KIMBERLY S. JASPER, Plaintiff-Appellant, vs. H. NIZAM, INC., d/ b/a KID UNIVERSITY and MOHSIN HUSSAIN, Individually and in his Corporate Capacity, Defendants-Appellees.
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IN THE COURT OF APPEALS OF IOWA
No. 7-052 / 05-1994
Filed May 9, 2007
KIMBERLY S. JASPER,
Plaintiff-Appellant,
vs.
H. NIZAM, INC., d/b/a KID UNIVERSITY
and MOHSIN HUSSAIN, Individually
and in his Corporate Capacity,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Donna L. Paulsen,
Judge.
Kimberly S. Jasper appeals the trial court’s grant of the defendants’
motion for directed verdict and entry of judgment in favor of the defendants in
wrongful termination in violation of public policy claim. AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED.
Andrew Legrant and Mark D. Sherinian, of Sherinian & Walker, West Des
Moines, for appellant.
Gordon R. Fischer, of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des
Moines, for appellee.
Heard by Huitink, P.J., and Zimmer and Baker, JJ.
2
BAKER, J.
We filed our opinion in this case on March 28, 2007, but subsequently
granted defendant Mohsin Hussain’s petition for rehearing.
Our March 28,
2007, decision is therefore vacated, and this opinion replaces it. Kim Jasper
appeals the trial court’s grant of the defendants’ motion for directed verdict and
entry of judgment in favor of the defendants. A conditional new trial is awarded
and the case remanded to the district court. Jasper may avoid a new trial by
agreeing to reduce the award for emotional distress from $100,000 to $20,000.
If a new trial is held, the jury should be instructed on punitive damages, and
evidence that the defendant had operated another daycare center that was
cited for violating children/teacher ratio regulations should be admitted.
I. Background Facts and Proceedings
Kim Jasper was employed as the director of Kid University, a children’s
daycare center located in Johnston, Iowa, from August 10 through December 1,
2003. Her duties as director included the supervision of staff, ensuring the safety
of the children, maintaining good relationships with parents, and ensuring the
center was in compliance with applicable laws and regulations. H. Nizam is the
corporate entity that operated Kid University. Mohsin Hussain is the President,
and his wife, Zakia Hussain, is the Vice President of the corporation.
Prior to Jasper’s employment, the center had been investigated by the
Iowa Department of Human Services (DHS) in response to a parent complaint
concerning the children/teacher ratio. The investigation uncovered a number of
deficiencies at the center. As a result of the investigation, DHS checked on the
center regularly, including frequent announced and unannounced visits.
3
Jasper and the Hussains had regular conversations about the
children/teacher ratio and staff expenses. Initially, Mohsin Hussain told Jasper to
do what she needed to do to comply with the State’s staffing ratio requirements.
Within a few weeks of her hire, however, Mohsin Hussain told Jasper they could
not afford to run the center with payroll expenses so high. During November
2003, Jasper and Krysti Christensen, the center’s Assistant Director, met with the
Hussains on three occasions to discuss staffing and expenses.
At trial, Jasper testified that she explained to them that she could not cut
staff hours any more without violating the state regulations, and she was not
willing to do that. Mohsin Hussain testified that he never told Jasper to cut staff,
and her termination had nothing to do with the children/teacher ratios.
Jasper was involuntarily terminated from Kid University on December 1,
2003. At the time of her termination, she was given a letter, signed by Mohsin
and Zakia Hussain, that listed a number of reasons for her termination, including
insubordination, failure to notify the Hussains when she would leave the building,
failure to organize and staff a booth at the Johnston Farmers Market, “a different
agenda,” failure to keep the Hussains informed of events at the center, problems
with organizing and maintaining children/teacher ratios, improper use of the
telephone, and “[t]oo many staff hours considering the enrollment.” Jasper was
given the termination letter by Dan Scholtes, who had been hired by Hussain to
replace Jasper. 1
1
After Jasper’s termination, a parent meeting was held to
Jasper testified that, upon giving her the termination letter, Scholtes told her she
needed to leave the building immediately and escorted her toward the door. When
Jasper protested because she wanted to retrieve her personal belongings and she
needed to get her children who attended the center, Scholtes threatened to call the
4
discuss the change in the director position and other parent concerns. When
questioned about Jasper’s termination, Hussain insinuated that some money had
been missing.
After the termination, Jasper did not obtain full-time employment until April
2004. Her family had been living in a house owned by the Hussains, which they
were required to vacate by February 1, 2004. 2 During this time, Jasper suffered
frequent crying spells and had difficulty sleeping. At one point, she was taken to
the hospital due to an anxiety attack and was prescribed anti-depressant and
anti-anxiety medication. She was socially withdrawn, distraught, and short with
her children. Jasper gained considerable weight during this time.
On December 9, 2003, Jasper filed a petition against the defendants for
wrongful discharge in violation of public policy, alleging that she was terminated
for refusing to understaff the center. In January 2004, the defendants filed a preanswer motion to dismiss, which was denied. In July 2005, defendants filed a
motion for summary judgment, which was denied. The matter proceeded to jury
trial on September 12, 2005. Prior to submission of the case to the jury, the
defendants moved for directed verdict. The trial judge reserved ruling on the
motion and submitted the case to the jury.
police. When she tried to get her children, Scholtes stepped in front of her and forced
her out of the building. Eventually some other teachers brought her children out to her.
At trial, Scholtes denied escorting Jasper out of the building. He admitted that he did not
allow her to retrieve anything from the office. Scholtes testified that, after Jasper left the
building, she was talking to parents in the parking lot. He therefore called the sheriff’s
department, and an officer came to the center.
2
A few days after her termination, Jasper was served a three-day notice to quit.
Ultimately, the Jaspers were not required to leave the premises until February 1, 2004.
5
On September 16, 2005, the jury returned a verdict in favor of Jasper,
awarding her $26,915 for lost past earnings, $100,000 for past pain and
suffering, and $39,507.25 for expenses and additional services.
On October 28, 2005, the defendants filed a post-trial motion denominated
a “motion for directed verdict.” On December 2, 2005, the trial judge granted the
defendants’ motion for directed verdict and entered judgment in favor of the
defendants. The trial judge held that Jasper failed to show the existence of a
clearly recognized and well-defined public policy supporting her cause of action
and failed to meet her burden with regard to causation. Jasper appeals.
II. Standard of Review
At the outset, the court notes that this appeal is from the grant of a
directed verdict in favor of the defendants. Although denominated a “directed
verdict,” the court finds that review should be on the basis of a judgment
notwithstanding verdict as a verdict had been returned. See Iowa R. Civ. P.
1.1003(2) (“If the movant was entitled to a directed verdict at the close of all the
evidence, and moved therefor, and the jury did not return such verdict, the court
may then . . . enter judgment as though it had directed a verdict . . .” (emphasis
added)). We review the trial court’s ruling on a motion for directed verdict for
correction of errors at law. Summy v. City of Des Moines, 708 N.W.2d 333, 34344 (Iowa 2006) (citing Bellville v. Farm Bureau Mut. Ins. Co., 702 N.W.2d 468,
473 (Iowa 2005)). We also review the trial court’s court ruling on a motion for
judgment notwithstanding verdict for correction of errors at law. Gibson v. ITT
Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001). We view the evidence in
the light most favorable to the party opposing the motion.
Iowa R. App. P.
6
6.14(6)(b). We take into consideration “every legitimate inference that may fairly
and reasonably be made.” Midwest Home Distrib., Inc. v. Domco Indus. Ltd.,
585 N.W.2d 735, 738 (Iowa 1998) (citations omitted). “[T]he court must draw all
reasonable inferences in favor of the nonmoving party, and it may not make
credibility determinations or weigh the evidence.”
Reeves v. Sanderson
Plumbing Prods., Inc., 530 U.S. 133, 150-51, 120 S. Ct. 2097, 2110, 147 L. Ed.
2d 105, 122 (2000) (citations omitted). It is not the court’s task to determine how
we would have ruled on the evidence presented. Tudor v. Charleston Area Med.
Ctr., Inc., 506 S.E.2d 554, 565 (W.Va. 1997). Our “task is to determine whether
the evidence was such that a reasonable trier of fact might have reached the
decision below.” Id.
III. Wrongful Discharge
Discharge of an at-will employee is unlawful when it violates public policy.
Lloyd v. Drake Univ., 686 N.W.2d 225, 228 (Iowa 2004). To succeed on a tort
claim for wrongful discharge in violation of public policy, a plaintiff must prove:
(1) The existence of a clearly defined public policy that protects an
activity.
(2) This policy would be undermined by a discharge from
employment.
(3) The challenged discharge was the result of participating in the
protected activity.
(4) There was lack of other justification for the termination.
Id. (citing Davis v. Horton, 661 N.W.2d 533, 535 (Iowa 2003)).
The Iowa Supreme Court has recognized that “[s]ome courts are
beginning to articulate” elements one through four as (1) the clarity element, (2)
7
the jeopardy element, (3) the causation element, and (4) the absence of
justification element. Fitzgerald v. Salsbury Chemical, Inc., 613 N.W.2d 275,
282, fn. 2 (Iowa 2000) (citing Gardner v. Loomis Armoured, Inc., 913 P.2d 377,
382 (Wash. 1996); Collins v. Rizkana, 652 N.E.2d 653, 657 (Ohio 1995)).
A. Clarity of Public Policy
To determine whether a clearly defined public policy exists, the Iowa
Supreme Court has “generally looked only to our statutes and state constitution.”
Lloyd, 686 N.W.2d at 229 (citation omitted). The court has also recognized that
other states have looked to other sources, such as judicial
decisions and administrative rules. Regardless of the source,
however, “we proceed cautiously and will only extend such
recognition to those policies that are well recognized and clearly
defined.” Only such policies are weighty enough “to overcome the
employer’s interest in operating its business in the manner it sees
fit,” which we have long and vigorously protected.
Id. (citations omitted).
“Over the years, [the Iowa Supreme Court] ha[s] recognized a number of
clearly defined public policies.”
Id. (citing Fitzgerald, 613 N.W.2d. at 285-89
(public policy in favor of providing truthful testimony)); see also Teachout v.
Forest City Cmty. Sch. Dist., 584 N.W.2d 296, 300-01 (Iowa 1998) (public policy
in favor of reporting suspected child abuse); Tullis v. Merrill, 584 N.W.2d 236,
239 (Iowa 1998) (public policy in favor of permitting employees to make demand
for wages); Lara v. Thomas, 512 N.W.2d 777, 782 (Iowa 1994) (public policy in
favor of permitting employees to seek partial unemployment benefits); Springer v.
Weeks & Leo Co., 429 N.W.2d 558, 560-61 (Iowa 1988) (public policy in favor of
permitting employees to seek workers’ compensation for work-related injuries).
8
“However, when [the Iowa Appellate Courts] have not previously identified
a particular public policy to support an action, the employee must first identify a
clear public policy which would be adversely impacted if dismissal resulted from
the conduct engaged in by the employee.”
Fitzgerald, 613 N.W.2d at 282
(footnote omitted) (citing Yockey v. State, 540 N.W.2d 418, 420-21 (Iowa 1995)
(the public policy in favor of permitting employees to seek workers’ compensation
benefits not jeopardized by termination from employment for missing work
following injury); Borschel v. City of Perry, 512 N.W.2d 565, 567 (Iowa 1994) (no
public policy in favor of presumption of innocence in work place to give rise to an
action for wrongful discharge for conduct which resulted in criminal charges);
French v. Foods, Inc, 495 N.W.2d 768, 771-72 (Iowa 1993) (presumption of
innocence not an actual public policy)).
To determine whether a public policy has been implicated, the trial court
must decide as a matter of law whether a particular employee act is
protected by public policy . . . . We have recognized an employee's
cause of action if the discharge is in retaliation for performing an
important and socially desirable act, exercising a statutory right or
refusing to commit an unlawful act. These distinctions have been
more clearly expressed as three categories of protected employee
conduct: (1) exercising a statutory right or civil obligation; (2)
refusing to engage in illegal activities; or (3) reporting criminal
conduct to supervisors or outside agencies.
Butts v. Univ. of Osteopathic Med. & Health Scis., 561 N.W.2d 838, 841 (Iowa Ct.
App. 1997) (quoting Borschel v. City of Perry, 512 N.W.2d 565, 567 (Iowa 1994);
citing Werner, The Common Law Employment at Will Doctrine: Current
Exceptions for Iowa Employees, 43 Drake L.Rev. 290, 314 (1994)).
This court turns to the issue of whether Jasper was discharged in violation
of public policy. In support of her assertion that she was, in fact, discharged in
9
violation of public policy, Jasper first relies on Iowa Code chapter 237B as
establishing the public policy applicable in these circumstances. See Iowa Code
§ 237B.1(3) (2003) (“The standards established by [DHS] shall be broad facility
standards for the protection of children’s safety.”) (emphasis added).
Iowa
Administrative Code 441-109.8(237A) provides specific staff ratio requirements.
When Chapter 237B and the Iowa Administrative Code are considered,
particularly in conjunction with one another, it appears there is statutory support
for a finding that there is a clear public policy that adequate staffing is required
for the health and safety of the children.
The Iowa appellate courts do not appear to have had occasion to consider
whether there is a clearly defined public policy in this particular situation. 3 There
is, however, authority that the protection of children is a defined public policy.
The Iowa Supreme Court has stated:
Our legislature has enacted a statute for the reporting and
investigation of suspected cases of child abuse. The general
assembly has determined that [c]hildren in this state are in urgent
need of protection from abuse . . .
[W]e think the forceful
language of the statute articulates a well-recognized and defined
public policy of Iowa from which such protection can be implied.
Teachout, 584 N.W.2d at 300-01 (citations omitted).
3
Other jurisdictions have found the existence of public policy under similar
circumstances. See McQuary v. Bel Air Convalescent Home, Inc., 684 P.2d 21, 23 (Or.
Ct. App. 1984) (holding protection of nursing home patients is an important public
policy); Tudor v. Charleston Area Med. Ctr., Inc., 506 S.E.2d 554, 567 (W.Va. 1997)
(holding a state requirement that a hospital unit be properly staffed to ensure adequate
care for patients, “especially children . . . , who must depend upon others to protect their
medical interests and needs,” is a statement of substantial public policy).
10
Both Chapter 237B and the Iowa Administrative Code provide strong
evidence that the need for adequate staffing at daycare centers is a wellrecognized and defined public policy of Iowa. Further, it is a violation of public
policy to terminate an employee for refusing to do an illegal act. Jones v. Lake
Park Care Ctr., Inc., 569 N.W.2d 369, 377 (Iowa 1997). The clearly defined
public policy element is met.
B. Jeopardy
Having resolved the public policy issue, the Court turns to an examination
of the second element, whether the policy would be undermined by a discharge
from employment, also referred to as the “jeopardy” element.
Once a clear public policy is identified, the employee must
further show the dismissal for engaging in the conduct jeopardizes
or undermines the public policy. Thus, this element requires the
employee to show the conduct engaged in not only furthered the
public policy, but dismissal would have a chilling effect on the public
policy by discouraging the conduct . . . . Thus, when the conduct of
the employee furthers public policy or the threat of dismissal
discourages the conduct, public policy is implicated.
Fitzgerald, 613 N.W.2d at 283-84 (citations omitted).
The court finds that, if Jasper’s dismissal was due to her refusal to cut
staff below the minimum staffing requirements, such a dismissal does jeopardize
and undermine the public policy. The jeopardy element is met.
C. Causation
With regard to whether the challenged discharge was the result of
participating in the protected activity, also referred to as the “causation” element,
“[t]he causation standard is high.” Id. at 289. The court is required to determine
if a reasonable fact finder would conclude Jasper’s refusal to staff below state-
11
mandated levels “was the determinative factor in the decision to discharge” her.
Id. (citing Teachout, 584 N.W.2d at 300).
While questions regarding the existence of a public policy and whether the
policy is undermined by a discharge from employment are questions for the court
to resolve, “the elements of causation and motive are factual in nature and
generally more suitable for resolution by the finder of fact.” Id. at 282. “[I]f there
is a dispute over the conduct or the reasonable inferences to be drawn from the
conduct, the jury must resolve the dispute.” Id. at 289.
In reviewing the issue of causation, the Iowa Supreme Court has stated:
The employee’s engagement in protected conduct must be the
determinative factor in the employer’s decision to take adverse
action against the employee. A factor is determinative if it is the
reason that “tips the scales decisively one way or the other,” even if
it is not the predominant reason behind the employer’s decision.
Thus, we examine the evidence to determine whether a reasonable
fact finder could conclude that [the protected activity] was the
determinative factor in the [employer’s] decision to fire her.
Teachout, 584 N.W.2d at 301-02 (quoting Smith v. Smithway Motor Xpress, Inc.,
464 N.W.2d 682, 686 (Iowa 1990) (citations omitted).
Where the evidence simply establishes that the employee’s termination
occurred after the employer learned the employee had engaged in a protected
activity, such evidence alone is insufficient to establish causation. Id. at 302; see
also Phipps v. IASD Health Servs. Corp., 558 N.W.2d 198, 203 (Iowa 1997)
(holding mere temporal relationship between the protected conduct and the
discharge is not sufficient evidence of causation). However, evidence showing a
causal connection in addition to the timing of the adverse employment action is
sufficient evidence of causation.
See City of Hampton v. Iowa Civil Rights
12
Comm'n, 554 N.W.2d 532, 536 (Iowa 1996); Niblo v. Parr Mfg., Inc., 445 N.W.2d
351, 353 (Iowa 1989); Springer, 429 N.W.2d at 562.
Such a showing may be made by circumstantial evidence.
See e.g.
Adams v. Green Mountain R.R. Co., 862 A.2d 233, 237 (Vt. 2004) (“‘An
employer's unlawful motive may be inferred from the circumstances where no
direct evidence of the employer’s intent exists in the record.’”) (quoting
Rosenberg v. Vt. State Colleges, 852 A.2d 599, 602 (Vt. 2004)).
Nevertheless, when a plaintiff relies on the timing of an adverse
employment decision to show improper motive, the record must
support an inference that the timing is suspect. There must be
some evidence other than chronology that gives the factfinder
reason to believe that the timing is an indication of improper motive.
Adams, 862 A.2d at 237 (citing Teachout, 584 N.W.2d at 302 (Iowa 1998)
(holding the mere fact that adverse employment decision occurred after
protected activity is not, standing alone, sufficient to support finding that decision
was in retaliation for engaging in protected activity)).
Causation was disputed in this case, and the jury found in favor of Jasper.
The trial court found that the evidence of causation was insufficient to meet her
burden because there was no evidence that Hussain ever directly instructed
Jasper to violate DHS staffing regulations and Jasper “did not present any
credible evidence about the staff/child ratios at the center at the relevant times to
prove staff reductions would have resulted in regulatory violations.” The court
noted that, while there was substantial evidence in the record to support the fact
that Hussain was concerned about overstaffing, “[t]here is a difference, however,
between a legitimate concern about the costs of overstaffing and desiring the
center to be understaffed in violation of DHS regulations.”
13
Jasper asserts that in setting aside the jury verdict, the trial court
disregarded the direct and circumstantial evidence regarding causation. It is not
surprising there was no direct instruction to specifically violate DHS staffing
regulations – very seldom will there be such direct evidence of wrongful
termination in violation of public policy cases. In Niblo v. Parr Mfg. Inc., 445
N.W.2d 351, 353 (Iowa 1989), a terminated employee filed a wrongful
termination claim, alleging the employer terminated her in violation of public
policy because she planned to file a workers’ compensation claim.
The
defendant employer asserted there was insufficient evidence that the employee
was going to file a workers’ compensation claim. Id. The employee had been
fired after she told the company president she needed protective equipment and
medical treatment.
Id.
The Iowa Supreme Court held that “[d]irect and
circumstantial evidence are equally probative . . . . A jury could deduce from this
evidence that the plaintiff was discharged because she was threatening to file a
claim for these benefits.” Id.
There was substantial evidence that the desire by the Hussains to have
Jasper violate the regulations was the determinative factor in the decision to
discharge. Evidence of causation presented at trial included the December 1,
2003 termination letter, which refers to Hussain’s concerns with overstaffing 4 and
testimony
4
regarding
November
2003
meetings
between
Jasper,
Krysti
The termination letter states Jasper was terminated for a number of issues, including,
“Went to DHS office. Why? . . . [t]oo many staff hours considering the enrollment . . .
organizing and maintaining ratio of teacher/kids was a problem.”
14
Christensen, and the Hussains. 5 Jasper testified that when she and Christensen
met with the Hussains in early November 2003, she explained to them that she
could not cut staff hours without violating state regulations, and she was unwilling
to do that. Jasper further testified that when she told the Hussains that the DHS
representative visited frequently to check the ratio, Mrs. Hussain told her, “What
Ann Williams doesn’t know won’t hurt her.”6
Ann Williams, a DHS child care consultant, testified that prior to Jasper
being hired, she had documented significant concerns with the center, and in
February 2003, she had received and investigated a parent complaint regarding
ratio issues at the center. 7 Williams testified that there were improvements made
during Jasper’s tenure, that she and Jasper had discussed Hussain’s desire to
cut back staff hours, and that Williams’s conversations with Hussain regarding
the state’s requirements for staffing were “met with either reluctance or a lack of
understanding.”
Jessie Thompson, a former center employee, testified that the required
ratio in the one-year-old room was one-to-four.
After Jasper’s termination,
Thompson would often be alone with five to six babies, and she would have to
leave the children alone in the room in order to use the restroom. The jury could
5
Christensen, the center’s Assistant Director, testified that they met on several
occasions to try to come up with ideas on how to cut staff. Christensen also testified that
she and Jasper both told Hussain they could not staff below the DHS ratio standards,
and that if they cut any further, they would violate the standards.
6
Tammy Frommelt, Jasper’s sister who previously worked as a private child care
consultant for the center, testified that when they discussed the ratio issue, Mrs. Hussain
told her, “It doesn’t matter what the State doesn’t know when they’re not here.”
7
Williams testified that other concerns included the toys being inadequate, lack of
cleanliness, inadequate food and paper supplies (i.e. paper towels and toilet paper), and
an unlicensed driver transporting children.
15
infer from this that Hussain, having fired Jasper, was then able to have his wish
of staffing the center in violation of DHS regulations.
The record does not contain evidence that the Hussains explicitly told
Jasper to cut staff below the required ratio.
Based upon the circumstantial
evidence presented at trial, however, the jury could reasonably infer that Jasper’s
refusal to cut staff ratios was the determinative factor in Hussain’s decision to
terminate her employment.
See Teachout, 584 N.W.2d at 301-02; see also
Reeves, 530 U.S. at 147, 120 S. Ct. at 2108, 147 L. Ed. 2d at 119 (“it is
permissible for the trier of fact to infer the ultimate fact of discrimination from the
falsity of the employer’s explanation”); Gibson v. ITT Hartford Ins. Co, 621
N.W.2d 388, 391 (Iowa 2001) (“If reasonable minds could differ on an issue of
fact, the issue is for the jury.”). The causation element is met.
D. Absence of Justification
This case also presents an issue with regard to whether there was lack of
other justification for the termination, i.e., whether the absence of justification
element was met. “[A] plaintiff must not only satisfy the court on the public policy
and jeopardy elements of the tort, but offer adequate evidence from which a lack
of justification for termination can be inferred.” Fitzgerald, 613 N.W.2d at 282.
The jury found in favor of Jasper on the justification element. Although
they discussed the issues regarding staffing ratios and costs on numerous
occasions, Hussain never provided Jasper with documentation regarding job
performance issues, nor that her employment was in jeopardy. When asked at a
parent meeting about Jasper being “let go,” Hussain implied that some money
16
had been missing.
At trial Jasper responded to each of the reasons for
termination listed in the December 1, 2003 letter.
The combination of the lack of a previous warning about job performance
issues, the additional justification to the parents that money had been missing,
and Jasper’s response to the other itemized reasons for termination, are
sufficient to allow a reasonable jury to conclude there was a lack of other
justification for the termination. See Fitzgerald, 613 N.W.2d at 289 (holding a
dispute over the existence of other justifiable reasons for the termination is
generally for the jury).
Jasper has met the clarity, jeopardy, causation, and absence of
justification elements of her wrongful discharge claim. The need for adequate
staffing at daycare centers is a well-recognized and defined public policy of Iowa.
An employee’s dismissal due to a refusal to cut staff below the minimum staffing
requirements would jeopardize and undermine the public policy. Based upon the
circumstantial evidence presented at trial, the jury could reasonably infer that
Jasper’s refusal to cut staff ratios was the determinative factor in Hussain’s
decision to terminate her employment. Finally, there was sufficient evidence to
allow a reasonable jury to conclude there was a lack of other justification for the
termination.
The trial court erred in directing a verdict for defendants or in
granting a judgment notwithstanding the verdict.
IV. Damages
The jury found that Hussain wrongfully discharged Jasper and awarded:
$26,915 for lost past earnings, $100,000 for past pain and suffering, and
$39,507.25 for expenses and additional services, totalling $166,422.25.
17
Because the trial court found Jasper failed to meet her burden of proof with
regard to the public policy and causation elements of her claim, it set aside the
jury award.
A. Pain and Suffering
The trial court found Jasper failed to meet her burden of proof with regard
to the public policy and causation elements of her claim and therefore set aside
the $100,000 the jury awarded for emotional distress. Anticipating the possibility
of reversal on appeal, the trial court reduced the $100,000 to $20,000 “both
because it appears to be the result of passion or some sort of prejudice and
because it lacks evidentiary support.” See Estate of Pearson v. Interstate Power
and Light Co., 700 N.W.2d 333, 345 (Iowa 2005).
Motions challenging the amount of a verdict are reviewed for an abuse of
discretion. Fisher v. Davis, 601 N.W.2d 54, 57 (Iowa 1999); Kuta v. Newberg,
600 N.W.2d 280, 284 (Iowa 1999). We also review remittitur rulings for an abuse
of discretion. Newberg, 600 N.W.2d at 285.
The trial court noted that Hussain is of Indian origin, and English is not his
first language. He was not a sympathetic witness, and the evidence showed he
was “not the best manager and it would have been difficult to work for him. The
manner in which he terminated [Jasper] was insensitive at best . . . .” The trial
court found a
strong likelihood that the passions of the jury were aroused against
Mr. Hussain and that they were prejudiced against him because of
his behavior. The large emotional distress award was likely the
result of a desire to punish Mr. Hussain rather than a genuine effort
to compensate [Jasper] for emotional distress.
18
The trial court found that there was not enough evidence in the record to
support the jury’s $100,000 award for emotional distress.
Jasper presented
some evidence of emotional distress, e.g., her testimony that she was upset and
shaken, she cried a lot and had trouble sleeping, and her anxiety attack.
Because the trial court found the $100,000 was an attempt to punish Hussain
rather than to justly compensate Jasper, it reduced the award to $20,000 for
emotional distress, an amount “appropriate based on the evidence in the record.”
Jasper asserts that the trial court erred in reducing these damages
because the determination of damages is traditionally a jury function, and the
jury’s award should be disturbed “only for the most compelling reasons.” Estate
of Pearson v. Interstate Power & Light Co., 700 N.W.2d 333, 345 (Iowa 2005). A
verdict should not be set aside or altered unless it is
(1) flagrantly excessive or inadequate; or (2) so out of reason as to
shock the conscience or sense of justice; or (3) raises a
presumption it is the result of passion, prejudice or other ulterior
motive; or (4) is lacking in evidential support.
Schmitt v. Jenkins Truck Lines, Inc., 170 N.W.2d 632, 659 (Iowa 1969). The
most important of the tests is support in the evidence. Tullis, 584 N.W.2d at 241.
Where there is support in the evidence the others tests rarely arise, but if the
verdict lacks support, they all may arise. Id.
While a verdict should not be set aside simply because the trial court
would have reached a different conclusion, the trial court “always has inherent
power to set aside a verdict which fails to do substantial justice between the
parties.”
Kautman v. Mar-Mac Cmty. Sch. Dist., 255 N.W.2d 146, 147 (Iowa
1977) (citations omitted).
19
The testimony of Jasper and her husband was sufficient to support an
award for emotional distress. See Shepard v. Wapello County, 303 F.Supp.2d
1004, 1021 (S.D.Iowa 2003) (holding the testimony of the plaintiff and family
members sufficient evidence to support emotional distress damages). “The jury’s
discretion, however, is not boundless and is limited to a reasonable range
supported by the evidence. If the verdict is substantially above that range, the
conscience of the Court becomes involved.” Id.
Jasper cites Shepard to support her contention that she submitted
adequate evidence to justify the jury’s award.
In Shepard, the plaintiff’s
emotional distress also resulted from the single incident of being discharged from
his job, and the jury awarded $250,000 for emotional distress damages. Id. The
court found the “anger, confusion, loss of esteem, financial worry, and effect on
marital relationships . . . common consequences of an involuntary loss of
employment,” but that the evidence pertaining to his damages for emotional
distress fell “far short of supporting the exceptional verdict returned by the jury.”
Id. at 1024.
The court held that a “$250,000 award for emotional distress
damages from an unlawful termination of employment is very large, sustainable
only upon a showing of a severe degree of emotional distress.” Id. Because the
jury award for emotional distress was excessive, the defendants were entitled to
a new trial on the issue of damages. Id. The court also noted that it would be
appropriate to permit Shepard an opportunity to consent to a remittitur. Id.
In fixing the remittitur amount, the court compared Shephard, who had
been employed for four years, with the case of a disabled discharged employee,
close to retirement, who lost his job after thirty-four years and received $165,000
20
in emotional distress damages. Id. at 1025 (citing Mathieu v. Gopher News Co.,
273 F.3d 769, 783 (8th Cir. 2001)). The court also compared Shephard to a case
involving a childcare worker who was terminated from a job she had held for
three years and whose jury award for emotional distress damages was reduced
to $50,000. Id. (citing Kucia v. Southeast Ark. Cmty. Action Corp., 284 F.3d 944,
946 (8th Cir. 2002)).
The court considered that Shepard had testified that
repeated denials of employment applications over a two-year period had taken
an emotional toll, compared with the childcare worker who, unlike Shepard, was
employed in the same type of work within a year of her termination. Id. The
court concluded that “the jury could reasonably have found a significant, if not
unusually severe, emotional injury and compensated Shepard accordingly” and
held that “the maximum amount of damages for mental pain and suffering proved
by the evidence is $130,000.” Id.
In this case, the trial court reduced Jasper’s award from $100,000 to
$20,000 “both because it appears to be the result of passion or some sort of
prejudice and because it lacks evidentiary support.” It appears that length of
employment with the discharging employer, length of time before locating
another job, and likelihood of being able to replace the income and benefits lost,
are relevant to the determination of whether a verdict is substantially above a
“reasonable range supported by the evidence.” Id. at 1021. Therefore, because
Jasper was employed by the center for less than four months and because she
was employed on a full-time basis within five months of her termination, we
conclude it was not an error for the trial court to determine that the $100,000
award for emotional damages lacked evidentiary support.
21
Additionally, the trial court held that the $100,000 award appeared to be
“the result of passion or some sort of prejudice.” We find that the trial court did
not abuse its discretion in finding that the $100,000 award was excessive under
these facts. Because we affirm the trial court’s ruling that the $100,000 award
lacked evidentiary support, we need not reach the issue of whether the award
was the result of prejudice. See Tullis, 584 N.W.2d at 241 (holding the most
important of the tests used to determine whether a verdict should be set aside or
altered is support in the evidence).
There is, however, no procedure to simply reduce a jury’s award. This
Court assumes the trial court’s reduction of the award for emotional distress was
a remittitur pursuant to Iowa Rule of Civil Procedure 1.1010 without having used
that procedure. Iowa R. Civ. P. 1.1010(1) (“[t]he district court may permit a party
to avoid a new trial . . . by agreeing to such terms or conditions as it may
impose”). “The Court may conditionally grant a motion for new trial but allow
plaintiff to avoid a new trial if plaintiff agrees to remit an amount of damages as
determined by the Court.” Shepard, 303 F.Supp.2d at 1024 (citations omitted).
This court is free to impose its own conditions for granting a conditional
new trial. Mead v. Adrian, 670 N.W.2d 174, 180 (Iowa 2003). In this case,
Jasper should be allowed to avoid a trial by agreeing to accept the trial judge’s
determination of $20,000 in emotional damages.
The election to accept the
remittitur must be made within thirty days of the filing of the procedendo in the
district court.
22
B. Property Damage
Because the trial court found Jasper failed to meet her burden of proof
with regard to the public policy and causation elements of her claim, it set aside
the $39,507.25 the jury awarded for expenses and additional services. The trial
court went on to note that there is “no case law in Iowa that supports the award
of damages for property damage in a wrongful termination case . . . [Jasper]
should have pleaded her property damage claim as a separate count based on a
different theory of recovery.” We agree.
Damages must be proximately caused by the tort in order to allow
recovery.
See Albrecht v. Waterloo Const. Co., 257 N.W. 183 (Iowa 1934)
(holding defendant not liable unless negligence claimed had some causal
connection with the damages). Jasper contends that her employment contract
included the rental of the house, and the property damages she suffered flowed
directly from the wrongful termination. Given that Hussain was both Jasper’s
employer and landlord, there is no doubt there was some connection between
Jasper’s employment and her housing. However, we find the connection too
attenuated to overrule the trial court’s ruling on property damages. The wrongful
termination did not cause the property damage.
Therefore, Jasper may not
recover property damages based on her wrongful termination claim.
C. Punitive Damages
The trial court refused to submit the issue of punitive damages to the jury.
Because of its finding that the evidence did not rise to the level necessary to
establish reckless disregard, the trial judge found that Jasper had not met her
burden of proof sufficiently to establish a jury question on the issue of punitive
23
damages. Jasper asserts that a rational jury could find by a preponderance of
clear, convincing, and satisfactory evidence that the Hussains’ conduct
constituted willful and wanton disregard for her rights, and the trial court erred in
refusing to submit the issue of punitive damages to the jury.
Punitive damages are awarded “as a form of punishment and to deter
others from conduct which is sufficiently egregious to call for the remedy.”
Coster v. Crookham, 468 N.W.2d 802, 810 (Iowa 1991) (citation omitted).
Discharging an employee for refusing to staff a childcare center at a level below
the state-mandated requirements is the type of egregious conduct that supports
punitive damages. See Tullis, 584 N.W.2d at 241 (“discharging an employee for
demanding back wages is the type of egregious conduct that would support
substantial punitive damages”).
A jury could have determined by a
preponderance of clear, convincing, and satisfactory proof that Hussain
discharged Jasper in willful and wanton disregard for her employment rights.
Because punitive damages would deter future misconduct, if on remand Jasper
rejects the remittitur and a new trial is held, the jury should be instructed to
consider punitive damages.
D. Evidence From Other Centers
Additionally, the trial judge excluded evidence that Hussain owned another
daycare center that had been cited by DHS for violating children/teacher ratios,
noting it would be confusing, irrelevant to the issue the jury has to decide, and
“even if marginally relevant, . . . unduly prejudicial to the defendants.”
Jasper contends that the evidence was admissible for purposes of
showing knowledge and intent. Hussain’s alleged claim of overstaffing may be
24
rebutted by this evidence.
Similarly, the prior violations may be evidence of
motive or intent to staff his centers with employees who will violate DHS
regulations. If a new trial is held, evidence that Hussain had operated another
childcare center that was cited for violating children/teacher ratio regulations
should be admitted.
V. Individual Liability of Supervisor
Hussain contends that Jasper’s claim for retaliatory discharge in violation
of public policy should only be permitted against the employer, Kid University,
Inc., not against Mohsin Hussain as an individual supervisor. This issue was
raised in Hussain’s motion for summary judgment. 8
Raising the issue on
summary judgment, however, does not preserve the issue for appellate review.
After a full trial on the merits, a previous order denying a motion for
summary judgment is no longer appealable or reviewable. At this
point in the proceedings, the denial of the motion for summary
judgment merges with the trial on the merits . . . .
Kiesau v. Bantz, 686 N.W.2d 164, 174 (Iowa 2004) (citing Klooster v. N. Iowa
State Bank, 404 N.W.2d 564, 567 (Iowa 1987)).
Although Hussain did raise the issue in his motion for directed verdict, the
trial judge, in ruling on the motion, did not address the issue. “When a trial court
fails to rule on an issue properly raised, the party raising the issue must file a
motion asking the court for a ruling in order to preserve the issue for appeal.”
Benavides v. J.C. Penney Life Ins. Co., 539 N.W.2d 352, 356 (Iowa 1995); see
also Iowa R. Civ. P. 1.904(2).
8
The trial court found that Hussain, as a corporate officer, could be “held personally
liable for torts committed by him, whether or not the torts were committed in the scope of
his employment.”
25
It is a fundamental doctrine of appellate review that issues
must ordinarily be both raised and decided by the district court
before we will decide them on appeal . . . . When a district court
fails to rule on an issue properly raised by a party, the party who
raised the issue must file a motion requesting a ruling in order to
preserve error for appeal.
Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (citations omitted)
(emphasis added). Hussain did not request a ruling from the trial court on this
issue pursuant to rule 1.904(2) nor did he properly raise the issue by way of a
cross-appeal. Therefore, the issue is not properly before us for decision, and we
refuse to disturb the verdict against Hussain should Jasper accept the remittitur.
Should there be a new trial, the issue may be raised at that time.
VI. Conclusion
A conditional new trial is awarded and the case remanded to the district
court for further proceedings consistent with this opinion.
Jasper should be
allowed to avoid a new trial by agreeing to reduce the award for emotional
distress from $100,000 to $20,000. In the event that reduction is agreed to,
interest on the remaining award shall be computed as provided in the original
judgment. The election to accept the remittitur must be made within thirty days of
the filing of the procedendo in the district court. If a new trial is held, the jury
should be instructed on punitive damages, and evidence that Hussain had
operated another daycare center that was cited for violating children/teacher ratio
regulations should be admitted.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
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