Haynes v. Golub Corp.

Haynes v. Golub Corp.  (95-444); 166 Vt. 228; 692 A.2d 377

[Filed 31-Jan-1997]


NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports. 
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press.


                                 No. 95-444


Marylu Haynes                                     Supreme Court

                                                  On Appeal from
     v.                                            Washington Superior Court

Golub Corporation, et al.                         April Term, 1996


David A. Jenkins, J.

Leighton C. Detora of Valsangiacomo, Detora & McQuesten, P.C., Barre, for
plaintiff-appellee

Robert H. Claridge, Schenectady, New York, and John J. Boylan, III of Boylan
& Bowen, Springfield, for defendants-appellants


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



DOOLEY, J.   Defendant Golub Corporation (FN1) appeals from a $175,000 jury
verdict finding that defendant had wrongfully discharged plaintiff, Marylu
Haynes.  Defendant raises four claims of error:  (1) there was insufficient
evidence to support the jury's finding that plaintiff was fired without
sufficient cause; (2) evidence regarding a promise to retransfer plaintiff to
her backdoor receiver position was erroneously admitted; (3) the jury
instructions on reducing damages for future wages to present value misled the
jury and require a new trial on damages; and (4) the trial court erred in
failing to grant a remittitur or, in the alternative, a new trial on damages
because the jury award was excessive.  We affirm in part and reverse in part.

Plaintiff was a long-time employee of a grocery store first owned by
Martin's, then by P & C, and finally by defendant, which operated it as Price
Chopper, Inc.  Defendant retained plaintiff as an employee and granted her
sixteen years of seniority for her years of employment with the former
owners.

 

Plaintiff began as a backdoor receiver, the same position she had with P & C. 
As a receiver, plaintiff kept the back room clean, took care of any damage,
and checked in inventory items that came into the store.  She continued to
work as a backdoor receiver until a new store manager decided to transfer her
to the deli department.  Plaintiff resisted the transfer, explaining to the
manager that she understood that the deli supervisor was a difficult person
to work under. Plaintiff finally agreed to the transfer on the condition that
if it did not work out, she would be able to return to her original receiver
position.  The manager agreed to the condition and put it in writing.

Another employee expressed surprise about the transfer to the manager because
everyone knew that plaintiff did not get along with the deli manager. 
Moreover, the deli department was busy and understaffed.  When the employee
asked the manager about the transfer, he replied with a muffled laugh, "We'll
see which one of them goes out the door first."

After some time in the deli department, plaintiff requested to be returned to
her receiver position.  The manager replied to the effect that if plaintiff
went back to her receiver position, she would end up being fired within two
weeks.  Somewhat intimidated by the manager's remarks, plaintiff remained at
her deli position.  Subsequently, she was disciplined on three occasions. 
The latter two incidents became the basis of her termination.

The first incident involved the use of abusive language.  Plaintiff was
written up for swearing at a co-worker.  The second alleged act of misconduct
occurred on December 4, 1991 when plaintiff was disciplined for acting rudely
towards a customer who requested a complimentary cup of coffee.  The store
manager recorded the violation, reporting in writing: "[c]ustomer asked
[plaintiff] for free cup of coffee and [plaintiff] ignored and was rude when
he asked her for the coffee -- customer felt he was intruding and was upset
after I personally told him that free coffee was available at deli."  For
this infraction, plaintiff received a three-day suspension and a warning that
in the event of further infractions, she would be terminated.

In January, the deli supervisor told another employee that the store
management was looking for a way to "get rid of" plaintiff.  The supervisor
complained that plaintiff's presence

 

in the deli department was requiring her to cut the hours of part-time
workers to pay plaintiff's salary as a long-tenured employee.  To a different
employee, the supervisor described plaintiff as the most highly paid deli
employee and part of the reason the deli was losing money.

On January 16, 1992, plaintiff was again disciplined for rude conduct toward
a patron. A customer complained that plaintiff had been rude and had thrown
cold cuts of meat at her. The store manager again documented this incident on
the appropriate form, but plaintiff refused to sign and verify the complaint. 
On the basis of this alleged violation of store policy, defendant terminated
plaintiff on January 23, 1992.

Plaintiff brought this wrongful discharge action in May 1992.  She claimed
that her at-will employment relationship was modified by defendant's policy
to terminate employees only for just cause.  She disputed that either of the
disciplinary incidents occurred as charged.  She alleged that she was set up
for failure by the transfer to the deli department because of the personal
animus of the manager and her status as a long-term employee with a
relatively large salary.

Plaintiff also claimed two violations of specific personnel policies in the
decision to discharge her.  First, plaintiff argued that defendant's employee
handbook required four misconduct citations to support termination, and only
three had occurred.  Second, she argued that the handbook provided extra
procedural protection for employees with five or more years of experience,
that the proposed termination would be "automatically . . . reviewed" by the
company president, and that that had not occurred.

The case was tried to a jury in November 1994.  Following the presentation of
evidence, the trial court held a jury charge conference.  Defendant agreed to
jury instructions on just cause for termination and also to instructions that
the jury had to determine whether the proffered reasons for plaintiff's
termination were pretextual.  Defendant objected, however, to the trial
court's instructions on future damages.  Both defendant and plaintiff agreed
to submit the following interrogatories for the jury to answer:

 


     1.   Was there an employment contract which required just
          cause for discharge?
     2.   If your answer is YES, was the Plaintiff discharged without
          just cause?
     3.   Aside from the just cause discharge question, was there a
          substantial breach of contract of employment by Defendant
          in the manner and means of discharge?
     4.   If your answer to questions 1 and 2 were yes, or your
          answer to question 3 was yes, what damages, if any, were
          proximately caused by the breach of contract?
     5.   Do you award punitive damages?


The jury chose to believe plaintiff's version of the events.  It found that
(1) plaintiff could be terminated only for just cause, (2) plaintiff was
discharged without just cause, and (3) defendant breached its contract in the
manner and means of discharge.  As a result, the jury awarded plaintiff
compensatory damages in the amount of $175,000.  No punitive damages were
awarded.

Following the verdict, defendant moved for judgment notwithstanding the
verdict.  It also moved for a new trial on liability on the basis that
irrelevant evidence was erroneously admitted and on damages because of an
error in the jury instructions.  It requested that the court order a
remittitur or, in the alternative, a new trial on damages because the jury
award was excessive. The trial court denied all of defendant's motions.

Defendant first contends that the trial court erred in failing to grant its
motion for judgment as a matter of law made after the verdict on plaintiff's
wrongful discharge and breach-of-implied-contract claims.  The motion for
judgment as a matter of law is the successor to the motion for a directed
verdict and the motion for judgment notwithstanding the verdict.  See
V.R.C.P. 50.  Although the terminology has changed, the applicable standard
has not.  See Reporter's Notes to 1995 Amendment, V.R.C.P. 50.  Thus, on
review of a motion for judgment as a matter of law, we must determine
"`whether the result reached by the jury is sound in law on the evidence
produced.'"  Nadeau v. Imtec, Inc., 164 Vt. ___, ___, 670 A.2d 841, 844
(1995) (quoting Foote v. Simmonds Precision Prods. Co., 158 Vt. 566, 570, 613 A.2d 1277, 1279 (1992)).  We view the evidence in the light most favorable to
the nonmoving party and exclude the effect of any modifying evidence.  Id. 
We will uphold the trial court's denial of the motion if any evidence fairly
or reasonably supports a lawful theory of the plaintiff.  Id.

Defendant's position on appeal is that there was just cause to terminate
plaintiff as a matter of law.  In reaching this conclusion, defendant argues
the standard is not whether plaintiff

 

committed the acts that resulted in her termination, but instead whether "the
employer reasonably believed the facts to be true and whether they were
supported by substantial evidence." Defendant claims that, as a matter of
law, it met this standard.

It is helpful to put this position in the context of wrongful termination law
in this state. In Taylor v. National Life Ins. Co., 161 Vt. 457, 464, 652 A.2d 466, 471 (1993), we held that although an employment contract is
normally "at will," terminable at any time for any reason, personnel manual
provisions inconsistent with an at-will relationship may be used as evidence
that the contract requires good cause for termination.  We found that manual
provisions committing the employer to a progressive discipline system were
sufficient for a jury to find that the employment contract restricted
defendant to terminating plaintiff only for cause.  Id. at 465, 652 A.2d  at
471.  We have followed Taylor in more recent decisions.  See Clement v.
Woodstock Resort Corp., 7 Vt. L.W. 341, 341 (1996); Madden v. Omega Optical,
Inc., ___ Vt. ___, ___, 683 A.2d 386, 389 (1996); Farnum v. Brattleboro
Retreat, Inc., ___ Vt. ___, ___, 671 A.2d 1249, 1254-55 (1995); Ross v. Times
Mirror, Inc., ___ Vt. ___, ___, 665 A.2d 580, 583-84 (1995); Baldwin v. Upper
Valley Servs., Inc., 162 Vt. 51, 54-55, 644 A.2d 316, 318 (1994).

In its interrogatory, the jury found that there was an employment contract in
this case "which required just cause for discharge."  This finding was
supported primarily by provisions of defendant's employee handbook and the
testimony of defendant's human resources specialist. Defendant has not
attacked it on appeal.  Instead, defendant's attack is on the jury finding
that it breached the contract.

In explaining its attack, defendant argues that the jury cannot second-guess
its termination decision, but must give deference to defendant's decision if
it is made in good faith and supported by substantial evidence.  The problem
with this argument is that the trial court did not charge this standard to
the jury.  Instead, the court charged:

      Now, a breach of contract is merely a failure to perform as
      promised.  A party is entitled to the benefits of their bargain.
      That is, each is entitled to rely on the agreement reached by the
      parties either expressly or impliedly in performing their obligations
      that they're promised, expressly or impliedly.

The standard was summarized in the jury interrogatory, which asked, "was the
Plaintiff discharged without just cause?"  There was nothing in the charge or
interrogatory suggesting that

 

the jury was to defer to defendant's view of whether there was just cause. 
Defendant did not object to the charge or the interrogatory.  See V.R.C.P.
51(b) (party may not assign giving of instruction as error unless party
objects before jury retires).

Although defendant did seek a judgment as a matter of law below, its position
there was somewhat different from its position here.  In the trial court, it
argued that under Taylor, plaintiff was required to prove that the reasons
given for the termination were a pretext.  Here, defendant has shifted to
insistence on the reasonable-belief and substantial-evidence standard.

Where the trial court proceeds upon a theory of the case, and the theory is
acquiesced in by the parties, the theory becomes the law of the case.  See
Gregoire v. Insurance Co. of N. Am., 128 Vt. 255, 261, 261 A.2d 25, 29
(1969).  The theory defendant now posits was not placed before the trial
court for it to act upon.  It would be inappropriate to consider it here. See
MacDonald v. Roderick, 158 Vt. 1, 4, 603 A.2d 369, 371 (1992).

The situation in this case is similar to that in Farnum, a wrongful discharge
case in which the defendant also argued for the first time in this Court that
the jury should have deferred to the "employer's reasonable determination
that it had good cause to discharge an employee."  ___ Vt. at ___ n.*, 671 A.2d  at 1255 n.*.  We held the issue was not preserved, and affirmed the
denial of a judgment as a matter of law using the legal standard charged to
the jury, rather than the standard sought by the employer.  See id. at ___,
671 A.2d  at 1255-56.

If we apply the standard used by the jury, we have no trouble in affirming
the verdict as supported by the evidence.  Plaintiff denied both of the
incidents that ostensibly led to her termination. Thus, the jury could have
reasonably believed that plaintiff did not engage in misconduct or that the
misconduct did not warrant termination.  See id.; Clement, 7 Vt L.W. at 342.

Next, defendant argues that the trial court committed reversible error by
allowing testimony that its store manager had broken his promise to plaintiff
that she could return to her backdoor receiver position upon request. 
Defendant contends that the testimony on the breach of the promise was
irrelevant and confused the jury into believing that plaintiff had a

 

compensable claim for wrongful transfer.  The trial court admitted the
testimony, stating that "it may be a circumstance surrounding the whole
situation."  The court revisited the ruling in response to defendant's new
trial motion, stating the "evidence was . . . relevant on the issue of the
whole surrounding background supporting the claim of pretext."

Evidence is relevant if it has "any tendency to make the existence of any
fact that is of consequence to the determination of the action more probable
or less probable."  V.R.E. 401. The trial court has broad discretion in
determining the relevance of any evidence.  See Ball v. Melsur Corp., 161 Vt.
35, 42, 633 A.2d 705, 711 (1993).  One of plaintiff's theories was that
defendant's proffered reasons for the termination were pretextual, and the
real reasons for the manager's actions were personal dislike of plaintiff and
her high salary based on her seniority. Under the broad definition of V.R.E.
401, the court could find the evidence relevant to plaintiff's pretext
theory.  It supported plaintiff's view that she was set up for failure and
purposely kept in the deli when it became clear that failure was imminent.

We recognize that there was some risk that the jury would misuse the evidence
to award damages because defendant breached the agreement to transfer
plaintiff back to her original position.  We see this as a question of
whether the probative value of the evidence was substantially outweighed by
the danger of misleading the jury.  See V.R.E. 403.  Again, the trial court
had broad discretion in making its ruling, and we review only for abuse of
that discretion. See Quirion v. Forcier, 161 Vt. 15, 21, 632 A.2d 365, 369
(1993).  The trial court in this case was aware of the risk and considered
it.  We see no abuse of discretion.  We also note that defendant could have
requested a limiting instruction to reduce the risk of juror misuse of the
evidence, but failed to do so.  See State v. Robinson, 158 Vt. 286, 293, 611 A.2d 852, 856 (1992).

Next, defendant argues that the jury instruction on reducing plaintiff's
damage award to present value was so confusing and misleading that a new
trial on damages is warranted.  The charge given was as follows:

 

     If, in your deliberations, you find dollar value for future damages,
     that is from the present into the future, the plaintiff . . . must
     prove that by fair preponderance of the credible evidence.  But if
     you do find that future damages have been proved, that you may
     find them without excessive speculation from the evidence, you
     must then find the present cash value of such amount and award
     only the present cash value of such future damages.  Present cash
     value is determined by methods of discounting the future value to
     the present.  It is the present sum of money which you may
     calculate, together with what the money may reasonably be
     expected to earn in the future -- for the period and extent that you
     determine when and if future damages are to be awarded --
     considering what the present amount of money would earn in the
     future for the period which you determined that such loss will be
     suffered.  And that amount presently invested at a reasonable rate
     of return, what will it produce in dollar equivalent to pay such
     future damages when it accrues.  In other words, in determining
     the amount you award for future damages, if any, you must
     ascertain the amount that would be made if that investment
     continues until the projected time of the suffering of damage.

We have upheld use of a standard and general charge on reducing future awards
to present value.  See Debus v. Grand Union Stores of Vt., 159 Vt. 537, 542,
621 A.2d 1288, 1291-92 (1993).

A jury charge is not erroneous if, read as a whole, it breathes the true
spirit and doctrine of the law.  See Rooney v. Medical Ctr. Hosp. of Vt.,
Inc., 162 Vt. 513, 519, 649 A.2d 756, 759 (1994).  To secure a new trial, the
appellant must show that the charge is both erroneous and prejudicial.  See
Debus, 159 Vt. at 542, 621 A.2d  at 1292.  We agree that this charge is not a
model of clarity and that it may have confused the jury.  We conclude,
however, that any prejudice resulting from that confusion is adequately
addressed by our decision to require a remittitur or a new trial.

Finally, defendant contends that the amount of compensatory damages awarded
by the jury, $175,000, was excessive, and that the trial court erred in
denying its motion for a new trial on damages or, in the alternative, a
remittitur.  The only evidence on damages was the relatively brief testimony
of plaintiff and an exhibit summarizing her claim.  Plaintiff testified that
she had eight more years to retirement when she was terminated.  She further
testified that at the time of trial she was working at two part-time jobs
with low pay rates and no benefits.  Based on this

 

testimony, plaintiff's counsel prepared an exhibit that showed (1) the gross
wages and benefits plaintiff would have received if she continued to work for
defendant, (2) her actual income since the termination and a projection of
her expected income until her retirement, and (3) the difference, totaling
$140,503.  In his closing argument, plaintiff's counsel argued for an award
of $140,000 to restore plaintiff's income in the "eight years left to
retirement."  The court charged the jury that they could award damages for
future income losses, and defendant did not object to this charge.

In seeking compensatory damages, plaintiff sought both back pay and front
pay.  Back pay consists of wages lost up until the time of judgment, and
front pay covers lost future wages. Defendant has not contested the award of
front pay damages generally, and therefore, we need not decide whether front
pay is a proper element of damage in a breach-of-contract case.  Other
jurisdictions are not unanimous on this issue.  Compare Torosyan v.
Boehringer Ingelheim Pharmaceuticals, Inc., 662 A.2d 89, 106 (Conn. 1992)
(future lost wages are recoverable for breach of implied contract of
employment) with Sterling Drug, Inc. v. Oxford, 743 S.W.2d 380, 386 (Ark.
1988) (front pay damages not recoverable in wrongful discharge case because
they are "too speculative and uncertain").  When front pay is allowed, the
damages must be limited to a reasonable period of time, see Torosyan, 662 A.2d  at 106, and the amount must not be speculative, Smith v. Smithway Motor
Xpress, Inc., 464 N.W.2d 682, 688 (Iowa 1990).

We conclude that the award of front pay in this case was too speculative
because it exceeded the amount claimed by plaintiff, who requested damages
based on a normal retirement age of sixty-five years.  The trial court
defended the amount on the theory that the jury could have determined that
she would have worked beyond the normal retirement age of sixty-five years
and awarded future wages on that basis.  We agree that the jury could find
that it would be reasonable to award damages for future wages for the period
between the trial and plaintiff's normal date of retirement.  Plaintiff had
been a long-term employee at the store, and the time to retirement was
relatively short.  There was no evidence, however, that plaintiff planned to
work beyond age sixty-five.  Moreover, plaintiff's evidence implied that she
would retire at

 

sixty-five.  Thus, even when we view the evidence in the light most favorable
to plaintiff, as we must, see Winey v. William E. Dailey, Inc., 161 Vt. 129,
144, 636 A.2d 744, 753 (1993), we do not believe that the $175,000 verdict
was within the range of the evidence presented.

We now must decide the appropriate remedy on remand.  Defendant argues both
that the damages are excessive and that the present-value instructions misled
the jury.  When the sole ground for retrial is excessive damages, our rules
of procedure require the trial court to offer plaintiff the opportunity to
remit the excess.  Civil Rule 59(a) states that "[a] new trial shall not be
granted solely on the ground that the damages are excessive until the
prevailing party has first been given an opportunity to remit such portion
thereof as the court deems to be excessive." V.R.C.P. 59(a).  Thus, in
Ventura v. Almartin Motors, Inc., 139 Vt. 430, 432, 430 A.2d 1279, 1280
(1981), we held that the trial court improperly failed to offer remittitur in
a conversion action.  In that case, we rejected the defendant's claim that
the "jury's error [in awarding damages] so pervaded the whole verdict as to
make the remedy of remittitur ineffective."  Id. at 431, 430 A.2d  at 1280. 
Finding no error in the jury charge with respect to liability, we granted
plaintiff's request to remit the excess damages rather than undergo the
expense of a new trial.  Id. at 431-32, 430 A.2d  at 1280.

Other courts have followed our approach and allowed the plaintiff to choose
between remittitur or new trial when the sole issue on appeal was excessive
damages.  In Caldwell v. Haynes, 643 A.2d 564, 573 (N.J. 1994), for example,
the trial court erred by failing to instruct the jury to discount future lost
income or to base lost income on plaintiff's work-life expectancy. The future
damages award in that case could be supported only by assuming that the
plaintiff would work steadily without a break until he reached eighty years
of age.  Id. at 568. Concluding that "the trial court should be able to
determine a realistic and fair calculation of damages as a basis for an order
of remittitur," the New Jersey Supreme Court encouraged the trial court to
consider remittitur on remand.  Id. at 575.  Although acceptance of
remittitur by the plaintiff denies the defendant of a new-trial motion, id.
at 574, the practice is available "if the only issue is the quantum of
damages, the claimant's right to relief is clear, and `the verdict

 

was not the result of compromise or otherwise tainted.'"  Id. at 575 (quoting
S. Pressler, Current N.J. Court Rules, cmt. 1 on R. 4:49-1 (1994)).

The use of remittitur to reduce excess lost future wages in an action for
breach of contract is not unprecedented.  In Cashdollar v. Mercy Hosp., 595 A.2d 70, 76-77 (Pa. Super. Ct. 1991), the trial court found that the jury
erred in concluding that the parties intended an implied-employment contract
to last fourteen years, and properly ordered remittitur for seven of those
years.  Drawing on circumstantial evidence, the trial court inferred that the
forty-seven-year-old plaintiff would have needed seven years to accomplish
the objectives of the employment.  Id. at 76.  In the instant case, the
estimate of excess damages is likely to be more reliable than the court's
estimate in Cashdollar, since we can reasonably assume that plaintiff would
have retired at age sixty-five rather than guess at the number of years
required to accomplish the objectives of the employment.

We have already concluded that the jury could properly find defendant liable. 
Even if the jury instructions on present value were erroneous, we do not
believe -- and defendant does not allege -- that they tainted the jury's
deliberations with respect to liability.  See Ventura, 139 Vt. at 431-32, 430 A.2d  at 1280.  Nor are the damages so high as to reflect passion and
prejudice in the rendering of the verdict.  See 2 R. Field et al., Maine
Civil Practice § 59.2, at 61 (2d ed. 1970).  Thus, the sole ground for
retrial is excessive damages.  Accordingly, we hold that the trial court
should have ordered a remittitur to an amount equal to the present value of a
sum necessary to maintain plaintiff's income until age sixty-five.  This
remedy is sufficient to eliminate any prejudice that may have resulted from
the present-value instruction, as well as to correct the excessive amount of
the jury award.

The size of the remittitur is the amount needed to eliminate the excess
damages in the jury's verdict.  See Cashdollar, 595 A.2d  at 76 ("A remittitur
should fix the highest amount any jury could properly award, giving due
weight to all the evidence offered."); C. Harvey, Jr. et al., Maine Civil
Practice § 59.2, at 368 (2d ed. Supp. 1981) (remittitur should reflect
highest amount jury could properly award).  We remand for the court to order
the appropriate amount

 

to be remitted or, in lieu thereof, a new trial.

The liability judgment is affirmed.  The damage award is reversed and
remanded for proceedings not inconsistent with this opinion.



                              FOR THE COURT:



                              _______________________________________
                              Associate Justice



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                                 Footnotes

FN1.  Golub Corporation and Price Chopper Operating Company of Vermont, Inc.
are referred to collectively in this opinion as "defendant."