This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1994).

STATE OF MINNESOTA

IN COURT OF APPEALS

C2-95-1090

C6-95-1335

Sharon Y. Bauer,

Appellant,

vs.

State of Minnesota, et al.,

Respondents.

Filed October 22, 1996

Affirmed in part and reversed in part

Peterson, Judge

Ramsey County District Court

File No. C8902060

Larry B. Leventhal, 420 Sexton Building, 529 South Seventh Street, Minneapolis, MN 55415 (for Appellant)

Hubert H. Humphrey, III, Attorney General, Steven M. Gunn, Assistant Attorney General, 1100 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101-2128 (for Respondents)

Considered and decided by Peterson, Presiding Judge, Randall, Judge, and Short, Judge.

U N P U B L I S H E D O P I N I O N

PETERSON, Judge

In these consolidated appeals appellant challenges the trial court's denial of her motion for a new trial or amended findings on her retaliatory wrongful discharge claim. Respondent Van Buren challenges the trial court's denial of his motion for a new trial, judgment notwithstanding the verdict, or remittitur on appellant's defamation claim. We affirm in part and reverse in part.

FACTS

Appellant Sharon Bauer began working as an Adult Basic Education Teacher for mentally retarded clients at the Faribault Regional Treatment Center (FRTC), a state facility, in 1979. Bauer received promotions and high ratings on her employee evaluations and, prior to 1989, was never disciplined. In 1989, she began to notice within her unit a decline in the quality of service, interaction with clients, and supervision. Bauer made many complaints to her supervisor, respondent Roger Van Buren, and to other higher-ranking employees at FRTC and within the Department of Human Services. Soon after she began making complaints, Bauer was suspended on three different occasions. Bauer filed grievances, and arbitrators found in her favor on all three occasions. In the fall of 1989, the State Licensing Division made unannounced visits to Bauer's unit and issued a finding of violations and a correction order consistent with Bauer's complaints.

In April 1990, Bauer was placed on medical leave for one year. When Bauer did not return to work at the end of her medical leave, her employment was terminated. Bauer filed suit against the State of Minnesota, Van Buren, and Van Buren's assistant, Jane Richert, alleging retaliatory wrongful discharge, defamation, and gender-based discrimination. During discovery, Bauer learned that Van Buren made statements about her to the effect that she acted seductively, was in love with him, was dishonest, and made "hang-up" phone calls.

The district court granted summary judgment dismissing all claims except the wrongful discharge and defamation claims. The defamation claim was tried before a jury. The jury found in favor of Richert, but against Van Buren, and awarded Bauer $120,000 in damages. The wrongful discharge claim was tried before the court with the same jury acting as an advisory jury. The advisory jury found that appellant's complaints about rule violations were "more than likely" the cause of her discharge, but that FRTC had a legitimate reason for terminating Bauer that was not pretextual. The trial court disagreed with the advisory jury and found that Bauer failed to prove that she was wrongfully discharged. The trial court found that Bauer resigned because her position, along with several other positions, was eliminated and she chose not to stay at her newly assigned position. The trial court found that Bauer's new position, which paid the same salary and was in the same bargaining unit as her previous position, did not create intolerable working conditions that forced Bauer to resign.

Bauer moved for a new trial and/or amended findings and conclusions on the wrongful discharge claim. Bauer also claimed that there had been witness misconduct and requested that the State of Minnesota be made jointly and severally liable on the defamation claim. Van Buren sought a new trial, or judgment notwithstanding the verdict, or remittitur on the defamation claim. The trial court denied all motions. This appeal followed.

D E C I S I O N

1. Bauer argues the trial court erred in denying her a new trial on her retaliatory discharge claim because (1) she was denied her right to a jury trial and (2) there was witness misconduct.

a. Right to jury trial.

Bauer contends she is entitled to a jury trial on her retaliatory discharge claim because it is a "case at law" within the meaning of Minn. Const. art. I, § 4. The construction of constitutional provisions is a question of law for the court and is subject to de novo review. See Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn. 1985) (statutory construction is a legal question subject to de novo review); State ex rel. Mathews v. Houndersheldt, 151 Minn. 167, 170, 186 N.W. 234, 236 (1922) (rules of statutory construction apply when construing a constitutional provision).

The trial court ruled

that any action under MSA 181.932 is not a common law action and that the legislature had abolished any common law action for whistleblowing and that [Bauer] was not entitled to a jury trial.

Shortly after the trial court ruled that Bauer was not entitled to a jury trial on her whistleblower claim, this court held in Williams v. St. Paul Ramsey Medical Ctr., 530 N.W.2d 852, 856-57 (Minn. App. 1995), rev'd on other grounds, 551 N.W.2d 483 (Minn. 1996), that Minnesota Constitution article I, section 4, guarantees the right to a jury trial to a plaintiff asserting a claim for money damages under Minn. Stat. § 181.932. This case differs from Williams, however, in that Bauer sought equitable relief in addition to money damages. See Williams, 530 N.W.2d at 857 (plaintiff sought money damages as relief for whistleblower claim). In Sonenstahl v. L.E.L.S., Inc., 372 N.W.2d 1, 3 (Minn. App. 1985), plaintiffs brought an action seeking money damages, an injunction, and other equitable relief. This court acknowledged that "'[i]f a plaintiff's claim is for the recovery of money, the Minnesota Constitution assures a right to a jury trial.'" Id. at 4 (quoting Olson v. Aretz, 346 N.W.2d 178, 181 (Minn. App. 1984), review denied (Minn. Oct. 30, 1984)). Nevertheless, this court held that plaintiffs were not entitled to a jury trial because the equitable relief they sought made their action primarily equitable. The court stated:

"There is a clear distinction between cases * * * where two causes of action, one legal and the other equitable, are united in the same action, and those where the cause of action is an equitable one, in which equitable relief is sought, and also legal relief as an incident to the equitable cause of action; for example, a claim for damages growing out of the facts upon which the equitable relief depends. The rule in cases of this kind is that in an action not of a strictly legal nature, where the plaintiff seeks both equitable and legal relief, neither party is entitled to a jury trial as a matter of right."

Id. (alteration in original) (quoting Koeper v. Town of Louisville, 109 Minn. 519, 521-22, 124 N.W. 218, 218 (1910)).

Appellant cites this quotation in Sonenstahl and argues that because her action is primarily legal, not primarily equitable, Sonenstahl does not apply, and she is entitled to a jury trial. We disagree. "[T]he nature and character of the controversy, determined from all the pleadings, determine the right to a jury trial," Landgraf v. Ellsworth, 267 Minn. 323, 326, 126 N.W.2d 766, 768 (1964). This does not mean that when a plaintiff seeks both legal and equitable relief, there is a right to a jury trial if the primary nature of the action is legal. It simply means that

"Care should be taken not to permit any mere label, which counsel in their pleadings attempt to put upon a lawsuit, to result in the denial of the constitutional right to jury trial, if the real nature of the action is such as to give a litigant that right."

Id. at 327, 126 N.W.2d at 768 (quoting Gilbertson v. Independent Sch. Dist. No. 1, 208 Minn. 51, 54, 293 N.W. 129, 130 (1940)). When the real nature of the action is that the plaintiff seeks both legal and equitable relief, neither party is entitled to a jury trial as a matter of right.

In Landgraf, the plaintiff brought an action on a contract to recover money. Id., 126 N.W.2d at 768-69. The supreme court held that the action was a legal action triable to a jury even though the final resolution of the case may require an accounting, an equitable remedy. Id. at 330, 126 N.W.2d at 770. The court said:

There is nothing difficult about the accounting that may become necessary once the fact issues are determined. The main fact issue on the merits will involve a determination of what the agreement between the parties was. That is true in many cases, and, once that issue is settled, the amount due plaintiff, if anything, will not involve such a complicated accounting that a jury could not handle it.

Id. at 329, 126 N.W.2d at 770.

The significant point in Landgraf is that the equitable remedy of an accounting was incidental to the resolution of the legal action to recover money damages. It was not a remedy provided independent from the legal remedy. This is not the case with the equitable relief Bauer sought. Bauer sought

injunctive relief, restraining [respondents], their agents, and/or employees from harassing or intimidating [Bauer], and ordering the removal of all adverse documentation from [Bauer's] personnel file, including any and all disciplinary actions.

This relief could be granted or denied whether or not Bauer recovered money damages. The equitable remedy was not incidental to the legal remedy.

Citing Rognrud v. Zubert, 282 Minn. 430, 165 N.W.2d 244 (1969), Bauer argues that even if she is not entitled to a jury trial on her claim for equitable relief, she is entitled to a jury trial on her claim for money damages. Rognrud does state that if equitable relief is requested along with legal relief, it is the usual practice to try the legal issues to the jury and the equitable issues to the court. Id. at 435 n.8, 165 N.W.2d at 248 n.8. But Rognrud cites Morton Brick & Tile Co. v. Sodergren, 130 Minn. 252, 153 N.W. 527 (1915), for this proposition, and Morton states that

in order to secure a jury trial of the issue properly triable by jury, demand must be made, not that all issues in the case be tried by a jury but that the specific issues proper for trial by jury be so tried. Plaintiff made no such demand. He demanded a jury trial of all issues.

Id. at 255, 153 N.W. at 528 (citations omitted). Our review of the record reveals that Bauer made only a general jury trial demand without specifying issues proper for jury trial.

We conclude that because Bauer sought both legal and equitable relief on her statutory whistleblower claim, she was not entitled to a jury trial. We, therefore, affirm the trial court's denial of a jury trial. See Schweich v. Ziegler, Inc., 463 N.W.2d 722, 728 (Minn. 1990) (appellate court will not reverse correct decision founded on incorrect reasons).

b. Witness misconduct.

Bauer also argues she is entitled to a new trial due to witness misconduct. The decision whether to grant a new trial lies within the trial court's discretion and will not be reversed absent an abuse of discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990).

Bauer argues that the trial testimony of defense witness Sheila Voegele, the personnel director at FRTC, constitutes misconduct. At trial, Voegele testified that Bauer applied, and was rejected, for only one employment position, rather than four. Bauer did not cross-examine on this point. Bauer contends that Voegele's trial testimony contradicts her deposition testimony. Voegele's deposition is not part of the record on appeal, however, and we cannot conclude that the trial court abused its discretion in denying a new trial based on witness misconduct. See Carpenter v. Woodvale, Inc., 400 N.W.2d 727, 729 (Minn. 1987) (even pro se appellant must provide an adequate record); Tupper v. Dirks, 292 Minn. 445, 446, 193 N.W.2d 800, 800-01 (1972) (waiving misconduct issue when not preserved below).

2. Bauer also argues that the trial court erred by entering judgment against Van Buren on the defamation claim without imposing joint and several liability upon Van Buren's employer, the State of Minnesota.

Minn. Stat. § 3.736, subd. 1 (1994), provides:

The state will pay compensation for injury to or loss of property or personal injury or death caused by an act or omission of an employee of the state while acting within the scope of office or employment * * *, under circumstances where the state, if a private person, would be liable to the claimant.

See also Ostendorf v. Kenyon, 347 N.W.2d 834, 837 (Minn. App. 1984) (the state "will pay compensation for claims if a private person would be liable for the same type of claim").

The supreme court has held that even though pleadings are general enough to possibly make out a claim on a particular theory, and even though language in the complaint would alert anyone to a claim based on the theory, the claim is made too late when it is not presented at trial and is made for the first time in a motion for a new trial. Antonson v. Ekvall, 289 Minn. 536, 539, 186 N.W.2d 187, 189 (1971). Bauer never raised the issue of respondeat superior until her posttrial motion for a new trial.

Moreover, the question of the state's liability was not presented on the special verdict form and no jury instruction regarding respondeat superior was requested. This court recently stated that when a party

does not challenge the form of the question submitted to the jury, [the party] should not now be allowed to complain and is bound by the theory upon which the case was tried.

Minnesota Mut. Fire & Casualty Co. v. Retrum, 456 N.W.2d 719, 723 (Minn. App. 1990). Bauer may not raise the issue of the state's joint and several liability for the first time on appeal.

3. Respondent Van Buren argues that because the jury's answers on the special verdict form regarding defamation and malice were contrary to the evidence and because the damages were excessive, the trial court erred when it denied his motion for a new trial, for judgment notwithstanding the verdict, or remittitur.

On review, answers to special verdict questions will not be set aside unless they are perverse and palpably contrary to the evidence or where the evidence is so clear to leave no room for differences among reasonable people. The evidence must be viewed in a light most favorable to the jury verdict. If the jury's special verdict finding can be reconciled on any theory, the verdict will not be disturbed.

Hanks v. Hubbard Broadcasting, Inc., 493 N.W.2d 302, 309 (Minn. App. 1992) (citations omitted), review denied (Minn. Feb. 12, 1993).

a. Defamation.

Van Buren argues the statements he made do not constitute defamation because they were not "published," they were not specific, and they are protected statements of opinion. We disagree. It is undisputed that in a memorandum to Dave Campbell, Van Buren wrote that Bauer is "[a]lmost seductive with me at times. With Samira and others, too."

The elements of a common law defamation action are: (1) a communication made to someone other than the plaintiff; (2) that is false; and (3) that tends to harm the plaintiff's reputation and lower her in the estimation of the community. Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). When determining whether language has a defamatory meaning, we give the language its "obvious and natural meaning". Phipps v. Clark Oil & Ref. Corp., 408 N.W.2d 569, 573 (Minn. 1987).

[O]nly statements regarding matters of public concern which are not sufficiently factual to be capable of being proven true or false, and statements which cannot be reasonably interpreted as stating actual facts, are absolutely protected by the First Amendment.

Hunt v. University of Minn., 465 N.W.2d 88, 94 (Minn. App. 1991).

Whether a remark can be reasonably interpreted as stating actual facts must be inferred from the political, literary, and social context in which the statement was made.

Id.

The statement that an employee is almost seductive, when made in a memorandum from one supervisor to another, is sufficiently precise and verifiable to be interpreted as stating actual facts. The context in which the statement was made suggests that the statement was intended to describe specific behavior.

Printed words which tend to injure the reputation of a person, expose him to contempt, degrade him in society, or lessen him in the esteem and confidence of his neighbors are, if untrue, libelous per se, even though they involve no imputation of crime. Words which prejudice or injure one in his office, trade, or profession are actionable per se. Words, which taken by themselves have an innocent meaning, in connection with surrounding circumstances, may convey a defamatory meaning to those familiar with such circumstances. If the published words, in effect, convey a defamatory meaning, it is immaterial what meaning the publisher intended to convey, or that he believed the words to be true. Whether a defamatory meaning is conveyed is dependent upon how ordinary men understand the language used in the light of surrounding circumstances. When the published words may be susceptible of either an innocent meaning or a defamatory one, dependent upon the occasion and circumstances, it is for the jury to determine which meaning was intended.

Gadach v. Benton County Co-op, Ass'n, 236 Minn. 507, 510, 53 N.W.2d 230, 232 (1952) (citations omitted).

Van Buren testified that when he used the word "seductive," he meant "manipulative." He also testified that "seductive" has a sexual meaning and that in using the word in regard to himself, he wondered about the sexual meaning. Even if Van Buren meant "manipulative" when he said "seductive," and even if "seductive" is susceptible of this meaning, it is also susceptible of a defamatory meaning. The jury determined that Van Buren defamed Bauer. The evidence, when viewed in the light most favorable to Bauer, supports the jury verdict.

Because we find that the jury verdict is supported by evidence regarding Van Buren's memorandum to Campbell, we need not address specifically the other alleged defamatory statements.

b. Malice.

Defamatory statements made in the context of an employment evaluation are conditionally privileged and not actionable unless made with actual malice. Bauer v. State, 511 N.W.2d 447, 449-50 (Minn. 1994).

The test for actual malice is whether the defamatory statement was made "from ill will and improper motives, or causelessly and wantonly for the purpose of injuring the plaintiff."

Id. at 450 (quoting Stuempges, 297 N.W.2d at 257). The law does not imply malice from a defamatory statement. Id. Whether a qualified privilege has been lost by acting with actual malice is a jury question. Frankson v. Design Space Int'l, 394 N.W.2d 140, 144 (Minn. 1986).

Van Buren argues the jury's verdict that his statements were made with malice is contrary to the evidence. We disagree. Bauer testified that Van Buren once confronted her about reporting rule violations to the chief executive officer of FRTC, and that after the violations were reported, Van Buren excluded her from some Unit Management Team meetings. Bauer also testified that Van Buren threatened her job saying, "You're not gonna be around here much longer." This evidence is sufficient to permit the jury to conclude that Van Buren's statement about Bauer was made from ill will.

c. Damages.

Van Buren argues the jury's award of $120,000 in damages was excessive, based on jury passion or bias, and unsupported by the record.

When a "defendant commits libel per se, general and punitive damages are recoverable without proof of actual damages." Becker v. Alloy Hardfacing & Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987).

In defamation actions general damages are imposed for the purpose of compensating the plaintiff for the harm that the publication has caused to his reputation.

Restatement (Second) of Torts § 621 cmt. a (1977). By special verdict, the jury awarded Bauer $40,000 for "Loss of reputation and standing in the community." It was not necessary for Bauer to prove actual damages to recover for loss of reputation.

The jury also awarded Bauer $40,000 for "Mental distress, humiliation, embarassment or physical disability," and $40,000 for "Economic loss caused by the defamatory statement."

One who is liable for either a slander actionable per se or a libel is also liable for any special harm legally caused by the defamatory publication.

Id. § 622. Special harm includes emotional distress that is proved to have been caused by the defamatory publication. Id. § 623.

Defamation is a legal cause of special harm to the person defamed if

(a) it is a substantial factor in bringing about the harm, and

(b) there is no rule of law relieving the publisher from liability because of the manner in which the publication has resulted in the harm.

Id. § 622A.

Unlike her damages for loss of reputation, which do not require proof of actual damages, Bauer's damages for mental distress and economic loss must be supported by proof of actual damages. The evidence presented at trial was not sufficient to prove that the defamatory statements caused any mental distress or economic loss.

The trial court found that

The jury had a factual basis for making a determination on damages. [Bauer] has not been able to work since she left the Faribault Regional Treatment Center. Doctor Roger C. Kollmorgen gave testimony that the jury certainly could have relied on in assessing monetary damages.

Our examination of the record has revealed no evidence presented at trial indicating that Bauer's mental distress or her inability to work were in any way caused by the defamatory statements. Dr. Kollmorgen did testify that Bauer suffered from depression and could not work. But he testified only that her symptoms were

proximately caused and precipitated by unfair treatment in the workplace, and aggravated by what she regards as sharp legal maneuvering and dissembling by the respondent's--respondent principals involved. That is, I said the stress of litigation and the frustration of not seeing her cause already vindicated in court had been cumulative and disheartening.

Dr. Kollmorgen's testimony does not refer to the defamatory statements, and there is no evidence that he even knew about the statements. His testimony refers only to the overall conditions Bauer faced at work.

With regard to the defamatory statements, the evidence indicates only that the statements were made. Bauer did not testify that the statements had any effect on her work environment. There was no evidence that the statements were repeated after they were made by Van Buren or that anyone to whom Van Buren made the statements did anything in response to the statements. In short, there is no evidence that anything occurred as a consequence of the statements being made. We conclude that Bauer failed to prove that any damages for mental distress or economic loss were caused by Van Buren's defamatory statements. We, therefore, set aside the jury award of damages for mental distress and economic loss and grant Van Buren judgment notwithstanding the verdict on these damages.

Affirmed in part and reversed in part.