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Beneficial Personnel Services of Texas6/27/1996
This appeal stems from a judgment, following jury trial, favoring Ramon Rey against Beneficial Personnel Services of Texas, Inc. ("BPS") and Business Staffing, Inc. ("BSI"). The parties stipulated that BPS breached its contract with Rey and the amount of his damages from the breach. The jury found that BPS committed fraud and that BPS and BSI operated as a single business enterprise. It assessed $103,000 in actual damages and $550,000 as exemplary damages. The trial court rendered judgement against both BPS and BSI. Defendants appeal.
FACTS
Ramon Rey is an oil field worker in west Texas. Before 1991, he was employed by White Well Service as a well service floor hand. Mr. Rey is forty-three years old and a legal resident of the United States. He was born in Mexico where he attended school only through the second grade. He is married to Teresa Rey and they have three children.
In 1991, Beneficial Personnel Services of Texas, Inc., an employee leasing company headquartered in The Woodlands, approached White Well's owner. BPS/BSI proposed that White Well terminate all its employees, who would be immediately hired by BPS/BSI then leased back to White Well to perform exactly the same work. Johnny White, White Well Service's owner, agreed to this arrangement, and fired all his employees, including Rey. They were then hired by BPS/BSI and leased back to White Well. As part of its agreement with White Well, BPS/BSI provided administrative services for personnel, including payroll, a safety program, a "cafeteria plan," and most importantly, benefits for injuries compensable under the Texas Workers' Compensation Act, which were to be provided by an insurance carrier not admitted to the Texas Workers' Compensation system. That is, although BPS/BSI obligated itself to provide benefits, it would not be a subscriber to the Texas Workers' Compensation Act.
When his employment was changed from White Well to BPS/BSI, Ramon Rey signed an agreement which provided (in Spanish):
"3. WORKER 'S COMPENSATION BENEFITS. BPS of Tx/BSI has agreed in the PERSONNEL LEASE AGREEMENT with its Client Company to provide worker 's compensation benefits provided by a nonadmitted insurance carrier to EMPLOYEE for injuries compensable under the Texas Worker's Compensation Act and similar acts of other jurisdictions (collectively referred to as the `Act') while EMPLOYEE is assigned to CLIENT COMPANY and to waive (give up) their common law defensed against the EMPLOYEE as set forth in the corresponding Act. In exchange, the EMPLOYEE agrees to limit his/her recovery against BPS of Tx/BSI and CLIENT COMPANY for such compensable injuries to benefits allowed by the corresponding Act. These benefits are provided by a non-admitted insurance carrier."
Because our worker 's comp. Benefits are provided by a nonadmitted carrier the New `Act' requires that BPS of Tx/BSI provides you with the following statement:
"BPS of Tx/BSI DOES NOT have worker 's compensation insurance coverage to protect you from damages because of work-related illness or injury."
On May 12, 1992, while servicing an oil rig, Rey injured his back. Rey was first examined by Dr. D.W. Davison who took x-rays, prescribed medication, and started Rey on physical therapy. When Rey's condition did not improve, Dr. Davison referred Rey to Dr. Phillip Zeeck, an orthopedic surgeon. Dr. Zeeck first saw Rey on July 9, 1992. A Magnetic Resonance Imaging revealed that Rey had a herniated nucleus pulposus. Dr. Zeeck recommended a discography to be followed by a probable percutaneous disc excision. This surgery was initially scheduled for July, but was not performed when Dr. Zeeck was told that neithe
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