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finding that defendant's retaliatory conduct was not sufficiently egregious to support a punitive damages award
Summary of this case from Scull v. Wackenhut Corp.Opinion
DOCKET NO. A-4972-08T2
11-19-2012
DOROTHY PHILLIPS, Plaintiff-Appellant, v. MARRIOTT OWNERSHIP RESORTS, INC. d/b/a MARRIOTT VACATION CLUB INTERNATIONAL, Defendant-Respondent.
Arthur J. Murray argued the cause for appellant (Jacobs & Barbone, P.A., attorneys; Louis M. Barbone and Mr. Murray, on the briefs). Thomas E. Hastings argued the cause for respondent (Smith, Stratton, Wise, Heher & Brennan, LLP, attorneys; Mr. Hastings, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, Sapp-Peterson and
Ostrer.
On appeal from Superior Court of New Jersey,
Law Division, Atlantic County, Docket No. L
1355-06.
Arthur J. Murray argued the cause for
appellant (Jacobs & Barbone, P.A.,
attorneys; Louis M. Barbone and Mr. Murray,
on the briefs).
Thomas E. Hastings argued the cause for
respondent (Smith, Stratton, Wise, Heher &
Brennan, LLP, attorneys; Mr. Hastings, of
counsel and on the brief).
PER CURIAM
Plaintiff Dorothy Phillips sold vacation timeshares for defendant Marriott Ownership Resorts, Inc. (Marriott). She was a highly productive sales executive. She persuaded a jury that Marriott terminated her to retaliate against her for reporting her belief that a current co-worker engaged in illegal commission-splitting with a former Marriott employee. The jury awarded compensatory and punitive damages. However, the trial court granted defendant's post-trial motion to strike the punitive damages award. The court also denied plaintiff's motion for a clarification of her rights on reinstatement. Plaintiff appeals from these two trial court orders. We affirm.
I.
The record evidence reflects the following. In 2001, plaintiff started selling vacation timeshares for defendant at the Fairway Villas at Seaview (Seaview) in Galloway Township. She was very successful, and promoted to sales manager in February 2004. Other sales managers were James Patrick and Robin Barrick. After May 2004, plaintiff's supervisor was Stephanie Sobeck, a "project director," who reported to Robert DeRose, the regional sales and marketing vice president for the East Coast and the Caribbean. She received an award for her performance during the fourth quarter of 2004.
In late 2004, plaintiff concluded she was better suited in sales rather than management. Although she was interested in a position in Orlando, Florida, DeRose wanted her to stay at Seaview. In December 2004, plaintiff spoke to DeRose and Sobeck about her return to sales at Seaview. To induce her to stay, Phillips claimed that DeRose offered her all "orphan accounts," which were accounts for existing customers with no current servicing sales executive. DeRose denied making that offer, because one sales executive could not handle thousands of orphans.
Also in late 2004, while plaintiff was still in management, another highly productive Seaview sales executive, Martin Kamison, was terminated after repeated violations of internal directives. Plaintiff told other managers she was displeased she was not consulted, and concerned about losing such a successful sales executive. Plaintiff told Kamison upon his departure that she would periodically check his voicemail.
In late 2004, while plaintiff was a sales manager, she asked Jessica Britanak, a processor in the contracts department at Seaview, to generate a computer printout of Kamison's pending business for which he had written contracts but had not closed. Plaintiff intended to close pending business for the year. Britanak handwrote the names of Kamison's clients with pending business for plaintiff. According to an e-mail Britanak authored on February 28, 2005, plaintiff "immediately turned . . . [the list] over and put it under her [computer] keyboard," and asked Britanak to keep her request confidential. Plaintiff testified that she "didn't do anything" with the handwritten list because she "couldn't use it," and denied asking Britanak to keep her request confidential.
Plaintiff returned to her sales executive position effective January 15, 2005. Her direct supervisors were Barrick and Patrick, who reported to Sobeck, who in turn reported to DeRose.
According to Sobeck, January was a slow time of year for timeshare sales. She and DeRose suggested that "orphans" be assigned to plaintiff so her sales would not be adversely affected. Both Sobeck and DeRose testified that a sales executive had the option of asking his or her sales manager for twenty-five orphans and, after having contacted all twenty-five, the sales executive could request which orphans he or she wanted assigned. Sobeck further explained that if a sales executive had a prior relationship with an orphan, that orphan could be assigned provided the sales executive obtained permission from his or her sales manager. That policy was put into writing in 2005, and plaintiff acknowledged it on February 7, 2005.
Plaintiff moved into Kamison's old office on January 14, 2005. According to plaintiff, the office was full of Kamison's "plaques[,] . . . awards[,] and paperwork." Plaintiff's direct telephone extension when she was a sales manager was not transferred to the phone in her new office, and the phone in her new office retained Kamison's voicemail greeting, despite his having been terminated in October 2004. Plaintiff testified that Kamison's voicemail greeting was problematic because when she was not in her office, potential clients would attempt to leave her a message, hear a man's voice, think they dialed the wrong number, and hang up.
Soon after reassuming a sales executive position, plaintiff requested to have her direct extension transferred to her phone in her new office, and to have the office painted. Sobeck cancelled the painting order, telling her that since she was no longer a sales manager, she had no authority to put in such an order. Thereafter, plaintiff repeatedly asked for her extension to be transferred to the phone in her new office, to no avail. Sobeck testified that Kamison's voicemail should have been deactivated soon after his termination in October, but it was still active in January.
Defendant instituted a policy for changing phone extensions and voicemail greetings in March 2005.
Since her extension was not transferred to the phone in her new office, plaintiff decided to record a new voicemail greeting on Kamison's old extension sometime in early February 2005. She testified that she changed the message to, "if you're leaving a message for Marty Kamison, please do so and someone will call you back."
Patrick asserted that plaintiff told him that she changed Kamison's voicemail greeting to a "generic message." Patrick testified that meant the message would direct callers to a current employee such as a sales manager and advise that Kamison was no longer with the company. However, he admitted that in February 2005, he wrote an email acknowledging that plaintiff had placed a generic message, which he understood to be, "If you are calling for Marty, please leave a message and someone will get back to you." He trusted that plaintiff appropriately changed the voicemail greeting, and so did not discipline her at the time for changing the message.
Approximately two weeks into her job as a sales executive, plaintiff requested to be assigned to orphans. She was assigned approximately twenty-five orphans, including a number of Kamison's prior clients. Patrick understood that she had a previous relationship with those orphans, but plaintiff testified that she never told Patrick that she had prior contact with them. Patrick verbally approved the assignment of those orphans to plaintiff.
One of those orphans, Edward Rivas, had been one of Kamison's good clients, and was assigned to plaintiff on January 26, 2005. Sobeck testified that plaintiff had no prior relationship with Rivas, and so plaintiff should not have been assigned to him.
Kamison testified that he and plaintiff were friends. Plaintiff visited him at his new job on January 26, 2005. Plaintiff testified that Kamison told her he had contracts in his car for timeshare sales to one of his former clients at Seaview. Asked why he had those contracts since he no longer worked for Marriott, Kamison told plaintiff he had an agreement with Stacy Zimmerman, a Marriott portfolio sales executive in Orlando, Florida, to split the commission for sales Kamison closed with one of his former Marriott customers. Plaintiff said his arrangement was illegal, but Kamison disagreed. At trial, both Kamison and Zimmerman denied they had a commission-splitting agreement.
Plaintiff testified that after she left Kamison, she immediately reported Kamison's arrangement to Patrick, who became agitated. She said he responded, "[W]e can't let this happen," and assured her he would address the matter with Sobeck. Patrick also immediately assigned to plaintiff a list of orphan owners whom Kamison previously serviced. These orphan owners had bought so-called portfolio properties, that is, properties at sites other than Seaview. Between January 26 and February 13, plaintiff asked Patrick "several times" "what's going on with Zimmerman." In his testimony, Patrick denied speaking to plaintiff about Kamison and Zimmerman splitting commissions.
DeRose explained that when a customer wanted to purchase a time-share at a site other than Seaview, the sale would have to be processed by a so-called portfolio sales executive working out of the Orlando office. As noted, Zimmerman worked in Orlando.
On February 16, 2005, plaintiff reported the Kamison-Zimmerman commission-splitting agreement to Sobeck, who told her she would take care of it. Sobeck told DeRose about plaintiff's allegations. DeRose testified he conveyed the allegation to Zimmerman's supervisors in Florida, who were authorized to follow up. DeRose and Sobeck were not involved in the Florida investigation because they had no authority over Zimmerman. Zimmerman testified that his supervisors in Orlando questioned him once about alleged commission-splitting with Kamison, but there was no other followup. Zimmerman's supervisors did not substantiate plaintiff's allegations.
Plaintiff said she also reported her allegations to Daphne Thompson, a human resources manager. Thompson denied that plaintiff made a report to her, and stated she was not involved in the investigation in Florida. Plaintiff never put her commission-splitting charge in writing to the company.
Plaintiff first contacted Rivas on February 10, 2005, after retrieving a voicemail message he left for Kamison. Plaintiff testified she told Rivas she had been assigned his account, he would no longer be working with Kamison, and asked whether he knew that Kamison's wife was ill. Rivas did not recall plaintiff asking him about Kamison's wife. Plaintiff told Rivas that she would take care of an issue regarding a maintenance fee on one of his prior timeshare purchases and determine whether there were additional weeks in Aruba for purchase. After some confusion over which weeks were available, Rivas agreed to purchase additional weeks in Aruba.
At that point, according to plaintiff, Rivas was her client, presumably since Patrick had approved the assignment of his orphan account to her.
Plaintiff called Rivas in mid-February for a deposit but, according to her, Rivas did not have a credit card, so she drove to Rivas's home in Marlton to pick up a check. He gave plaintiff a check for $34,000, representing a ten percent deposit. Plaintiff testified that while at Rivas's house, she discussed his prior purchase of weeks in Hilton Head from Kamison, and Rivas said he thought Kamison had overvalued his purchase. She told Rivas that he could not overvalue a vacation with his family, to which Rivas asked, "[D]o you think Marty will be okay[?]" She responded yes. Rivas recalled the conversation differently. He testified he asked plaintiff whether Kamison would come out okay on the deal, apparently meaning whether Kamison would receive a commission on the sale, and plaintiff shrugged "yeah."
The next day, plaintiff's day off, plaintiff dropped off at work Rivas's Aruba deposit. Later that day, Kamison called plaintiff and told her he knew about her sale to Rivas and asked her to split the commission with him. Plaintiff said she responded, "you're crazy," and hung up. At trial, Kamison denied the discussion happened.
Plaintiff then called Sobeck because she was "scared" and wanted Sobeck to stop Kamison from calling her. Plaintiff claimed Sobeck told her that she needed to check with John Langan, the broker of record at Seaview, regarding whether the splitting of commissions was illegal. After Langan verified that such activity was illegal, per plaintiff's request, Sobeck sent her an e-mail dated February 17 stating that commission-splitting was illegal.
On February 17, Zimmerman contacted Rivas about new vacation timeshares available in St. Thomas. On February 21, plaintiff inadvertently discovered that Zimmerman had contacted Rivas about St. Thomas, and expressed to Sobeck and Patrick that she wanted to make sure that her deal with Rivas on the Aruba timeshares would not be cancelled. She also told Sobeck that she believed "Zimmerman [wa]s up to no good with Kamison . . . [because] they[] were trying to get . . . [Rivas] to buy St. Thomas." Sobeck told her to call Rivas to "keep him in this deal."
Plaintiff called Rivas from her office, with Patrick present. She told Rivas that Kamison no longer worked for defendant and she had no agreement with Kamison to split commissions. Plaintiff had not told Rivas that Kamison no longer worked for the company sooner because, according to her, she had not been asked that question and did not feel that disclosing that information was appropriate. Rivas asked plaintiff if Kamison had a commission-splitting agreement with Zimmerman, and she told him they did. She also said Kamison would receive no commission on the Aruba sale.
Patrick memorialized in an e-mail the portion of the conversation he heard in plaintiff's office.
On February 22, plaintiff stopped at work on her way out for a vacation and learned a poster about her had been hung around the office. The poster read: "THANK YOU MARTY FOR THE FREE VOLUME AND COMMISION! [sic] I'M NUMBER ONE [.] KEEP THOSE DEALS COMING[.] LOVE YA BABE! DOROTHY[.]" Plaintiff testified that she did not create the poster.
Sharon DeGiacomo, a sales executive, saw the poster, and called Kamison, a friend of hers, because she thought the poster was "peculiar." According to DeGiacomo, she read the poster to Kamison, he got "very upset," and asked her to fax him the poster. She did so, thinking that she was faxing the poster to his home. However, Kamison received it in Rivas's office. According to Kamison, he had stopped by Rivas's Cherry Hill office that day because he was upset that plaintiff was "reneging" on the deal she had with Kamison to split the commission on her Aruba timeshare sale. Kamison showed Rivas the poster, and Rivas wrote on the poster "[t]his is very unprofessional."
Rivas testified that, at some point while Kamison was in his office, Kamison copied a pre-drafted letter onto Rivas's letterhead, and asked him to sign it. Rivas said he signed the letter without reading it carefully. The letter cancelled plaintiff's Aruba timeshare sale to Rivas. It stated:
I was originally told by Dorothy Phillips that she had a business arrangement with my previous sales representative Marty Kamison and that he was out because his wife is very ill with cancer. Dorothy told me she was servicing his accounts and he would be compensated for this sale. I was later told that Mr. Kamison is no longer with MarriottBoth Rivas's cancellation letter and the poster with Rivas's handwritten note were faxed to Seaview.
and that there is no business arrangement between Dorothy and Marty. Additionally, I have also found out that the following notice is being hung in your offices, which I find totally unprofessional.
I am not comfortable doing business in this manner and I will only conduct future business with the previous sales representative working with Marty, Stacey Zimmerman. Stacey was the sales associate involved in my Hilton Head purchase in April, 2004.
Sobeck and DeRose were notified of the sale cancellation. However, DeRose, Sobeck, and plaintiff did not know that Kamison had drafted the letter.
Rivas's fax sparked an investigation into plaintiff's actions, which led to her termination. After receiving Rivas's fax, Sobeck and DeRose investigated Rivas's allegations. Corporate human resources in Orlando was also consulted about the Seaview investigation.
On February 24, 2005, Sobeck had DeGiacomo play plaintiff's voicemail message, which was, "This is Marty Kamison's office. Please leave a message and we'll call you back." In an e-mail dated March 1, 2005, Sobeck told DeRose that the message said that "it's Marty's office and all calls will be returned." Sobeck also asked Patrick if plaintiff had business relationships with the orphans before they were assigned to her, and Patrick told her plaintiff did. Sobeck also learned that plaintiff obtained a list of Kamison's clients from Britanak.
DeRose said his primary goal in the investigation was to salvage the Rivas sale. According to DeRose, Rivas reiterated to him the reasons he articulated in the letter for canceling his purchase. DeRose did not ask Rivas whether he personally wrote the letter so as not to further antagonize a good client.
Rivas testified he spoke to Sobeck and DeRose, each twice, and the "gist of the calls was . . . [to] preserve the sale." Rivas testified that they did not ask him about the contents of the cancellation letter. Ultimately, according to DeRose, Rivas bought the Aruba timeshares and no sales executive received a commission. On the other hand, Rivas testified that the deal never went through.
Kamison testified that he drafted another letter that Rivas signed, renewing the Aruba timeshare sale, on the condition Zimmerman serviced the account. The letter also credited Kamison's "urging and encouragement" for Rivas's decision, and stated "he is entitled to a generous finders fee." Kamison testified he hoped that with Rivas's intervention, defendant would pay him a finder's fee.
The investigation concluded with a February 28 meeting of Sobeck, DeRose, and plaintiff. Plaintiff admitted statements in the cancellation letter were true. She admitted she recorded the voicemail message for Kamison's old line without authorization, and she first contacted Rivas by returning his message left for Kamison. During the meeting, plaintiff reiterated her belief that Kamison and Zimmerman were splitting commissions. According to plaintiff, DeRose "went flipping crazy," but Sobeck testified that he remained calm. No formal report was generated from the investigation, but DeRose and Sobeck took notes during their meeting with plaintiff.
That evening, Sobeck and Patrick notified plaintiff she was suspended. On March 4, 2005, Sobeck and Barrick informed her that she was terminated effective that day. The termination notice stated that a "series of actions" involving misrepresentations allowed plaintiff "unfair access to the customers, therefore giving her an unfair advantage relative to the other sales executives." It stated plaintiff admitted the allegations in Rivas's cancellation letter, namely, that "she did not clearly state that Marty Kamison . . . was no longer with the company." In addition, plaintiff,
without authorization, . . . changed Marty's voicemail (after his departure) and placed her own voice on the message. She admitted to continuing to check the voicemails left
by customers, presumably for Marty, without the direction or authorization of management while she was a manager and after she returned to being a sales executive. . . . It was also learned through the course of the investigation that, as a manager, . . . [she] had asked the contract processing team to pull Marty's unclosed owners (names and phone numbers) and asked the contract processor to keep the request confidential. She continued to use the information gained from the list after she became a sales executive to obtain prospective customers.
After termination from defendant, plaintiff started a new job as a real estate sales associate in May 2005. The parties stipulated that her lost wages totaled $35,599.
II.
In March 2006, plaintiff filed a one-count complaint alleging a violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. She alleged her termination was in retaliation for her report that a co-worker had engaged in illegal activity, specifically, commission-splitting. After a fourteen-day trial, a jury returned a 7-1 verdict in March 2009 in plaintiff's favor on her CEPA claim. The jury awarded her $126,599 in compensatory damages (to which the court added $15,106 in pre-judgment interest), and $300,000 in punitive damages.
The court awarded plaintiff over $600,000 in attorney's fees. The court also imposed a $10,000 civil fine pursuant to N.J.S.A. 34:19-5. By order entered April 29, 2009, the court also directed Marriott to reinstate plaintiff to a senior sales executive position in Florida provided that she accept the position by May 31. The court selected Florida because Marriott ceased operations at the New Jersey location where plaintiff worked, and plaintiff expressed a preference for a Marriott location in Florida.
Judge Nugent treated defendant's motion to set aside the punitive damages award as a motion for a judgment notwithstanding the verdict (JNOV) pursuant to Rule 4:40-2, and as a motion under a provision of the Punitive Damages Act (PDA), N.J.S.A. 2A:15-5.14(a). The judge granted defendant's motion for JNOV with respect to the punitive damages award, and ruled that the award was not "reasonable" and "justified in the circumstances" of the case pursuant to N.J.S.A. 2A:15-5.14(a). The judge noted that there can be violation of CEPA without the additional proofs required to support an award of punitive damages.
After addressing both the JNOV and PDA applications, Judge Nugent summarized plaintiff's position on punitive damages as "an attack on the investigation of Marriott into the allegation against Ms. Phillips." The evidence showed that:
[Defendant] received a letter from Rivas accusing . . . [plaintiff] of making
misrepresentations, [which ultimately led to her termination]. And although there was evidence to refute that she had made many of those misrepresentations, there was also evidence that was virtually undisputed that she had at least in one or two instances misled . . . [Rivas] by omitting to disclose things.
But what is most significant in my view is that no one knew that the letter that Rivas sent did not come from Rivas. So in terms of the state of mind of whoever conducted that investigation . . . at least the jury could have concluded, readily that there was this basic sense of unfairness in terminating Ms. Phillips, that all is true whether Sobeck and . . . [DeRose] should have, from what was before them, made conclusions that were different from the ones they made. . . .
That characterization is different from, and that characterization inherently is an argument that there's all this evidence that if you just took the time to put it together, it should have occurred to you that what Ms. Phillips was telling you was true and maybe it would have led to the disclosure that Kamison was the one behind all this in writing these letters. They didn't know that. Ms. Phillips didn't even know it before she was fired. And that to me is very critical.
The fact that they might have jumped to conclusions, the fact that they might have overlooked or ignored what in retrospect — . . . after two and a half years of discovery and holding up to the discovery process microscope that we do in litigation, every little nuance and action that they took and did not take in the case — . . . might lead one to the conclusion that some things should have been evident and if they had just done a few other things, they might
have learned that this was Kamison's doing and that Kamison had orchestrated all of this.
The judge found that upper management's failure to discover that Kamison drafted the cancellation letter and "orchestrated all of this" was not "evidence of either malice . . . or willful and wanton misconduct."
Distinguishing between the finding of liability and the compensatory damage award on one hand, and the punitive damage award on the other, the judge found that plaintiff did not surmount the higher clear-and-convincing standard of proof that governed the punitive damage claim. Judge Nugent concluded that while plaintiff may have succeeded in proving she was a victim of retaliation, she had failed to prove "that Marriott retaliated against Ms. Phillips for protected activity . . . with an evil mind, with malice[.]"
The judge also distinguished Marriott's behavior from that of the defendant's in Baker v. National State Bank, 353 N.J. Super. 145 (App. Div. 2002), where punitive damages were found appropriate, noting that Baker involved "conscious pre-retaliatory . . . deception" and "the intentional concoction of a reason" to terminate plaintiff. By contrast, he noted Marriott managers in New Jersey did not retaliate when plaintiff first alleged illegal activity; rather they prompted an investigation in Florida regarding Kamison and Zimmerman. "[N]ot only did Marriott not do anything that was adverse to her, they actually did everything she asked for." The judge noted Marriott supplied her with a requested letter definitively stating that commission sharing was inappropriate.
Applying the PDA standard, Judge Nugent was unpersuaded that "the punitive damages were reasonable [in] amount and justified in the circumstances." He then concluded, applying the standard governing JNOV, see, e.g., Estate of Roach v. TRW, Inc., 164 N.J. 598, 612 (2000) (stating that motion must denied if reasonable minds could differ after according motion's opponent "the benefit of all inferences which can reasonably and legitimately be deduced" from the evidence) (internal quotation and citations omitted): "I don't believe that all of this evidence, even interpreting it in the light most favorable to Ms. Phillips, could clearly and convincingly result in a punitive damage award."
Prior to entering final judgment, the judge explained that it intended to order plaintiff's reinstatement to a position in Florida because the Seaview location where she had worked closed in February 2009. Per the court's final judgment, defendant provided plaintiff and the court with a letter dated April 13, 2009, detailing the terms and conditions of plaintiff's proposed reinstatement. That letter is not part of the record on appeal.
In April 2009, plaintiff sought clarification of the terms and conditions of the proposed reinstatement, but that request is not part of the record on appeal. Plaintiff states in her brief that she sought confirmation that she would not be required to work directly with Zimmerman, but defendant did not exclude the possibility. Plaintiff also claims she unsuccessfully sought advance notice of the rules governing her employment; defendant stated she would learn the conditions of her employment during training. Finally, plaintiff asserts she unsuccessfully sought severance and relocation costs.
On April 29, 2009, the court ordered reinstatement of plaintiff to a senior sales executive position in Florida provided that she communicate her decision either to accept or reject the position by May 31.
On June 1, a day after the court's deadline, plaintiff filed a motion for a declaration of her rights upon reinstatement which, according to her brief, sought costs of relocation and severance, a "clear exposition" on whether she would be working directly with Zimmerman, and an order directing defendant to provide her with the "normal and customary rules of the workplace." The judge denied plaintiff's motion for procedural and substantive reasons. Procedurally, the motion was untimely, "having been filed after the [May 31] deadline for accepting the position with the defendant and after the plaintiff appealed the 'final' order of the Court." Substantively, the judge explained that "plaintiff is not entitled to assurances that she will not have to work either with the employee whom she suspected of illegal activity, or with employees who testified at trial." Regarding plaintiff's claim for severance and relocation costs, the court stated the issue required an evidentiary hearing, but plaintiff had filed an appeal, and so the lower court had no jurisdiction to conduct such a hearing.
Plaintiff presents the following points for our consideration:
I.
THE TRIAL JUDGE MISTAKENLY SET ASIDE THE JURY['S] UNANIMOUS VERDICT AWARDING PHILLIPS $300,000 IN PUNITIVE DAMAGES AND COMPLETELY IGNORED THE EVIDENCE OF WILLFUL INDIFFERENCE DEMONSTRATED BY UPPER MANAGEMENT OF MARRIOTT[.]
II.
THE TRIAL JUDGE IMPROPERLY DENIED PHILLIPS ADDITIONAL INFORMATION SO AS TO ALLOW AN INFORMED DECISION ON WHETHER OR NOT TO ACCEPT AN OUT OF STATE POSITION AS THE EQUIVIL[A]NT OF THE POSITION FROM WHICH SHE WAS TERMINATED.
III.
A.
We first address the standard of review that applies to Judge Nugent's decision to set aside the punitive damages award. We consider first the standard of review governing the trial court's decision under the PDA provision, N.J.S.A. 2A:15-5.14(a), which requires a judge to determine whether a jury's punitive damage award is both "reasonable in its amount" and "justified in the circumstances of the case," and to reduce or eliminate the award to the extent it is not. We next consider the standard of review applicable to the court's decision to set aside the award pursuant to a JNOV under Rule 4:40-2(b), which requires the court to consider whether "the evidence, together with the legitimate inferences therefrom, could sustain a judgment in . . . favor of the party opposing the motion[.]" Verdicchio v. Ricca, 179 N.J. 1, 5 (2004)(quotation and citation omitted).
We note the order vacating the punitive damages award referred only to a JNOV. However, the court addressed both the PDA and JNOV in its opinion, and the court's opinion controls. Taylor v. Int'l Maytex Tank Terminal Corp., 355 N.J. Super. 482, 498 (App. Div. 2002) ("Where there is a conflict between a judge's written or oral opinion and a subsequent written order, the former controls.").
Plaintiff argues that we owe no special deference to the trial court's decision, and should apply a de novo standard of review. Regarding the court's application of its authority under N.J.S.A. 2A:15-5.14, we disagree. The standard of review depends on the basis of a trial court's decision regarding punitive damages.
A deferential standard of review applies to Judge Nugent's decision to set aside the punitive damage award pursuant to his power under N.J.S.A. 2A:15-5.14(a). We have held that a trial court's exercise of its authority under N.J.S.A. 2A:15-5.14(a) is reviewed for an abuse of discretion. Applying that standard of review in Saffos v. Avaya Inc., 419 N.J. Super. 244, 264 (App. Div. 2011), we affirmed a judge's decision to reduce, but not eliminate, a punitive damages award under N.J.S.A. 2A:15-5.14. In Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 390 N.J. Super. 557, 565 (App. Div. 2007), aff'd 194 N.J. 212 (2008), we applied the same abuse-of-discretion standard of review in affirming a trial court's decision not to reduce an award under N.J.S.A. 2A:15-5.14. Cf. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S., 424, 433, 121 S. Ct. 1678, 1683-84, 149 L. Ed. 2d 674, 684-85 (2001) (noting that in absence of a constitutional issue, federal appellate court applies abuse-of-discretion standard when reviewing a trial court's scrutiny of jury award of punitive damages).
We nonetheless remanded for a new trial on the amount of punitive damages because the court instructed the jury that it could consider general deterrence. Tarr, supra, 390 N.J. Super. at 568-69.
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This deferential standard of review of a trial judge's reduction or elimination of a punitive damage award is in keeping with the apparent purpose of this provision of the PDA, which empowers trial judges to independently assess the evidence and determine if an award is reasonable in amount, and justified under the circumstances. When the trial court is vested with what is essentially a fact-finding role, we generally defer to the court's findings.
In urging a more rigorous standard of review, plaintiff misplaces reliance on Baker, supra, and Rusak v. Ryan Automotive, L.L.C., 418 N.J. Super. 107 (App. Div. 2011). Applying the reasoning of Cooper, supra, 532 U.S. at 440, 121 S. Ct. at 1687-88, 149 L. Ed. 2d at 689-90, we held in Baker that an appellate court reviews de novo a trial court's determination that a punitive damages award violated a defendant's substantive due process rights. Baker, supra, 353 N.J. Super. at 152-53; see also BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S. Ct. 1589, 1598-99, 134 L. Ed. 2d 809, 826 (1996) (setting forth the factors for deciding substantive due process challenge). Based on considerations of institutional competence, we held an appellate court on balance was better suited than a trial court to apply the BMW factor pertaining to penalties imposed in comparable cases. Baker, supra, 353 N.J. Super. at 153. However, Judge Nugent did not set aside the punitive damages award on due process grounds. Cf. Baker v. Nat'l State Bank, 161 N.J. 220, 231 (1999) (distinguishing between review of a punitive damages award under PDA and under substantive due process standard of BMW v. Gore).
Nor does our recent decision in Rusak, supra, require us to apply a de novo standard of review. Rusak did not address the standard of review that governs a post-verdict review of a punitive damages award under the PDA, N.J.S.A. 2A:15-5.14.
We consider next the standard of review that applies to the trial court's grant of JNOV under Rule 4:40-2(b). In that instance, "an appellate court has the same task that a trial court does[.]" Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 415 (1997). In reviewing a motion for JNOV, we apply the same test that governs a motion for involuntary dismissal at the end of the plaintiff's case, Rule 4:37-2(b), and a motion for judgment at the close of all the evidence under Rule 4:40-1. Verdicchio, supra, 179 N.J. at 30; Dolson v. Anastasia, 55 N.J. 2, 5 (1969).
We must grant plaintiff, as the opposing party, all reasonable inferences that may be drawn from the evidence. Verdicchio, supra, 179 N.J. at 5 (quotation and citation omitted). We must deny the motion "if, accepting as true all the evidence which supports the position of the party defending against the motion and according him the benefit of all inferences which can reasonably and legitimately be deduced therefrom, reasonable minds could differ[.]" Ibid.; see also Estate of Roach, supra, 164 N.J. at 612 (appellate court may disturb a jury's verdict "only if we find that the jury could not have reasonably used the evidence to reach its verdict"). The test prevents appellate courts from "usurping the jury's task of assessing the credibility of the witnesses." Ibid. Thus, in reviewing Judge Nugent's entry of JNOV, we would need to apply the same standard he applied, and decide whether a jury, accepting as true all the evidence supporting plaintiff's position, could reasonably have reached its punitive damages verdict.
B.
Applying the abuse-of-discretion standard of review, we discern no error in the court's decision to vacate the punitive damage award under the PDA. The statute mandates judicial review of the punitive damage award: "Before entering judgment for an award of punitive damages, the trial judge shall ascertain that the award is reasonable in its amount and justified in the circumstances of the case[.]" N.J.S.A. 2A:15-5.14(a) (emphasis added).
The reasonableness determination is explicitly tied to the quantum of the award. The "justified in the circumstances" requirement directs the trial court to review the record evidence describing the "circumstances." In exercising its role, the court must consider the purpose of punitive damages to "punish the defendant and to deter that defendant from repeating" the conduct. N.J.S.A. 2A:15-5.14(a). The dual purpose of punishment and specific deterrence is captured in the PDA's definition of punitive damages. N.J.S.A. 2A:15-5.10.
While abuse of discretion "defies precise definition," Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002), an abuse of discretion occurs "when a decision is 'made without a rational explanation, inexplicably depart[s] from established policies, or rest[s] on an impermissible basis.'" Feigenbaum v. Guaracini, 402 N.J. Super. 7, 17 (App. Div. 2008) (citations omitted).
CEPA provides that a prevailing plaintiff may be awarded punitive damages. N.J.S.A. 34:19-5. If a jury determines punitive damages are appropriate, CEPA requires the fact-finder to consider "not only the amount of compensatory damages awarded to the employee" but also damages that the employer's wrongdoing inflicted on the employer's various constituencies or to the public. Ibid.
An employer is liable for punitive damages in a CEPA case only if the plaintiff establishes both especially egregious conduct, plus upper management's actual participation or willful indifference. Abbamont v. Piscataway Twp. Bd. of Educ, 138 N.J. 405, 419 (1994).
[A] stricter standard for imposing liability for punitive damages is appropriate in CEPA actions. Therefore, in CEPA actions, "the employer should be liable for punitive damages only in the event of actual participation by upper management or willful indifference." [Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587,] . . . 625 [(1993)] The Appellate Division expressed that stricter standard: "A greater threshold than mere negligence should be applied to measure employer liability for punitive damages; they are to be awarded when the wrongdoer's conduct is especially egregious but 'only in the event of actual participation by upper management or willful indifference.'" 269 N.J. Super. at 31 (quoting Lehmann, supra, 132 N.J. at 624-25).Cf. Mogull v. CB Commercial Real Estate Group, Inc., 162 N.J. 449, 473 (2000) (reaffirming and applying two prong test to LAD case); Cavuoti v. New Jersey Transit Corp., 161 N.J. 107, 113 (1999) (same).
[Ibid.]
"[T]he concept of egregiousness does not lend itself to neat or precise definitions." Quinlan v. Curtiss-Wright Corp., 204 N.J. 239, 274 (2010) (reviewing punitive damage claim for retaliation under Law Against Discrimination).
We have described the test for egregiousness as being satisfied if plaintiff has proven "an intentional wrongdoing in the sense of an 'evil-minded act' or an act accompanied by a wanton and willful disregard for the rights of [plaintiff]." Rendine [v. Pantzer], 141 N.J. [292,] at 314 [(1995)] (quoting Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 49-50 (1984)). In the alternative, we have found that the evidence will suffice if it demonstrates that defendant acted with "actual malice." Herman [v. Sunshine Chem. Specialties], supra, 133 N.J. . . . [329, 337, (1993)].
[O]ur jury instructions on punitive damages identify several considerations that bear on the question. See New Jersey Model Civil Instruction § 8.61 (Punitive Damages-LAD Claims). The evidence that the Model Charge instructs the jury to consider includes the likelihood that the conduct would cause serious harm, the actor's awareness or reckless disregard of the likelihood of such harm, the actor's behavior after he or she learned that the conduct would be likely to cause harm, the duration of the wrongful conduct and the acts, if any, undertaken to conceal the wrongful conduct.
[Ibid.]
The PDA requires a plaintiff to prove "by clear and convincing evidence the harm suffered was the result of the defendant's acts or omissions, [which] were actuated by actual malice or accompanied by a wanton and willful disregard of persons who foreseeably might be harmed by those acts or omissions." N . J . S . A . 2A:15-5.12(a). "Wanton and willful disregard means a deliberate . . . omission with knowledge of a high degree of probability of harm to another and reckless indifference to the consequences of such . . . omission." N.J.S.A. 2A:15-5.10. In reaching its decision, the fact-finder must consider the following factors, among others,
(1) The likelihood, at the relevant time, that serious harm would arise from the defendant's conduct;
(2) The defendant's awareness of reckless disregard of the likelihood that the serious harm at issue would arise from the defendant's conduct;
(3) The conduct of the defendant upon learning that its initial conduct would likely cause harm; and
(4) The duration of the conduct or any concealment of it by the defendant.
[N.J.S.A. 2A:15-5.12(b).]
The parties do not dispute that DeRose and Sobeck were upper management. Moreover, in exercising his review powers under the PDA, Judge Nugent did not question the jury's determination that Marriott retaliated against plaintiff. Plaintiff's retaliation claim was grounded in the premise that Marriott exaggerated her alleged violations of company policy in order to justify her termination and to preserve its relationship with Rivas.
However, we discern no abuse of discretion in the judge's determination that Marriott's conduct, although retaliatory, was not sufficiently egregious, and therefore, the award of punitive damages was not justified. Judge Nugent noted that upper management was unaware that Kamison had orchestrated Rivas's complaints. Until Rivas's letter, which prompted the investigation of plaintiff, Marriott did not respond negatively to plaintiff's allegations of commission-splitting. Rather, it provided plaintiff with confirmation it was illegal and sparked an investigation in Orlando, however ineffective, of Zimmerman's alleged agreement with Kamison.
We distinguish Marriott's conduct from that reviewed in Rusak, supra, which plaintiff cites. In that case, a new manager discriminated and retaliated against a valued and successful automobile saleswoman in violation of the LAD. We held the trial court erred in not permitting the punitive damage claim to go to the jury. Defendant's conduct included: "accus[ing] plaintiff of trying to bribe [her manager] into giving her boyfriend a job"; scolding her for alleged attendance and punctuality problems; escalating instances in which her manager "mutter[ed] vulgarities under his breath," and "call[ed] her a 'dumb . . . stupid blonde' all 'within ear shot' of other employees"; asking her upon her return from the bathroom whether she was menstruating; subjecting her to "graphic sexual stories"; removing her name from a list of salespersons eligible for annual awards; removing her telephone and computer after "accusing her of not 'want[ing] to wait on people'"; removing her name from the employer's internal website; showing her graphic pictures of female genitalia, asking her and another worker "'which one [was] [theirs],'" and leaving the images on plaintiff's desk; telling her to "'shut the f—k up,'"; and threatening to fire her.
By contrast, in deciding to terminate plaintiff, defendant's managers did not engage in outrageous efforts to defame or humiliate her. We find no abuse of discretion in Judge Nugent's determination, based on his consideration of the evidence and the relevant circumstances, that Marriott's conduct was not egregious. Therefore, we do not disturb his decision that punitive damages were not justified under the PDA.
We turn briefly to the court's alternative ground for vacating the punitive damage award under Rule 4:40-2. Applying a de novo standard of review, we are in accord with the trial court's determination. We rely on our review of the evidence. Even granting all reasonable inferences to plaintiff, we conclude a reasonable jury could not find, by clear and convincing evidence, that Marriott's behavior was malicious, or Marriott acted in wanton and willful disregard of plaintiff's rights, and Marriott's conduct was especially egregious. Consequently, judgment for defendant on plaintiff's punitive damages claim was warranted.
C.
Lastly, we consider plaintiff's appeal from the court's order denying her post-trial motion for a declaration of her rights on reinstatement. Reinstatement is an equitable remedy. We review the court's order for an abuse of discretion. See Todaro v. Cnty. of Union, 392 N.J. Super. 448, 456 (App. Div. 2007). We discern none here.
CEPA requires the court, "where appropriate and to the fullest extent possible," to reinstate an employee "to the same position held before the retaliatory action, or to an equivalent position." N.J.S.A. 34:19-5(b). The court ordered reinstatement to an equivalent position in Florida, where plaintiff had expressed a preference, as Marriott had closed its Seaview office. The court imposed a reasonable deadline for plaintiff to accept reinstatement.
Plaintiff's motion for assurance was untimely. The court ordered reinstatement by its April 29 order, provided plaintiff accepted the position by May 31. As she did not do so, she effectively declined the remedy. Moreover, plaintiff sought assurances to which she was not entitled. A reinstated employee is not entitled to guarantees that she will not work with persons involved in the wrong; rather the employee is entitled to be free from future wrongful activity. See Abbamont v. Piscataway Twp. Bd. of Educ., 314 N.J. Super. 293, 306-07 (App. Div. 1998) (lower court erred in denying employee's motion for reinstatement insofar as "it relied upon the 'very real probability of continued animosity' between the parties if plaintiff were reinstated to his former position"), aff'd, 163 N.J. 14 (1999).
I hereby certify that the foregoing
is a true copy of the original on
file in my office.
CLERK OF THE APPELLATE DIVISION