Mary Humbeutel, Respondent, vs. Private Sector Systems, Inc., d/b/a Suburban Taxi, Relator, City of Minneapolis Commission on Civil Rights, Respondent.

This opinion will be unpublished and may

not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-99-259

 

 

Sandra Kennedy, et al.,

Appellants,

 

vs.

 

City of St. Paul, et al.,

Respondents.

 

 

Filed March 21, 2000

Affirmed in part, reversed in part, and remanded

Lansing, Judge

 

Ramsey County District Court

File No. C6938809

 

 

Carla C. Kjellberg, Richard L. Kaspari, Metcalf, Kaspari, Howard, Engdahl & Lazarus, P.A., 333 West Parkdale Plaza, 1660 South Highway 100, St. Louis Park, MN 55416-1531 (for appellants)

 

Clayton Robinson, Jr., St. Paul City Attorney, James F. X. Jerskey, Assistant City Attorney, 550 City Hall, 15 West Kellogg Boulevard, St. Paul, MN 55102 (for respondents)

 

            Considered and decided by Lansing, Presiding Judge, Davies, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N

LANSING, Judge

            This appeal, restricted to damages issues, is from a district court judgment finding the City of St. Paul and the director of its park-ranger program liable for violations of the Minnesota Human Rights Act (MHRA).  We affirm the district court's findings on past and future mental anguish and future medical expenses because they have the requisite legal and evidentiary support.  But we are unable to reconcile the disallowance of lost earnings with the court's findings on retaliation and inability to work, and therefore we reverse and remand for reconsideration.  We also reverse and remand for clarification on the calculation of attorneys' fees and for a correction in the assessment of costs.

FACTS

              The district court conducted a trial extending from October through December 1997 on allegations that the city and the director of the park-ranger program (collectively "city") failed to take timely and appropriate action to remedy a hostile work environment and retaliated against the employees who reported MHRA violations.  The hostile-environment allegations involved a male ranger's sexually offensive behavior directed at four female rangers between 1988 and 1993.  The court issued more than 30 pages of findings in support of its conclusion that the "conduct was pervasive and created an extremely intimidating and highly sexualized work environment" that constituted sexual harassment under Minnesota Statutes sections 363.03, subdivision 1(2)(c); 363.01, subdivision 10a (1988).

The court expressly found that the city willfully violated the four female rangers' rights by repeatedly ignoring the conduct and failing to take timely and remedial action to stop it.  The court also found that the city retaliated against two of the female rangers by ordering them to apologize and by refusing to promote them, in violation of Minnesota Statutes section 363.03, subdivision 7 (1988).

            The district court found the city liable for past and future mental anguish amounting to $25,000 for ranger Rita Meyer Parks and $12,500 for ranger Kathryn Mansfield and for future medical expenses of $4,000 apiece.  The court ordered $8,500 in punitive damages for each claimant, a civil penalty of $1,500, and $111,217 attorneys' fees plus costs.

            Meyer Parks and Mansfield appeal, challenging (1) the district court's failure to award lost earnings to Meyer Parks; (2) the amount awarded for mental anguish and future medical expenses; (3) the calculation of attorneys' fees; and (4) the failure to allow pretrial preparation fees for an expert witness.

D E C I S I O N

            On finding an unfair discriminatory practice in violation of the Minnesota Human Rights Act, the district court may award appropriate relief, including compensatory and punitive damages, a civil penalty to be paid to the state, and attorneys' fees and costs.  Minn. Stat. §§ 363.071, subd. 2, 363.14, subds. 2, 3 (1988).  A district court's factual findings on damages allowable under the MHRA will be upheld unless the findings are clearly erroneous or without evidentiary support.  Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 628 (Minn. 1988).  Damages must be proved by a fair preponderance of the evidence, but resolution of conflicting evidence is left to the district court.  Canada by Landy v. McCarthy, 567 N.W.2d 496, 507-08 (Minn. 1997).

I

Meyer Parks argues that the evidence does not support the district court's failure to award her any compensatory damages for lost wages.  To be recoverable, damages must not be speculative, remote, or conjectural.  Pietrzak v. Eggen, 295 N.W.2d 504, 507 (Minn. 1980); Duchene v. Wolstan, 258 N.W.2d 601, 606 (Minn. 1977).  Future loss need not be unequivocally proven, so long as it is established to a reasonable certainty by a preponderance of evidence.  Duchene, 258 N.W.2d at 606; see Riley v. Luedloff, 253 Minn. 447, 451-52, 92 N.W.2d 806, 810 (1958) (measure of damages for future loss is loss of earning capacity).

Meyer Parks worked as a park ranger from 1988 to 1993.  Until 1992, she performed patrol duties, usually working four ten-hour shifts a week.  Starting in 1992, because of a 1991 workplace injury, she worked fewer hours.  Meyer Parks earned less than she previously had and also collected worker's compensation.  She left the park-ranger program in 1993 when she started having panic attacks and similar adverse reactions to the workplace.  She received worker's compensation benefits until early 1994. 

Meyer Parks testified that before leaving her employment, she had expected to be promoted to a management position that was being created.  Her supervisor confirmed her description of the position and that the salary for the new position was likely to be equivalent to the salary for the lead park-ranger position, but indicated that the city had not made a final decision to appoint Meyer Parks.  After Meyer Parks reported the harassing conduct, she was told that she would not be promoted because the city was re-thinking management needs.

The district court specifically found that the city's reasons for not promoting Meyer Parks were not credible, that its failure to promote her constituted reprisal, that Meyer Parks was disabled from working because of the city's conduct, and that Meyer Parks would have to undergo intensive therapy before she would be able to return to work.  The district court denied Meyer Parks's request for lost wages, however, based on its conclusion that she had not met her burden of proving those damages.

We are unable to reconcile the district court's denial of compensatory damages for lost wages or earning capacity with its findings of retaliatory failure to promote and work disability caused by harassment.  At a minimum, the record establishes that Meyer Parks would have continued working for the city in some capacity had the illegal harassment and reprisal not occurred.  Flux in position or rate of pay is not an indefiniteness that prevents compensation.  We reverse and remand to allow the district court to weigh the evidence on the lost positions, hours, and rate of pay and to determine the likely wages that Meyer Parks lost because she was unable to remain with the park-ranger program. 

II

            Meyer Parks and Mansfield assert that the district court erred in two ways in assessing their past and future mental anguish and future medical expenses.  They claim that the court erred first by finding they failed to mitigate damages and, second, by improperly apportioning causation between the sexual harassment and past abuse.

            Dr. Lynn Powers, a doctor of psychology who specializes in the evaluation and treatment of abuse victims, testified that the city's conduct caused Meyer Parks and Mansfield to suffer mental anguish that amounted to post-traumatic stress disorder requiring intensive therapy for about five years.  Neither Meyer Parks nor Mansfield sought therapy before or during the trial.  Powers testified that Meyer Parks's and Mansfield's symptoms had intensified during this period, but that effective therapy could not begin until the litigation was over.

            Meyer Parks and Mansfield each testified to a prior history of abuse that had caused earlier emotional and physical problems.  Powers acknowledged that some of their current emotional problems could be ongoing symptoms of that abuse.  The district court found that the city's conduct caused Meyer Parks and Mansfield actual compensable injury.  The court also found, however, that Meyer Parks and Mansfield failed to mitigate their damages by obtaining psychological treatment earlier and that many of their symptoms or injuries pre-dated the sexual harassment.  The court concluded that a reasonable amount of damages for past and future mental anguish was $25,000 for Meyer Parks and $12,500 for Mansfield.  The court also found $4,000 to be a reasonable amount for each claimant's future medical expenses. 

            A plaintiff has a duty to mitigate damages by acting reasonably to obtain treatment for injuries.  Adee v. Evanson, 281 N.W.2d 177, 180 (Minn. 1979); Couture v. Novotny, 297 Minn. 305, 313, 211 N.W.2d 172, 176 (1973).  The mitigation-of-damages rule limits damages to those that would have been suffered if the plaintiff had acted reasonably in obtaining treatment and care.  Couture, 297 Minn. at 309, 211 N.W.2d at 174.

            Meyer Parks and Mansfield argue that because expert testimony established that effective therapy could not begin until the end of litigation, any consideration of mitigation is foreclosed.  But their expert also testified that the emotional problems worsened during litigation.  The court may accept or reject all or part of an expert's opinion.  Federal Reserve Bank v. Hennepin County, 372 N.W.2d 699, 702 (Minn. 1985) (holding expert opinions are merely advisory and court did not err by declining to adopt either expert's opinion); Flom v. Flom, 291 N.W.2d 914, 917 (Minn. 1980) (factfinder can discount testimony of expert witness); see State v. Poganksi, 257 N.W.2d 578, 581 (Minn. 1977) (factfinder may accept part and reject part of witness's testimony) (citing Kmetz v. Johnson, 261 Minn. 395, 113 N.W.2d 96 (1962)).  The district court's findings on past and future injuries and future medical costs have an adequate legal and factual basis.

Mansfield additionally contends that the court's statement that she failed to seek therapy for a lifetime of abuse shows that the court impermissibly required her to mitigate damages before they were incurred.  The court, however, did not relate that statement to mitigation.  Rather, the court's statement relates to separating past emotional conditions from the aggravation of those conditions or new problems.  Cf. Anderson, 417 N.W.2d at 627 (compensatory damages should restore victim to circumstances that would have been absent discrimination).  Based on the record, we cannot conclude that this was clear error.

Meyer Parks and Mansfield's second argument is that allowing compensation only for aggravation or new injuries ignores the egg-shell-skull rule that defendants take their plaintiffs as they find them, or, put another way, that foreseeability is not an element of proximate cause.  See Dellwo v. Pearson, 259 Minn. 452, 454-55, 107 N.W.2d 859, 861 (1961).  We disagree.  If the city's conduct aggravated pre-existing emotional problems, damages are limited to results over and above those that normally would have followed from the pre-existing condition had there been no sexual harassment.  See Leubner v. Sterner, 493 N.W.2d 119, 122 (Minn. 1992); Schore v. Mueller, 186 N.W.2d 699, 701 (Minn. 1971); cf. Jenson v. Eveleth Taconite Co., 130 F.3d 1287, 1294 (8th Cir.) (declining to address aggravation of prior injury when special master found no pre-existing condition), cert. denied by Oglebay Norton Co. v. Jenson, 118 S. Ct. 2370 (1997).

We also reject Meyer Parks and Mansfield's argument that the district court improperly engaged in apportionment.  We see no indication that the court attempted to apportion causation between the sexual harassment and previous abuse that Meyer Parks and Mansfield suffered.  See Mathews v. Mills, 288 Minn. 16, 20-23, 178 N.W.2d 841, 844-45 (1970) (apportionment of causation possible when two or more independent torts are "closely related in point of time").  To the extent that the court's findings on damages separated Meyer Parks's and Mansfield's psychological problems and symptoms that predated the harassment from those caused by the harassment, such an apportionment is not improper.  Cf. Canada, 567 N.W.2d at 508 (treating limitation of damages for aggravation as "apportionment").

III

            We review attorneys' fees awards under the MHRA for abuse of discretion. See Gillson v. State, Dep't of Natural Resources, 492 N.W.2d 835, 843 (Minn. App. 1992) (citing Anderson, 417 N.W.2d at 630), review denied (Minn. Jan. 28, 1993).  The city argued that Meyer Parks and Mansfield's attorneys' submitted hours were duplicative, excessive, and that the explanatory entries were vague.  The district court awarded $111,217 in attorneys' fees, about 40 percent of the amount that Meyer Parks and Mansfield requested.

Minnesota has adopted the federal lodestar analysis for calculation of attorneys' fees.  Anderson, 417 N.W.2d at 628 (citing Hensley v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933 (1983)).  The district court first calculates the lodestar figure by multiplying the reasonable hours expended by a reasonable hourly rate.  Hensley, 461 U.S. at 433, 103 S. Ct. at 1939.  The court must exclude from the calculation any hours not reasonably expended.  Id. at 434, 103 S. Ct. at 1939; Anderson, 417 N.W.2d at 629.  The court must then determine whether there are other factors justifying an upward or downward departure from the lodestar figure, such as what results are obtained.  Hensley, 461 U.S. at 434, 103 S. Ct. at 1940.  The "results-obtained" factor is particularly significant when a plaintiff succeeds only on a portion of her claims.  Id.  In those cases, the court should reduce the lodestar figure to account for time spent on unrelated, unsuccessful claims.  Hensley, 461 U.S. at 435, 103 S. Ct. at 1940 (court should "focus on the significance of the overall relief obtained * * * in relation to the hours reasonably expended on the litigation"); see also Ryther v. KARE 11, 864 F. Supp. 1525, 1532-33 (D. Minn. 1994) (holding plaintiff could not recover for hours devoted to unsuccessful and unrelated defamation claim but could recover for unsuccessful reprisal claim, in part because of common core of facts).

The district court applied the Hensley analysis and made two reductions to the requested amount of fees.  The court first reduced the hours reasonably expended from 1,515.75 to 1,006.9, based on vague entries, duplication of attorney tasks, and excessive fees for some tasks.  Using the reduced figure, the court calculated a lodestar figure of $158,881.50.  The court further reduced the lodestar figure by 30 percent for accounting deficiencies and the results obtained.  We find no legal error in the court's method of applying the Hensley formula.  See Hensley, 461 U.S. at 436-37, 103 S. Ct. at 1941 (district court may eliminate specific hours or reduce award to account for limited success). 

            A court may not, however, make duplicative reductions.  See Blum v. Stenson 465 U.S. 886, 898-900, 104 S. Ct. 1541 1548-49 (1984) (reversing upward departure from lodestar figure because reasons for departure already reflected in hours expended and hourly rate).  We are unable to determine whether the court's reduction for "accounting deficiencies" duplicates the reduction the court made for the hours claimed because of "vague entries."  We conclude that the two reductions may be duplicative. 

The district court also reduced the lodestar figure for results obtained because the court concluded that Meyer Parks and Mansfield's settlement demand before trial was so high that it required respondents to try the case.  We note at the outset that the court failed to consider the city's corresponding failure to make a reasonable offer to settle.  We need not determine, however, whether the court's finding on the claimants' purported failure to settle was properly based on the evidence because, under the Hensley analysis, the reasonableness of a party's conduct during settlement negotiations is not a proper factor.  We find no authority in Hensley or any other case for considering a failure-to-settle factor.

Minnesota procedural rules generally prohibit courts from considering evidence of settlement negotiations.  See Minn. R. Gen. Pract. 114.08 (prohibiting consideration of evidence from ADR proceedings); Minn. R. Evid. 408 (prohibiting admission of evidence on offers to settle).  We recognize an exception to this general rule of inadmissibility in calculating costs under Minnesota Rule of Civil Procedure 68 (precluding party from recovering costs if the judgment obtained is less favorable than pretrial judgment offer).  Rule 68 applies only in specific procedural circumstances, however, and neither party suggests that it applies in this case.  Thus, the general rule of inadmissibility prevents consideration of settlement demands.  See Minn. R. Civ. P. 68 (refusal to accept an offer of judgment is inadmissible except under the procedures of rule).

            Because the court may have made duplicative reductions in the attorneys' fees requests and because the court reduced the fees and penalized the claimants for the alleged failure to make a reasonable settlement demand, we reverse the attorneys' fees award and remand to the district court for reconsideration. 

IV

The district court, citing Minnesota Rule of General Practice 127, limited Meyer Parks and Mansfield's expert's fees to the time their psychological expert spent testifying in court, disallowing fees for preparation outside the courtroom.  Rule 127 does prohibit allowance of fees for an expert's pretrial preparation, but that rule limits the costs that can be assessed by the court administrator, not the costs that may be awarded by the court.   Minnesota Statutes section 357.25 (1998) specifically allows the court to allow expert's fees "as may be just and reasonable."  See Quade & Sons Refrigeration, Inc. v. Minnesota Mining & Mfg. Co., 510 N.W.2d 256, 260-61 (Minn. App. 1994) (affirming allowance of fees for pretrial preparation of expert), review denied (Minn. Mar. 15, 1994); Stinson v. Clark Equip. Co., 473 N.W.2d 333, 337 (Minn. App. 1991) (same), review denied (Minn. Sept. 13, 1991). 

            The city argues that the MHRA does not permit private plaintiffs to recover expert fees.  We reject this argument for the same reasons stated by the district court:  The section covering private plaintiffs provides that a district court may, in its discretion, award to the prevailing party "a reasonable attorney's fee as part of the costs."  Minn. Stat. § 363.14, subd. 3 (1988) (emphasis added).  This language evidences a legislative intent that MHRA plaintiffs be entitled to recover statutorily authorized costs in the same manner as plaintiffs in other civil actions. 

We reverse the court's refusal to allow fees for pretrial preparation and remand for the district court to determine what costs would be just and reasonable. 

Affirmed in part, reversed in part, and remanded.