. Lopez offered no evidence to support the jury's finding

that he suffered past mental anguish. In an attempt to support the finding he offers the following testimony:

Q: Why did you resign?

A: The cut in pay -- I wouldn't be able to make my ends meet with the proposed

salary. And I felt that the position was inappropriate, you know, for the education

that I had; the Clerk of Works position.

. . .

Q: Was [Mr. Lopez] a good candidate [for Executive Director]?

A: I believe he was one of the top candidates.

. . .

Q: Did she tell you what subordinates or fellow workers you were not working well

with?

A: No, she didn't.

In essence, Mr. Lopez attempts to present testimony regarding his reputation and market potential as

evidence that he suffered mental anguish without offering any testimony as to whether he even felt any

emotion. No other portion of the testimony even arguably relates to mental anguish.

In both Hart and Kneuper the plaintiffs put forward some showing of mental anguish in

order to recover damages. One testified that he felt "angered and embarrassed," that the termination

caused marital problems and that he suffered from lack of sleep. Hart , 892 S.W.2d at 926-27 . In

Kneuper , the plaintiff stated that he felt "total panic" and "great fear," while his wife stated that he was

nervous and irritable and short with the children. Kneuper , 768 S.W.2d at 460 . Here, there is no such

testimony. Because Mr. Lopez did not offer any testimony relating to his emotional state or its

consequences, we find there was neither legally nor factually sufficient evidence to support the jury's award

of damages for past mental anguish. We sustain point of error four.

Malice

In point of error five the Housing Authority claims the trial court erred because the evidence

was legally and factually insufficient to support the finding of malice necessary to award exemplary

damages. See Kneuper , 768 S.W.2d. at 457 . The jury charge asked whether the Housing Authority

acted "willfully and maliciously" in its conduct and included the following definition:

'Willfully and Maliciously' means an intentional doing of a wrongful act without just

cause or excuse; that is, if a wrongful act is done intentionally without just cause or excuse

for believing it to be right or legal, or done with conscious disregard to the rights of others,

then such an act is willfully or maliciously done. Willfulness and intent may be inferred by

the actions and conduct of the wrongdoer.

The Housing Authority claims the jury instruction was incorrect in that it failed to ask the jury to find a

"specific intent by defendant to cause substantial injury." (2) The supreme court recently discussed the level

of proof required to support an award of punitive damages in a suit under the Texas Anti-Retaliation law.

See Continental Coffee Prods. v. Cazarez , 937 S.W.2d 444 (Tex. 1996). The court held that actual

malice, as evidenced by ill-will, spite, or specific intent to cause injury, was required before punitive

damages could be assessed against an employer for violating the statute. Id. at 454 . Although the Housing

Authority proposes that we review the evidence under a Cazarez definition of malice, this case was tried

and the verdict handed down before Cazarez was issued. Furthermore, the agency neither objected to

nor requested a different instruction regarding malice when the trial judge specifically asked for objections.

See Tex. R. Civ. P. 272. Consequently, it failed to preserve any complaint regarding the jury charge. See

Tex. R. App. P. 33.1 (former Rule 52(a)). On appeal, parties are restricted to the theory on which the

case was tried. See City of San Antonio v. Heim , 932 S.W.2d 287, 291 (Tex. App.--Austin 1996, writ

denied) (citing Davis v. Campbell , 572 S.W.2d 660, 662 (Tex. 1978)). We will therefore summarize and

review the sufficiency of the evidence under the definition of malice submitted to the jury. See id.

The bulk of evidence showing malice involves the Director's December 12 evaluation of

Mr. Lopez. She completed an extensive questionnaire regarding his productivity, quality of work,

punctuality, degree of supervision required, response to supervision, attempts to improve, ability to work

with others, interest in work, persistence, flexibility, ability to express self verbally and in writing, response

to crisis, and overall job performance. Ms. Farias found Mr. Lopez's performance "below expectations"

or "unsatisfactory" in most of the categories; she also commented that he needed to follow her and the

Board's directives and policies, and to learn to work with supervisors, subordinates, and fellow workers.

We first note that Ms. Farias made this evaluation only one month after she took the position of Executive

Director. During that month, Ms. Farias and Mr. Lopez had worked together only eleven days. Mr.

Lopez testified that before the evaluation, there had been no mention of dissatisfaction with his job

performance; on occasion the Director told him that he was doing a good job. Second, on December 12,

Ms. Farias listed his failure to purchase computer software as one of two reasons for the poor evaluation,

although she had given him until the end of December to complete that job. When he reminded her of this

time table, she refused to reconsider the poor evaluation. Third, although Ms. Farias placed Mr. Lopez

on probation for six months, she did not outline a plan of what he needed to do to improve his performance.

She did not list any of the policies he had failed to follow or name any of the coworkers who found him

uncooperative. This poor evaluation was then relied on to demote Mr. Lopez.

Additionally, the Director demanded in a memo that Mr. Lopez train employees on

computer software within seventy-two hours. She then issued conflicting orders, telling him the training

could be done later. Nonetheless, Mr. Lopez's demotion was, in large part, based on his failure to train

the employees within the time period requested. From mid-December to the first week of January, several

events occurred which also evince that the Housing Authority acted with malice. It claimed Mr. Lopez was

demoted because of his failure to purchase computer software and to train employees. Ms. Farias sent him

several memos addressing these failures on the days when he was out of the office on approved leave due

to a death in his family and personal illness. Insensitive to Mr. Lopez's personal difficulties, the Housing

Authority faulted him for not responding immediately to the memos even though he was out of the office

during most of that time period. The agency also claimed that rent checks and cash were found in Mr.

Lopez's file cabinet rather than on deposit in the bank or safety vault. Mr. Lopez had a reasonable excuse

for not getting to the bank and, in fact, he was prevented from leaving the checks and cash in the office vault

because Ms. Farias had changed the combination without telling Mr. Lopez, despite his financial duties.

The trial court instructed the jury to find malice if a wrongful act was done "intentionally

without just cause or excuse of believing it to be right or legal, or done with conscious disregard to the rights

of others." Under this definition we believe the jury could have found malice. The jury's finding must be

upheld unless it is so against the great weight and preponderance of the evidence as to be manifestly unjust

or erroneous. See Pool , 715 S.W.2d at 635. In light of the whole record we conclude the evidence is

both legally and factually sufficient to support the jury's finding of malice.

Exemplary Damages

In its sixth point of error the Housing Authority claims the trial court erred in rendering an

award of exemplary damages in the amount of $100,000 because it was excessive and there was legally

and factually insufficient evidence to support the award. An appellate court reviews an exemplary damages

award to ensure that it is reasonable in its amount and rational in light of its purpose to punish malicious

conduct and deter repetition. See Heim , 932 S.W.2d at 294 . We may reverse an exemplary damages

award or suggest a remittitur only if we determine that the evidence supporting the award is so factually

insufficient or the verdict is against the great weight and preponderance of the evidence as to be manifestly

unjust. See id. (citing Moriel , 879 S.W.2d at 30). In reviewing the award, we consider the following

factors: (1) the nature of the wrong; (2) the character of the conduct involved; (3) the degree of culpability

of the wrongdoer; (4) the situation and sensibilities of the parties concerned; and (5) the extent to which

such conduct offends a public sense of justice and propriety. See Heim , 932 S.W.2d at 294 (citing

Alamo Nat'l Bank v. Kraus , 616 S.W.2d 908, 910 (Tex. 1981)). To determine whether the award is

excessive, we must detail the relevant evidence and explain why, in light of the Kraus factors, the evidence

either supports or does not support the exemplary damages awarded. See Heim , 932 S.W.2d at 294

(citing Ellis County State Bank v. Keever , 888 S.W.2d 790, 798 (Tex. 1994)).

We assess the nature of the wrong in light of the purposes underlying the Whistleblower

Act: (1) to protect public employees from retaliation by their employers for reporting violations of law in

good faith, and (2) to secure in consequence lawful conduct on the part of those who direct and conduct

the affairs of public bodies. See Travis County v. Colunga, 753 S.W.2d 716, 718 (Tex. App.--Austin

1988, writ denied). Although Mr. Lopez was not reporting a violation of a health or safety code, he was

in good faith reporting a violation by a public agency of its governing regulations. The short period between

his report and his demotion suggests a retaliatory animus. The Director's conduct, her friendship with the

Chairperson, and the surrounding evidence indicate Ms. Farias harassed Mr. Lopez in a personal manner

by making it difficult, almost impossible, for him to do his job well. The Housing Authority cannot avoid

responsibility for the caustic behavior of its Director.

In this employment context, the relative situations of the Housing Authority and Mr. Lopez

were unequal. While Mr. Lopez could and did point out possible violations, he could not force Ms. Farias

or the Board to follow the regulations. Only the Director and the Board were in the position to ensure that

regulations were followed or to retaliate against employees who prodded them to comply with regulations

and then reported seeming violations. Although Mr. Lopez was not obligated to report violations or to

persist in informing HUD and the Housing Authority that regulations were being broken, he did so,

regardless of the obvious consequences. The Housing Authority apparently assumed that by demoting Mr.

Lopez his persistence would disappear, his reports would stop, or perhaps, he would just quit. Such

actions should not be condoned. The Housing Authority is a public agency whose business is to administer

affordable housing to families in Crystal City. The Whistleblower Act was designed to protect employees

who urge public agencies to conduct their affairs honestly and correct their mistakes. The Act provides

for exemplary damages when such an employee is harassed or treated in a punitive manner. We cannot

say that the jury acted unreasonably by awarding exemplary damages in the amount of $100,000. Because

the evidence is both legally and factually sufficient to support the award, we overrule point six.

Prejudgment Interest

In point of error seven, the Housing Authority claims the trial court erred in awarding

prejudgment interest on exemplary damages because Mr. Lopez is not entitled to such interest under Texas

law. See Tex. Civ. Prac. & Rem. Code Ann. § 41.007 (West Supp. 1997). Mr. Lopez concedes he is

not entitled to prejudgment interest on exemplary damages. We sustain point of error seven.

CONCLUSION

Finding no evidence to support the jury's award for future lost earning capacity or mental

anguish, we reverse the trial court and render judgment that Mr. Lopez take nothing on those claims. We

modify the trial court's judgment to reduce the award for past lost earnings from $28,549.57 to $8801.89

because we find no basis for $19,747.68 of the award for lost benefits. We reverse the trial court's award

of prejudgment interest and remand that portion of the cause for recalculation consistent with this opinion.

In all other respects, the judgment of the trial court is affirmed.

__________________________________________

Bea Ann Smith, Justice

Before Justices Powers, Aboussie and B. A. Smith

Reversed and Rendered in Part; Reversed and Remanded in Part; Modified and, as Modified,

Affirmed in Part

Filed: October 23, 1997

Publish

1. Because the 1995 amendments govern conduct occurring after June 15, 1995, the 1993 version

of the Whistleblower Act applies in this case. See Act of May 4, 1993, 73d Leg., R.S., ch. 268, § 1, 1993

Tex. Gen. Laws 583 , 609-11. (Tex. Gov't Code Ann §554.001-.009 (West 1994), since amended)

("Former Act").

2. The Housing Authority also claims the instruction failed to require a finding that "the act or

omission viewed objectively involved an extreme degree of risk of which [d]efendant had actual subjective

awareness of the risk involved." This definition has been used only in personal injury cases in which

exemplary damages are awarded for gross negligence. See, e.g., Transportation Ins. Co. v. Moriel , 879

S.W.2d 10, 23 (Tex. 1994). We find that definition inapposite in the present case.

endship with the

Chairperson, and the surrounding evidence indicate Ms. Farias harassed Mr. Lopez in a personal manner

by making it difficult, almost impossible, for him to do his job well. The Housing Authority cannot avoid

responsibility for the caustic behavior of its Director.

In this employment context, the relative situations of the Housing Authority and Mr. Lopez

were unequal. While Mr. Lopez could and did point out possible violations, he could not force Ms. Farias

or the Board to follow the regulations. Only the Director and the Board were in the position to ensure that

regulations were followed or to retaliate against employees who prodded them to comply with regulations

and then reported seeming violations. Although Mr. Lopez was not obligated to report violations or to

persist in informing HUD and the Housing Authority that regulations were being broken, he did so,

regardless of the obvious consequences. The Housing Authority apparently assumed that by demoting Mr.

Lopez his persistence would disappear, his reports would stop, or perhaps, he would just quit. Such

actions should not be condoned. The Housing Authority is a public agency whose business is to administer

affordable housing to families in Crystal City. The Whistleblower Act was designed to protect employees

who urge public agencies to conduct their affairs honestly and correct their mistakes. The Act provides

for exemplary damages when such an employee is harassed or treated in a punitive manner. We cannot

say that the jury acted unreasonably by awarding exemplary damages in the amount of $100,000. Because

the evidence is both legally and factually sufficient to support the award, we overrule point six.

Prejudgment Interest

In point of error seven, the Housing Authority claims the trial court erred in awarding

prejudgment interest on exemplary damages because Mr. Lopez is not entitled to such interest under Texas

law. See Tex. Civ. Prac. & Rem. Code Ann. § 41.007 (West Supp. 1997). Mr. Lopez concedes he is

not entitled to prejudgment interest on exemplary damages. We sustain point of error seven.