This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Yellow Freight Systems, Inc.,
Filed August 1, 2000
File No. C7987880
Andrew R. Clark, Amanda C. DuPont, Kalina, Wills, Gisvold & Clark, P.L.L.P., 941 Hillwind Road Northeast, Suite 200, Minneapolis, MN 55432; and
Paul Grossman, Paul, Hastings, Janofsky & Walker, LLP, 555 South Flower Street, 23rd Floor, Los Angeles, CA 90071-2371 (for appellant)
U N P U B L I S H E D O P I N I O N
Appellant Yellow Freight Systems, Inc. challenges the trial court's order granting judgment in favor of respondent David A. Jones on his sexual harassment claim, denying its motion for judgment notwithstanding the verdict (JNOV) on Jones's battery claim, and awarding a 50% enhancement to Jones's attorney fees based on contingency factors. Yellow Freight also claims that the trial court erred in not ordering a new trial on the grounds that (1) Jones surprised Yellow Freight at trial with graphic photographs that he should have produced during discovery; (2) the negligence claims should never have been submitted to the jury; (3) the court improperly excluded Yellow Freight's expert from testifying; (4) the jury did not state which part of the damages award pertained to the battery claim versus the negligence claims; (5) the damages granted were excessive; and (6) the compensatory damages awarded by the trial court were duplicative of the jury's award. We affirm in part and reverse in part.
Jones worked at Yellow Freight as a dock worker and truck driver for more than ten years. He is a member of the Teamsters union with significant seniority. In 1997, several incidents took place at Yellow Freight that gave rise to the claims on appeal.
In April 1997, Jones was walking in the dock area while returning from lunch when Ed Spotts, a dock supervisor/shift operations manager, grabbed his left buttock. As a reaction, Jones threw his drink over his shoulder, splashing Spotts. Jones did not report the incident immediately because he was afraid of retaliation, but approximately three days later, he reported it to Paul Trautwein, a general operations manager. While Jones claims Trautwein replied, "Spotts wouldn't do that," Trautwein testified that he told Jones that such conduct was not accepted and would have both of them meet and apologize to each other. Jones claims the meeting never took place. Trautwein did not report the incident "higher up" because he believed the situation had been handled.
Approximately one week later, Jones also reported the incident to Jeff Harvey, the terminal manager, who responded that "sexual harassment comes in many forms and many ways, and it will not be tolerated at Yellow Freight." He further told Jones he would address the issue with co-workers at an upcoming meeting, which according to Jones never took place. Harvey told Spotts that the conduct was inappropriate. Both Spotts and Jones agreed that prior to this incident they had a "good" relationship.
About one week after Jones spoke to Harvey, John Ryan, a general operations manager, grabbed and pinched Jones's buttocks, stating, "what a dead ass you have." Jones was very upset by the incident, and went to a trailer and cried. Shortly thereafter, graffiti appeared on the bathroom walls stating that Jones and Ryan were lovers and that Ryan was "doing him in the ass." There were also death threats against Jones. Jones never reported this incident to management and admitted that prior to this incident, Ryan had not done anything to offend him.
Jones also testified that while he was lying face down on a bench during his lunch break, taking a nap, Randy Nygaard, a co-worker, grabbed the back of his belt and simulated anal sex with him. Jones turned around and pushed him off. After this incident he was afraid to go to work. His physician referred him to a psychiatrist. Approximately one week later, Jones reported the incident to Steve Rhodus, a manager. In response to that report, Harvey met with Nygaard and told him that he was to have no further contacts with Jones. Jones testified that he never had any problems with Nygaard before this incident.
As these events were taking place, graffiti was written on the bathroom walls regarding, in part, Jones. Some graffiti was sexual in nature; some included death threats against Jones. Jones reported seeing graffiti saying, "Kill David Jones" or "David Jones will die," which he reported to Ryan. Ryan confirmed the presence of this graffiti and with a magic marker, scribbled over it.
A management representative testified that management seeks to prevent graffiti, but when it fails, it tries to remove it. Testimony at trial disclosed that Tom Cover, the terminal manager, has the bathroom inspected once or twice a week. When Jones reported to Cover that there was graffiti about him on the bathroom walls, a maintenance crew was sent to find the graffiti, and it was immediately painted over. Richard Snyder, Shift Operations Manager, scrubbed some graffiti off the walls himself.
Jones's psychiatrist, Dr. Mary Pennington, testified that since the incidents Jones has suffered from paranoia, anxiety, fearfulness, and depression since the batteries. Jones, who was having trouble sleeping and was experiencing nightmares, began therapy and medication treatment to address these symptoms. According to Dr. Pennington, Jones will have to continue therapy and medication for an undetermined period of time. Dr. Joel Peskay, a licensed psychologist, testified that Jones is suffering from adjustment reaction and mixed emotions of depression and anxiety.
The trial court submitted the issues of battery, negligent supervision, and negligent retention to the jury, which awarded $650,000 for past and future damages; the court tried the sexual harassment claim, finding for Jones. Because the trial court concluded that the negligence claims were preempted by the Minnesota Human Rights Act, it dismissed the negligence claims after the jury had entered its special verdict. The final award of damages was in the amount of almost $1.75 million:
· $190,000 – past mental anguish/suffering due to the batteries
· $460,000 – future mental anguish/suffering due to the batteries
· $630,000 – trebled compensatory damages for past mental anguish/suffering ($190,000) and humiliation and lost wages ($20,000) due to sexual harassment and hostile work environment [($190,000 + $20,000) x 3]
· $460,000 – future mental anguish/suffering and wage loss due to sexual harassment and hostile work environment
· $8,500 – punitive damages for disregarding the rights and safety of employees
The trial court also awarded attorney fees in the amount of $173,652.50 and then enhanced the amount by 50%, which resulted in an additional award of $86,826.25.
1. Yellow Freight challenges the trial court's judgment in favor of Jones on his sexual harassment claim.
The standard of review on appeal from judgment only is whether the evidence is sufficient to support the trial court's findings, and whether the findings support the trial court's conclusions of law.
Comstock & Davis, Inc. v. G.D.S. & Assoc., 481 N.W.2d 82, 84 (Minn. App. 1992). To succeed in a sexual harassment case Jones must show that (1) the conduct was unwelcome, (2) it consisted of sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature, (3) it was sufficiently pervasive so as to substantially interfere with the plaintiff's employment or to create a hostile, intimidating or offensive work environment, and (4) employer knew or should have known of the conduct and failed to take timely and appropriate action. Minn. Stat. § 363.01, subd. 41 (1998); Cummings v. Koehnen, 568 N.W.2d 418, 424 (Minn. 1997).
Yellow Freight claims there was insufficient evidence in the record to support each of the Cummings factors. We disagree. First, it is uncontested that the acts committed against Jones were unwelcome.
Second, the evidence in the record indicates that the acts to which Jones was subjected were sexual in nature. The testimony at trial reveals that Nygaard grabbed Jones by his belt while he was lying face down on a bench during his lunch break and simulated anal sex with him. This act is clearly sexual in nature. Jones was also grabbed on the buttocks on two separate occasions. While Yellow Freight claims that the two touches were not sexual in nature because they were not intended as such, Yellow Freight's own sexual harassment policy provides that "unwelcome physical contact such as patting, pinching, or brushing against someone" is physical conduct of a sexual nature that rises to the level of sexual harassment.
In addition, Jones was the subject of graffiti on the walls, which included statements such as Ryan was "doing him in the ass" and "Spotts and Jones are lovers." This graffiti is sexual in nature. Because the sexual act simulation, the touching of Jones's buttocks, and the graffiti was clearly sexual in nature, the second Cummings factor is satisfied. In addition, these acts, when considered together, rise to the level of sexual harassment proscribed under Minnesota law.
Third, the evidence in the record amply supports the trial court's finding that the events at Yellow Freight created a hostile employment environment. Yellow Freight disputes this finding, arguing that as a matter of law "three one-time touchings and co-worker graffiti * * * do not constitute the type of severe or pervasive conduct necessary to constitute sexual harassment." We disagree. Despite Yellow Freight's attempt to minimize the conduct, the "three one-time touchings" were all explicitly sexual conduct; in the case of the simulated act of anal sex, egregiously so. So, too, was the graffiti explicitly sexual; among other things, the graffiti alleged that Jones was the sex partner of two of the men who harassed him. Furthermore, Yellow Freight ignores the fact that Jones' co-workers exacerbated these incidents by ridiculing him about them.
Yellow Freight's characterization of the environment also ignores numerous other acts that were not directed at Jones but that contributed to the hostile employment environment because he was aware of them. See Hicks v. Gates Rubber Co., 833 F.2d 1406, 1416 (10th Cir. 1987) ("incidents involving employees other than the plaintiff are relevant in establishing a generally hostile work environment"); Vinson v. Taylor, 753 F.2d 141, 146 (D.C. Cir. 1985) ("[E]vidence tending to show Taylor's harassment of other women working alongside Vinson is directly relevant to the question whether he created an environment violative of Title VII."), aff'd in part and rev'd in part, 477 U.S. 57, 106 S. Ct. 2399 (1986). In addition to the sexual graffiti directed at Jones, there were other explicitly sexual graffiti in the rest rooms, as well as sexually explicit materials, including photographs of both male and female genitalia, posted on bulletin boards and left in employee common areas. In addition, other sexual acts toward employees were tolerated without discipline. For example, while Jones worked at Yellow Freight, at least one employee had his pants pulled down to reveal his genitalia, then was shrink-wrapped to a freight cart and pushed around for display to other employees. Jones was aware of this incident. And tellingly, shortly after Nygaard simulated an act of anal sex on Jones, and after Yellow Freight management told Jones it would speak to Nygaard about it, Jones witnessed Nygaard do the same thing to another employee.
On these facts, therefore, we agree with the district court that the events at Yellow Freight created "an intimidating, hostile, or offensive employment * * * environment." Minn. Stat. § 363.01, subd. 41(3). The third Cummings factor is therefore satisfied.
Finally, the record supports the trial court's conclusion that Yellow Freight knew or should have known of the harassment and failed to "take timely and appropriate action" to correct the conduct. Minn. Stat. § 363.01, subd. 41(3). The testimony at trial revealed that Jones complained to his supervisors about Spotts touching his buttocks, about Nygaard simulating anal sex with him while he was lying on the bench, and about the graffiti on the bathroom walls. Therefore, Yellow Freight knew or should have known about the sexual harassment.
Yellow Freight has a sexual harassment policy in place to deal with complaints about sexual harassment. The policy provides:
Managers and supervisors must report every complaint of sexual harassment to the Employee Relations or Human Resource Representative or Fair Employment Manager immediately. Human Resources will promptly and thoroughly investigate the complaint.
Yellow Freight had the obligation to correct the sexually harassing conduct, but even though Yellow Freight had procedures to address sexual harassment complaints, the procedures were not followed. While the record shows that Jones complained about the conduct, nothing in the record indicates that Jones's complaints of sexual harassment were reported to anyone other than his supervisor/manager. There is also no evidence in the record indicating that the complaints were thoroughly investigated. Instead, the evidence in the record indicates that Yellow Freight knew or should have known of the sexual harassment and did little to stop the conduct.
Yellow Freight contends, however, that they did in fact take "take timely and appropriate action" to correct the conduct. According to Yellow Freight, when they learned of these actions against Jones, they spoke to the employees involved and told them that such conduct was not appropriate. Because the two employees they spoke to took no further actions against Jones, Yellow Freight contends its actions were "timely and appropriate" as a matter of law, thereby preventing Yellow Freight from being held liable.
Again, we disagree. The employees who harassed Jones received less than a slap on the wrist; indeed, there is no indication in this record that the talking-to they received was even a stern one. Yellow Freight's response to the incidents may have prevented the perpetrators themselves from repeating their harassment against Jones, but it did not prevent the creation of a hostile employment environment in which others felt free to engage in similar harassment; in fact, Nygaard even repeated his harassing behavior against another employee.
Nothing in this record indicates that any of the employees who committed any of these acts was ever disciplined. "The failure of management to timely discipline employees is strong evidence of acquiescence in discriminatory practices * * *." McNabb v. Cub Foods, 352 N.W.2d 378, 384 (Minn. 1984). The prevalence of such acts uncorrected by any discipline by management created an atmosphere in which employees felt free to commit more such acts. As our supreme court has observed, "the absence of sanctions encourages abusive behavior." Continental Can Co. v. State, 297 N.W.2d 241, 247 (Minn. 1980) (quotation and citation omitted). Yellow Freight management took no action reasonably calculated to correct the hostile employment environment to which Jones was subject. Therefore, the final Cummings factor is satisfied.
Because the record in this case is replete with facts sufficient to support the trial court's conclusion that Jones was the victim of sexual harassment, we affirm the court's judgment in favor of Jones.
2. Yellow Freight claims the trial court, which awarded damages under both the sexual harassment and battery claims, erred in not granting its motion for JNOV. A judgment notwithstanding the verdict is proper when a jury verdict has no reasonable support in fact or is contrary to the law. Diesin v. Hessburg, 455 N.W.2d 446, 452 (Minn. 1990).
In reviewing the facts in a case where a motion for judgment notwithstanding the verdict has been denied, we must affirm if there is any competent evidence reasonably tending to sustain the verdict.
Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn. 1984) (citation omitted). We review the denial of a motion for JNOV de novo. Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998).
Yellow Freight claims the trial court erred in awarding Jones past and future emotional distress damages under both the battery and sexual harassment claims. We agree. In Wirig v. Kinney Shoes Corp., the Minnesota Supreme Court held:
Double recovery for the same harm is prohibited; therefore, where * * * damages are awarded for the same harm suffered as a result of sexual harassment and battery, the damage awards for battery are vacated.
461 N.W.2d 374, 375 (Minn. 1990). The party seeking recovery must show
clear and convincing proof, that the misconduct on which the * * * damages award in the battery action was based is different in kind from the misconduct for which the * * * damages was awarded for sexual harassment.
Id. at 379. Here, Jones's battery claim was based on two pinchings and the simulation of a sexual act. These same acts also gave rise to the sexual harassment claim. Jones failed to provide clear and convincing proof that the conduct was different in kind; therefore, recovery of damages under the battery claim would result in double recovery, which is expressly prohibited under Wirig. Because Wirig precludes recovery of damages under both a battery and sexual harassment claim where the same acts gave rise to each claim, the trial court's award of damages under the battery claim was contrary to the law. Accordingly, we reverse the trial court's denial of JNOV and reduce total damages by $650,000. Our decision on this point makes it unnecessary to address Yellow Freight's argument that Jones's battery claim is preempted by the Workers' Compensation Act.
3. Yellow Freight also contends that the trial court should have granted a new trial on the grounds that (1) the negligence claim should not have been submitted to the jury; (2) the jury did not state what part of the damages award pertained to the battery claim versus the negligence claims; and (3) the compensatory damages awarded by the trial court were duplicative of the jury's award. Because we conclude that Jones cannot recover under the battery claim, which was the basis for these arguments, we will not address them on appeal.
Remaining on appeal are Yellow Freight's arguments that it was entitled to a new trial because the trial court improperly admitted evidence that Jones withheld during discovery, excluded Yellow Freight's expert from testifying, and granted excessive damages. Because the district court has the discretion to grant a new trial, we will not disturb the decision absent a clear abuse of that discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). Where the trial court exercised no discretion but instead based its order on an error of law, however, a de novo standard of review applies. Id.
On appeal from a denial of a motion for a new trial, the verdict must stand unless it is manifestly and palpably contrary to the evidence, viewed in a light most favorable to the verdict.
ZumBerge v. Northern States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992).
Yellow Freight claims it is entitled to a new trial because the trial court admitted sexually graphic photographs and other materials Jones claimed to have found on bulletin boards and in employee common areas at Yellow Freight. Yellow Freight argues that these materials should have been excluded because Jones failed to turn them over in discovery, unfairly surprising Yellow Freight and depriving it of the opportunity to investigate their authenticity. But there is no dispute that Jones listed these materials on his trial exhibit list two weeks before trial and made them available at that time for Yellow Freight to review. Yellow Freight did not ask to review the materials before trial; had it done so, it could have investigated their authenticity then, brought a motion in limine to exclude them, or sought a postponement of the trial. On these facts we cannot say the trial court abused its discretion in admitting the materials or denying Yellow Freight a new trial on this ground.
Yellow Freight also claims that the trial court erred in excluding its expert, Dr. Patricia Aletky, from testifying at trial about Jones's emotional condition and its causes because she was not qualified.
The district court has considerable discretion in determining the sufficiency of foundation laid for expert opinion. Even if evidence has probative value, it is still within the district court's discretion to exclude the testimony. This is a very deferential standard. In fact, we have stated that even if this court would have reached a different conclusion as to the sufficiency of the foundation, the decision of the district court judge will not be reversed absent clear abuse of discretion.
Gross v. Victoria Station Farms, Inc., 578 N.W.2d 757, 760-61 (Minn. 1998) (citations and quotations omitted). Concluding that Dr. Aletky was not qualified as an expert in this particular case, the trial court excluded her testimony.
In an April 21, 1999 affidavit to the trial court, Dr. Aletky stated that "a valid psychological examination requires the free, unimpeded one-to-one exchange between the examiner and examinee." In spite of a court order explicitly requiring Yellow Freight to conduct a taped psychological medical examination of Jones, Dr. Aletky, who refuses to tape interviews with her clients, chose to administer three written tests instead. Dr. Aletky based her analysis of Jones on the results of these three tests, the review of his medical/psychological records, and a conversation with Jones of less than ten minutes. Not only did Dr. Aletky violate the trial court's order requiring a taped interview of Jones, but she also disqualified herself from making a valid psychological evaluation of Jones because she never had an "unimpeded one-on-one exchange" with Jones. While Yellow Freight claims Dr. Aletky's statement was made with regard to complete mental examinations, not when testifying in a "limited capacity," as she was here, the record shows that in her clinical assessment, Dr. Aletky concluded that Jones had low credibility, over-dramatized situations, and that his "present psychological state was caused by factors other than the matter at his current workplace." This assessment of Jones is far from limited. In light of this evidence, it is clear that the trial court did not abuse its discretion in excluding Dr. Aletky from testifying as an expert witness.
Yellow Freight also challenges the trial court's award of compensatory damages for past mental anguish and economic loss and future mental anguish. "The trial court has discretion to determine whether damages are excessive; we will not overturn its decision absent an abuse of discretion." Cox v. Crown CoCo, Inc., 544 N.W.2d 490, 498 (Minn. App. 1996). The trial court must consider all the evidence, the parties' demeanor, and the circumstances of the trial when determining whether the damages awarded were excessive. Id. A new trial is warranted where the damages are so excessive that the figure alone is evidence of passion or prejudice. Minn. R. Civ. P. 59.01(e). Yellow Freight claims the trial court's award of damages was excessive because there was insufficient evidence in the record to support the award, and therefore, the award was influenced by passion or prejudice. We disagree.
The trial court can award compensatory damages for mental anguish and economic loss. See Minn. Stat. § 363.071, subd. 2 (1998) (mental anguish); Minneapolis Police Dept. v. Minneapolis Comm'n on Civil Rights, 402 N.W.2d 125, 132 (Minn. 1987) (allowing compensatory damages for lost wages), aff'd on other grounds, 425 N.W.2d 235 (Minn. 1988). The trial court's award of $630,000 of trebled compensatory damages for past mental anguish/suffering and economic loss and $460,000 for future mental anguish/suffering under the sexual harassment claims was amply supported by the evidence. The evidence shows that Jones was an emotional wreck at work due to the incidents and that after the incident with Ryan, he went to a trailer and cried. Jones not only feared being hurt, but also felt his life was in jeopardy. He was having difficulty sleeping at night, and his physician referred him to Dr. Pennington, who diagnosed Jones with post-traumatic stress disorder with depression and anxiety and prescribed medications for Jones to deal with these conditions.
Dr. Peskay, who conducted a psychological assessment, opined that Jones suffered psychological damage due to the incidents at work. According to Dr. Peskay, Jones will suffer from paranoia and anxiety for quite some time, and will need three years of weekly therapy. Given such past and future injuries, the trial court's award for mental anguish and suffering cannot be said to be excessive.
The record also supported the trial court's award of $20,000 in past economic loss. Due to the sexual harassment at work, Jones turned down numerous opportunities to work overtime shifts, which before the harassment he had regularly accepted. His tax returns for 1997 and 1998 show that he lost approximately $20,000 in wages due to his fear of working overtime shifts.
Finally, the trial court may order compensatory damages up to three times the amount actually sustained. Minn. Stat. § 363.071, subd. 2 (1998). Because there was sufficient evidence in the record to support the trial court's conclusion that Jones experienced mental anguish and economic loss due to the sexual harassment, and in light of the trial court's authority to treble compensatory damages under the Minnesota Human Rights Act, the award of trebled compensatory damages was not excessive.
There is ample evidence in the record to support the damages awarded to Jones. The trial court therefore did not abuse its discretion. We affirm.
4. Yellow Freight challenges the trial court's award of enhanced attorney fees to Jones, claiming that to do so was an error of law. "On review, this court will not reverse a trial court's award or denial of attorney fees absent an abuse of discretion." Becker v. Alloy Hardfacing & Eng'g, 401 N.W.2d 655, 661 (Minn. 1987). Where the trial court exercised no discretion but instead based its order on an error of law, a de novo standard of review applies. Halla Nursery, 454 N.W.2d at 910.
The trial court concluded that based on "the difficulty of the case, the results obtained, the contingent nature of the results, and the quality of representation," enhanced attorney fees were appropriate. Accordingly, the trial court calculated Jones's attorney lodestar amount to be $173,652.50 and then enhanced the amount by 50%, which resulted in an additional award of $86,826.25. Yellow Freight claims that because Minnesota follows federal law with regard to attorney fees under the Minnesota Human Rights Act, and because federal law does not allow enhanced fees for the reasons the trial court relied upon, the trial court erred in awarding Jones enhanced attorney fees. We agree.
Several United States Supreme Court cases have rejected the award of enhanced attorney fees based on the very factors relied upon by the trial court in this case. In Pennsylvania v. Delaware Valley Citizens' Council, the U.S. Supreme Court stated:
[W]e specifically held in Blum[v. Stenson, 465 U.S. 886, 898-900, 104 S. Ct. 1541, 1548-50 (1984)] that the "novelty [and] complexity of the issues," "the special skill and experience of counsel," the "quality of representation," and the "results obtained" from the litigation are presumably fully reflected in the lodestar amount, and thus cannot serve as independent bases for increasing the basic fee award.
478 U.S. 546, 565, 106 S. Ct. 3088, 3098 (1986). Later, in City of Burlington v. Dague, the Supreme Court appeared to further broaden the prohibition and held that "enhancement for contingency is not permitted under the fee-shifting statutes at issue." 505 U.S. 557, 567, 112 S. Ct. 2638, 2643-44 (1992). This position is further supported by the Eighth Circuit Court of Appeals. See Newhouse v. McCormick & Co., 130 F.3rd 302, 304 (8th Cir. 1997) (applying Dague to ADEA case); Kientzy v. McDonnell Douglas Corp., 990 F.2d 1051, 1063 (8th Cir. 1993) (applying Dague to a sexual harassment case brought under Title VII and the Missouri Human Rights Act); Morris v. American Nat'l Can Corp., 988 F.2d 50, 51-53 (8th Cir. 1993) (applying Dague to Title VII case). Federal law clearly precludes the award of enhanced attorney fees. This court follows federal law when reviewing attorney fees under the Minnesota Human Rights Act. Anderson v. Hunter, Keith, Marshall, & Co., 417 N.W.2d 619, 628 (Minn. 1980). We reverse the enhancement of attorney fees.
Affirmed in part, reversed in part.