Court of Appeals of Texas, Houston (14th Dist.).

Dann C. PUCKETT, Appellant,

v.

STAR DELIVERY SERVICE, INC., Appellee.

No. 14-96-01518-CV.

|

July 30, 1998.

Panel consists of MURPHY, C.J., and HUDSON and FOWLER, JJ.

OPINION

HUDSON, Justice.

*1 This is an appeal from a directed verdict granted in favor of Star Delivery Service, Inc. (“Star”). Appellant, Dann C. Puckett (“Puckett”), sued Star for breach of contract, fraudulent misrepresentation, deceptive trade practices and promissory estoppel. At the close of Puckett’s evidence, the trial court granted a directed verdict in favor of Star on each cause of action. In two points of error, Puckett contends the trial court erred in granting the directed verdict. We reverse and remand.

In late 1987 or early 1988, Puckett applied for a sales position with Star. Joe Dan Huffman (“Huffman”), one of the owners and President of Star, contacted Puckett. Huffman and Puckett met several times to discuss Star’s delivery service and Puckett’s prospective employment with the company. Puckett alleges that, during the course of these meetings, Huffman represented that Puckett would be covered by worker’s compensation insurance if he accepted employment with Star.

Puckett accepted a position as a sales manager and signed a non-competition agreement. Puckett was initially trained by Huffman. Puckett claims that, during his training, Huffman told potential customers that Star subscribed to worker’s compensation insurance. After his training was complete, Puckett said he also told potential customers that Star subscribed to worker’s compensation insurance. Puckett testified that Huffman was often present when he made this representation.

On January 11, 1990, Puckett claims he injured his back when he picked up his briefcase while in the course and scope of his employment.¹ Although he says he immediately felt intense pain, Puckett continued working and did not seek medical attention until January 31, 1990. Puckett told his doctor he was covered by worker’s compensation insurance through his employer. The doctor, however, was unable to obtain confirm coverage. Puckett claims this was when he first learned that Star was not a subscriber.

Puckett filed suit against Star in June 1991, seeking damages under several theories, including breach of employment contract, fraudulent misrepresentation, deceptive trade practices act, and promissory estoppel. After the close of Puckett’s evidence, the trial court granted a directed verdict in favor of Star. Puckett appeals this ruling with respect to his breach of contract and promissory estoppel claims.

Standard of Review

When reviewing the granting of a directed verdict, we must determine whether there is any evidence of probative force to raise a fact issue on the material questions presented. See Collora v. Navarro, 574 S.W.2d 65, 68 (Tex.1978). In so doing, we consider the evidence in the light most favorable to the party against whom the verdict was instructed, disregard all contrary evidence and inferences, and give the losing party the benefit of all reasonable inferences that may be logically derived from the evidence. See id. If there is conflicting evidence of probative value on any theory of recovery, a directed verdict is improper and the case must be reversed and remanded for a jury determination of that issue. See Szczepanik v. First Southern Trust Co., 883 S.W.2d 648, 649 (Tex.1994).

Breach of Contract

*2 In his first point of error, Puckett argues the trial court erred in granting a directed verdict on his breach of contract theory. Puckett contends he presented some evidence to prove each element of his contract claim and was entitled to have this issue decided by the jury. We agree.

The elements of a breach of contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) the plaintiff was damaged as a result of that breach. See Wright v. Christian & Smith, 950 S.W.2d 411, 412 (Tex.App.-Houston [1st Dist] 1997, no writ); Hussong v. Schwan’s Sales Enters., Inc., 896 S.W.2d 320, 326 (Tex.App.-Houston [1st Dist.] 1995, no writ). As to the first three elements, Puckett testified that Huffman told him he would be covered by worker’s compensation insurance. Puckett’s testimony and employment record demonstrate that he worked for Star for approximately two years. In fact, neither party disputes that Puckett was working for Star at the time of the alleged injury. Puckett further testified that Star did not provide worker’s compensation coverage, and his medical records indicate he was unable to obtain all necessary medical care because he did not have worker’s compensation coverage. Finally, Star does not dispute that it did not subscribe to worker’s compensation insurance.

Although Puckett’s testimony for each of these elements is self-serving and subject to impeachment that will raise an issue regarding its credibility, it remains some evidence of an alleged agreement to provide worker’s compensation coverage and the subsequent breach of that agreement. See Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex.1990) (reciting the general rule that testimony of an interested party raises a fact issue to be determined by a jury).

Star focuses on the fourth element and contends Puckett failed to show he was damaged as a result of the alleged breach. We agree with Star’s contention that Puckett’s damages are limited to what he would have recovered under the Worker’s Compensation Act if Star had been a subscriber. See General Resources Org., Inc. v. Deadman, 907 S.W.2d 22, 32 (Tex.App.-San Antonio 1995), writ denied, 932 S.W.2d 485 (Tex.1996) (stating that nonbreaching party to a contract is entitled to all of its actual damages necessary to put it in the same economic position it would be in had the contract not been breached). Star claims “Puckett presented no evidence about what medical treatment would be reasonable and necessary.”

At the time of Puckett’s alleged injury, the temporary income benefits provisions of the worker’s compensation scheme provided

(a) An employee who has disability and who has not attained maximum medical improvement is entitled to temporary income benefits. These benefits accrue beginning on the eighth day of disability and shall be paid weekly. On the initiation of compensation as provided under Section 5.21 of this Act, the insurance carrier shall pay temporary income benefits as provided by this section.

*3 (b) Temporary income benefits continue until the employee has reached maximum medical improvement.

(c) Except as provided in Subsection (d) of this section, temporary income benefits are payable at the rate of 70 percent of the difference between the employee’s average weekly wage and the employee’s weekly earnings after the injury, not to exceed the maximum weekly benefit under Section 4.11 of this Act or to be less than the minimum weekly benefit under Section 4.12 of this Act.

Acts 1989, 71 ^st Leg., 2d C.S., ch. 1, § 4.23(a-c). Here, Puckett presented evidence regarding his level of wage earnings while employed by Star and testified he had been unable to work since the alleged injury. Puckett also provided medical treatment bills and presented medical records classifying his level of injury as Class 5. A jury could have used this evidence to calculate temporary income benefits.

To recover medical expenses, a claimant must prove the charges incurred were “reasonable and necessary.” National Union Fire Ins. Co. v. Wyar, 821 S.W.2d 291, 297 (Tex.App.-Houston [1st Dist.] 1991, no writ). Puckett presented his medical bills at trial along with affidavits stating “such charges were reasonable at the time and place the services were rendered and such services were necessary for the treatment and/or diagnosis of Dann C. Puckett and his injury of 1/11/90.” Thus, some evidence was presented to show Puckett’s medical expenses were “reasonable and necessary.” See Wyar, 821 S.W.2d at 297.

Star also argues Puckett’s breach of contract claim must fail because Puckett “did not introduce any evidence of the notice required by the statute regarding Worker’s Compensation coverage.” The Texas Labor Code requires that all employers must “post a notice of whether the employer has workers’ compensation insurance coverage at conspicuous locations at the employer’s place of business.” Tex.Labor Code Ann. § 406.005(c) (Vernon 1996). Star contends Puckett either knew or should have known that he had no workers’ compensation coverage because there was no such notice at his place of employment. Because Puckett had actual knowledge that Star was not a subscriber to workers’ compensation insurance, Star contends that this was never an element of his contract of employment. Star claims Puckett should have known Star did not subscribe to worker’s compensation because (1) the certificates of insurance Star provided to prospective clients did not mention worker’s compensation, and (2) Star did not have the required notices of worker’s compensation coverage posted in the workplace.

We have a difficult time understanding how the lack of written or posted notice serves to give notice that Star was not a subscriber. To the extent that Puckett should have been put on notice to inquire further, Star may find this fact useful in impeaching Puckett’s assertion that workers’ compensation coverage was an element of his employment contract. Puckett, however, had no affirmative duty to raise, explain, or refute this inference when proving the elements of his breach of contract claim. Thus, while the record may suggest that Puckett’s credibility is subject to attack in many parts of his testimony, he is nevertheless entitled to have his claim determined by a jury. Because Puckett presented some evidence of probative force to raise a fact issue on his breach of contract claim, the trial court was obliged to let the jury determine the merits of his cause. Puckett’s first point of error is sustained.

Promissory Estoppel

*4 Puckett also argues the trial court erred in granting the directed verdict on his promissory estoppel theory because he presented some evidence as to each element of the claim. After reviewing the evidence presented at trial, we are again forced to conclude that the trial court erred.

To prevail on his promissory estoppel claim, Puckett had to show: (1) a promise, (2) foreseeability of reliance on the promise by the promisor, and (3) substantial detrimental reliance by the promisee. See English v. Fischer, 660 S.W.2d 521, 524 (Tex.1983); Collins v. Allied Pharmacy Management, Inc. 871 S.W.2d 929, 931 (Tex.App.-Houston [14th Dist.] 1994, no writ). As previously discussed, Puckett testified he inquired as to whether Star provided workers’ compensation coverage in his original meeting with Huffman. He claims Huffman said Star was a subscriber and that he would be covered by worker’s compensation. Moreover, Puckett testified that worker’s compensation was important to him because the customers in the courier industry require the courier’s to provide this insurance. Puckett’s said that he accepted and continued employment with Star because he thought he was covered by worker’s compensation insurance. In fact, he claims he rejected an employment offer from another company because he believed Star was a subscriber. Again, while much of Puckett’s claim is supported only by his own self-serving testimony, it constitutes sufficient evidence to create a fact issue on Puckett’s promissory estoppel claim. See Ragsdale, 801 S.W.2d at 882.

Star argues Puckett cannot rely on promissory estoppel because Puckett failed to exercise reasonable diligence to ascertain whether he was covered by worker’s compensation insurance. We recognize that “(a) party claiming an estoppel must have used due diligence to ascertain the truth of the matters upon which he relies in acting to his detriment.” Barfield v. Howard M. Smith Co., 426 S.W.2d 834, 838 (Tex.1968). Here, Star argues Puckett should have easily ascertained Star did not subscribe to worker’s compensation based on the absence of the required notices in the workplace and the omission of any reference to worker’s compensation in the certificates of insurance. However, an allegedly defrauded party such as Puckett is under no duty to make an investigation to discover the existence of fraud, unless and until he has acquired some knowledge of facts that would put a reasonably prudent person on inquiry. See Traylor v. Gray, 547 S.W.2d 644, 653 (Tex.Civ.App.-Corpus Christi 1977, writ ref’d n.r.e.). Where knowledge is unequal, reliance on the representations is reasonable, and the failure to make further inquiries is not negligence, estoppel is not defeated by the plaintiff’s failure to discover the truth. See id.

*5 At trial, Puckett testified that he inquired about the failure of the certificates of insurance to mention worker’s compensation insurance. Puckett claims he was told the worker’s compensation coverage came through another company office. Puckett’s testimony, if believed, is some evidence he made an inquiry and reasonably relied upon Star’s representations. Moreover, the circumstances which Star contends would negate reasonable reliance were not discoverable until after Puckett began working for Star. The alleged promise of worker’s compensation coverage was made before Puckett entered the workplace, and if Puckett is to be believed, all the elements of promissory estoppel were in place at the moment of his employment.

We find Puckett offered some evidence to show that at the time he allegedly relied on Star’s promise of workers’ compensation and accepted employment, he had no knowledge of facts that would put a reasonable and prudent person on inquiry. Thus, Puckett presented some evidence that he was under no duty to investigate whether he was covered by workers’ compensation. See Traylor, 547 S.W.2d at 653. While much of Puckett’s testimony was heavily impeached, the trial court erred in not permitting the jury to decide the issue. Puckett’s second point of error is sustained.

The trial court’s judgment is reversed and the cause is remanded for a new trial.

	Footnotes
1		In October 1988, Puckett injured his back and neck in a non-work related car accident. Puckett missed two weeks of work but was able to return to work and continued in Star’s employment until January 1990.