REBECCA MCCARTHY VS. CARE ONE MANAGEMENT, LLC (L-8657-16, BERGEN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2542-19
REBECCA MCCARTHY,
Plaintiff-Respondent,
v.
CARE ONE MANAGEMENT,
LLC, and ALISON
FITZPATRICK-DURSKI,
Defendants-Appellants.
___________________________
Argued May 10, 2021 – Decided July 12, 2021
Before Judges Rothstadt and Mayer.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-8657-16.
Bruce H. Nagel and Thomas P. Scrivo argued the cause
for appellants (Nagel Rice, LLP, Fisher & Phillips,
LLP, and O'Toole Scrivo, LLC, attorneys; Bruce H.
Nagel, Robert H. Solomon, Brian Gershengorn, and
Christopher J. Capone, of counsel and on the briefs;
Thomas P. Scrivo, on the brief).
Paul Castronovo and Thomas A. McKinney argued the
cause for respondent (Castronovo & McKinney, LLC,
attorneys; Thomas A. McKinney, Paul Castronovo, and
Edward W. Schroll, of counsel and on the brief).
PER CURIAM
A jury found that defendant Care One Management, LLC (Care One) and
one of its managers, defendant Alison Fitzpatrick-Durski, violated the New
Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and it
awarded plaintiff Rebecca McCarthy compensatory and punitive damages.1 The
trial court also awarded counsel fees. The total judgment entered against
defendants approximated six million dollars.
Defendants appeal from the judgment entered on the verdicts and argue
the award of punitive damages must be vacated for several reasons, including
the insufficiency of the evidence of liability or damages; the verdict was the
result of the jury's confusion or mistake; and the trial court erred by denying
their motions for directed verdicts or judgment notwithstanding the verdict
(JNOV) or for a new trial and by awarding counsel fees. For the reasons that
follow, we affirm the award of compensatory damages, but vacate the award of
punitive damages and counsel fees and remand for a new trial on punitive
damages only and reconsideration of the counsel fee award.
1
Plaintiff only sought and recovered punitive damages from Care One, not
Fitzpatrick-Durski.
A-2542-19
2
I.
The facts developed at trial leading to Care One's termination of plaintiff's
employment are summarized as follows. Plaintiff, a Black woman, holds a
Master of Science degree in nursing, is a registered nurse, a board-certified
geriatric nurse, a certified director of nursing, and a certified resident assessment
coordinator. At the time of trial, she had worked in the nursing field for twenty-
three years and served as a nursing director at several facilities . She testified
that before Care One terminated her, she planned to work for "something like"
ten more years and expected to earn no less than $222,000 annually.
In her complaint, plaintiff alleged that Care One terminated her
employment on the basis of her race in violation of the LAD and that Fitzpatrick-
Durski aided and abetted Care One's unlawful discrimination. The allegations
supporting plaintiff's complaint arose from her employment with Care One in
2016, initially as a Clinical Services Coordinator, and then two months later,
after a quick promotion, as a Vice President of Clinical Leadership. Her last
salary at Care One was $190,000, with the potential for up to $32,000 in
bonuses. Plaintiff remained employed at Care One until November 1, 2016,
when she was fired by Fitzpatrick-Durski, who is Caucasian.
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Following her promotion, Care One asked plaintiff to lead the
interdisciplinary clinical team at its Somerset Valley facility (SV), a senior
living facility that offered assisted living and skilled care and which was not
performing well. It assigned plaintiff to help improve customer service and
patient count, and to reduce staff turnover. Her direct supervisors were
Executive Vice President Elizabeth Straus and Alberto Lugo, who served as
Executive Vice President and General Counsel.
In order to address SV's deficiencies, plaintiff intended to develop a
program for improvement after she analyzed "what was going on" there. She
described the process as "ongoing," and that she continued to assess the situation
during her ten-week tenure at SV.
During plaintiff's tenure, she was not disciplined or given notice about any
deficiencies in her job performance. According to Matthew Schottlander, SV's
administrator, he was satisfied with her performance as she improved overall
customer satisfaction, increased the number of patients, and reduced the
facility's dependence on nursing staff. According to Guirlande Valcin, the
Assistant Director of Nursing, plaintiff "was great" at her job and was "hands-
on" in treating patients and addressing problems. In mid-September 2016,
Straus sent plaintiff a text message that stated: "Thank you so much for
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everything!!!! You have made such a difference and I am so happy you trusted
me and decided to stay with us!! [T]hank you for everything!"
Plaintiff's success was also verified at an October 6, 2016 review by
managers of SV's progress. The review concluded that SV's condition improved
since plaintiff's promotion. Straus and Lugo praised plaintiff for her work.
According to Schottlander, both Straus and Care One's Chief Strategy Officer
Timothy Hodges were satisfied with plaintiff's job performance and "happy that
clinically things were heading in the right direction."
Despite those accolades, one day after Fitzpatrick-Durski began her
assignment at SV, she fired plaintiff. Fitzpatrick-Durski began working at SV
on or around October 31, 2016, and served as Interim Administrator, responsible
for enforcing Care One's anti-discrimination policy, and had the authority to hire
and fire employees. She first met plaintiff when she attended the October 6
performance review.
On October 31, 2016, Fitzpatrick-Durski and plaintiff had a conversation
during which no one else was present. According to plaintiff, Fitzpatrick-Durski
asked "[i]n a very demeaning way," whether plaintiff planned on accepting a
demotion by resuming plaintiff's former position or some other subordinate
position. Plaintiff did not respond and Fitzpatrick-Durski continued by stating
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"I don't want a black person walking around here in a suit as a VP. I want you
in scrubs, flats, and a lab coat." Plaintiff asked Fitzpatrick-Durski whether the
conversation was over, and then left the room.
Plaintiff did not report the incident to Care One's human resource
department even though plaintiff was aware of and received training about Care
One's anti-discrimination policy that required her to report discriminatory
conduct to human resources, which she could have done anonymously. She
explained that she believed Fitzpatrick-Durski was only at SV temporarily, and
she did not want to start "causing waves." In addition, plaintiff had recently
applied for another promotion and hoped to grow with the company.
Fitzpatrick-Durski, who was also trained on Care One's anti-
discrimination policies and procedures, had a different view of what transpired
between her and plaintiff. According to Fitzpatrick-Durski, she spoke to
plaintiff about a backlog in paperwork at SV, and then told plaintiff that she
should perform patient care if she was unwilling to address that backlog .
Specifically, Fitzpatrick-Durski said, "[I]f you don't want to do that, maybe you
can come in in scrubs and do the treatments and be hands-on care." Fitzpatrick-
Durski explained that she wanted plaintiff to wear scrubs because staff felt less
intimidated when senior leadership members did not wear business attire.
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According to Fitzpatrick-Durski, plaintiff did not alleviate all of SV's
issues. In mid-October 2016, before Fitzpatrick-Durski arrived at SV, Straus
and Lugo allegedly informed Kimberly Komoroski, a Clinical Services
Coordinator who was in charge of five other Care One facilities, that SV had
"clinical issues," in that physicians, staff, families, and residents were all
unhappy with the conditions there. According to Komoroski, who is Caucasian,
Straus and Lugo asked her whether she would add SV to the facilities she
oversaw. When she eventually took over for plaintiff, Komoroski discovered
that accident and incident reports, patient care plans and patient grievances were
not only backlogged but were never even investigated.
According to Fitzpatrick-Durski, plaintiff failed to address the problems
at SV that she was assigned to remedy, explaining that the facility had months
of backlogs for grievance, accident, and incident reports, and that plaintiff was
unable to address even the recent reports, let alone the older ones. She stated
that plaintiff was unable to present any plan to her regarding either the backlog
or resident care and safety. However, she, Komoroski, and the rest of the
interdisciplinary team were able to "address[] everything" and eliminate the
backlog in approximately one week.
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Prior to firing plaintiff, Fitzpatrick-Durski informed Lugo, Vice President
of Human Resources Maureen Montegari, and Jean Joseph, the Regional
Director of Operations, that she decided to terminate plaintiff's employment.
Thereafter, at a meeting attended by Montegari and Byron Wilson, Fitzpatrick-
Durski's Administrator-in-Training, she presented plaintiff with a termination
letter that noted "[r]ecent examples of poor performance," including "failure to
(i) hold staff accountable for performance issues; (ii) identify and remedy
operational and staffing issues impacting resident care; and (iii) follow through
on expectations identified by senior management, e.g., incident/accident reports
and outstanding grievances." Afterward, on November 5, 2016, Komoroski
began performing the same duties at SV as plaintiff, although it was not clear
whether Care One "replaced" plaintiff with Komoroski or merely asked
Komoroski to add plaintiff's former duties to her own.
Fitzpatrick-Durski acknowledged that plaintiff's alleged performance
deficiencies were part of a team effort, but no other members of the team were
fired or disciplined and that the company did not fire or discipline the employee
who was responsible for responding to customer grievances, nor the employees
who were responsible for accident and incident reports. According to
Fitzpatrick-Durski, Schottlander struggled in performing his duties of
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overseeing the SV facility and failed to make progress. She did not have the
authority to fire him, but she, along with his immediate supervisor, arranged for
Schottlander's demotion and transfer.
According to Valcin, who is Black, Fitzpatrick-Durski "was not
comfortable talking to" her and would "go around" her to consult with a
Caucasian coworker, though she denied that Fitzpatrick-Durski treated her
differently because of her race. However, shortly after Fitzpatrick-Durski fired
plaintiff, she heard Fitzpatrick-Durski refer to her administrative assistant
Wilson, who is also Black, saying "this is my slave." According to Valcin, only
she, Fitzpatrick-Durski and Wilson were present for that conversation. Valcin
did not respond to Fitzpatrick-Durski or report the incident. Valcin later
resigned to take another job after learning that Care One sought to replace her
and posted an opening for her position.
Fitzpatrick-Durski denied that she made the comment to Wilson. Wilson
also denied that Fitzpatrick-Durski ever called him a "slave." According to
Fitzpatrick-Durski, she assigned Wilson to be her administrator-in-training and
that she mentored him for the role, which required 1,750 hours of mentorship.
Fitzpatrick-Durski also explained that there were four employees whom
she hired or promoted who reported directly to her and were Black, Puerto
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Rican, Korean or Filipino, and none ever complained to her about racially
insensitive comments she made. In addition, Toya Casper Cornelius, Care One's
Chief Clinical Officer, knew that Fitzpatrick-Durski promoted several Black
employees during her time with Care One, and that no employees ever told
Cornelius that Fitzpatrick-Durski made racially derogatory comments.
After her termination, plaintiff made numerous unsuccessful efforts to
seek employment. She never found the same type of employment or income
level. Eventually, she began consulting and teaching, earning approximately
$129,000 in 2017 and $55,000 from consulting in 2018.
On December 9, 2016, plaintiff filed her complaint. The trial began on
October 21, 2019. After plaintiff rested, defendants moved for involuntary
dismissal of her punitive damages claim, which the court denied. After
defendants rested and the parties presented their closing arguments, defendants
moved for judgment under Rule 4:40-1 and to dismiss plaintiff's demand for
economic damages based upon her alleged failure to mitigate. The court denied
both motions.
On October 30, 2019, the jury returned a verdict in plaintiff's favor in the
amount of $1,872,630 as compensatory damages. Defendants renewed their
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motion to dismiss plaintiff's demand for punitive damages, which the court again
denied.
The jury then considered plaintiff's claim for punitive damages on
November 1, 2019, before awarding her $4,127,370 in punitive damages. On
November 21, 2019, defendants moved for JNOV or, in the alternative, for a
new trial, which the court denied.
On January 14, 2020, the trial court entered a final judgment, in
accordance with the jury's findings, awarding plaintiff $455,350 against both
defendants for past lost earnings; $1,412,280 against both defendants for future
lost earnings; $5,000 against both defendants for emotional distress; $4,127,370
against Care One in punitive damages; $410,980 in attorneys' fees; $22,815 in
additional fees for opposing defendants' trial motions; $6,905 in pre-judgment
interest at a 0.5% rate; and $88.50 per day in post-judgment interest at a 0.5%
rate. This appeal followed.
II.
A.
We begin our review by considering defendants' challenges to the jury's
verdict on liability and compensatory damages. The challenges that defendants
raised before the trial court were contained in their motions for directed verdicts
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under Rule 4:37-2(b), motions for judgments under Rule 4:40-1 and for
judgment notwithstanding the verdict (JNOV) under Rule 4:40-2. Rule 4:37-
2(b) allows the defendant to move for dismissal of the action or any claim after
the plaintiff rests and "shall be denied if the evidence, together with the
legitimate inferences therefrom, could sustain a judgment in [the] plaintiff's
favor." The standards under that rule and Rule 4:40-2 for JNOV are identical.
Velazquez v. Jiminez, 336 N.J. Super. 10, 30 (App. Div. 2000).
Motions under Rule 4:37-2(b) and Rule 4:40 require the court to deny the
motions if reasonable minds could differ after "accepting as true all the evidence
which supports the position of the party defending against the motion and
according him the benefit of all inferences which can be reasonably and
legitimately deduced therefrom . . . ." Smith v. Millville Rescue Squad, 225 N.J.
373, 397 (2016) (quoting Verdicchio v. Ricca, 179 N.J. 1, 30 (2004)). The court
should only grant the motions where no rational juror could find that the plaintiff
made a prima facie case of the cause of action. Ibid. We review de novo a trial
court's decision on these motions, applying the same standard as the trial court.
Ibid.A-2542-19
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B.
After the jury returned its verdict, the court denied defendants' motion for
JNOV or for a new trial because it concluded the record contained sufficient
evidence for a jury to find that Fitzpatrick-Durski acted with malice.
Specifically, it found that Fitzpatrick-Durski terminated plaintiff by utilizing the
"contrived basis" of poor performance in order to cover up for her racist remarks.
Defendants contend that the court erred in denying their motion for JNOV
or a new trial because plaintiff admitted Fitzpatrick-Durski was not a racist who
fired her with a discriminatory motive, and plaintiff's theory that Fitzpatrick-
Durski fired plaintiff to protect her own job after making a racially insensitive
remark had no support in the record. They also contend that plaintiff's admission
demonstrates that Fitzpatrick-Durski's stated reason for terminating plaintiff--
plaintiff's alleged poor job performance--was not a pretext for Fitzpatrick-
Durski's discriminatory intent.
In his closing argument, plaintiff's counsel outlined plaintiff's theory that
Fitzpatrick-Durski terminated plaintiff's employment in order to protect her own
job after plaintiff took offense to Fitzpatrick-Durski's racist remarks. Counsel
stated:
This comment is made, there's a reaction, and
[Fitzpatrick-Durski], to protect her job, terminates
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[plaintiff] the next day. And that's what gets you to race
discrimination. Because that, when you look at it, is
based on race. If [plaintiff] was not a black woman . . .
[t]hat comment's [sic] never going to happen . . . And
[Fitzpatrick-Durski] is never going to terminate her for
it. . . .
This isn't a case where we're saying that [Fitzpatrick-
Durski is] a racist. We've never said that. We don't
have to prove that. We have to prove that [plaintiff]
was terminated because of her race. That that was
something that motivated it. There's no doubt that she
has friends that are black, but we're not claiming that in
any way.
But she makes bizarre comments. Very bizarre
comments. . . .
Counsel went on to state that Fitzpatrick-Durski terminated plaintiff's
employment the day after the alleged remarks because Fitzpatrick-Durski
"needed to protect herself. She needed to protect her job because she was scared
of what [plaintiff] might do."
Later, the trial court denied defendants' motion because plaintiff
demonstrated by a preponderance of evidence that defendants terminated her
based on race, she was a member of a protected class, defendants never
complained about her performance, and they replaced her with a Caucasian
woman. The court held that plaintiff presented sufficient evidence to show
defendants' claim that they terminated her for poor performance was pretextual,
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as she presented evidence that the facility improved under her leadership,
defendants presented no documentary evidence to support that she performed
poorly, and plaintiff presented proofs that Fitzpatrick-Durski made racially
insensitive remarks. The court noted that the matter hinged on credibility, and
the jury made a credibility determination in plaintiff's favor.
The trial court's analysis was consistent with the framework set forth in
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973), as adopted in
New Jersey, for determining whether members of protected classes were subject
to unlawful discrimination under the LAD. Gerety v. Atl. City Hilton Casino
Resort, 184 N.J. 391, 399 (2005). Under that framework, a plaintiff satisfies her
burden of establishing a prima facie case of unlawful discrimination by proving
that she is a member of a protected class, she performed her job at a level that
met her employer's legitimate expectations, her employer terminated her, and
the employer subsequently hired someone else to perform the same work.
DeWees v. RCN Corp., 380 N.J. Super. 511, 523 (App. Div. 2005).
The defendant then must produce a legitimate, nondiscriminatory reason
for the adverse employment action, after which the plaintiff must prove that the
reason was a pretext for discrimination, rather than the true reason for the
termination. Id. at 523-24. "To prove pretext . . . a plaintiff must do more than
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simply show that the employer's reason was false; he or she must also
demonstrate that the employer was motivated by discriminatory intent." Visick
v. Fowler Equip. Co., 173 N.J. 1, 14 (2002).
The plaintiff need not provide direct evidence, but "must demonstrate such
weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions
in the employer's proffered legitimate reasons for its action that a reasonable
factfinder could rationally find them 'unworthy of credence,' and hence infer
'that the employer did not act for [the asserted] non-discriminatory reasons.'"
Kolb v. Burns, 320 N.J. Super. 467, 478 (App. Div. 1999) (alteration in original)
(quoting Fuentes v. Perksie, 32 F.3d 759, 765 (3d Cir. 1994)). "The burden of
proof . . . remains with the employee at all times." Zive v. Stanley Roberts, Inc.,
182 N.J. 436, 450 (2005).
Here, the trial court appropriately noted that plaintiff's case depended
primarily on witness credibility, and correctly stated that its mission in ruling
on the motions was not to weigh the evidence or determine credibility, but to
determine whether reasonable minds could differ after accepting as true all
evidence that supports plaintiff's position. See, e.g., Baxter v. Fairmont Food
Co., 74 N.J. 588, 597-98 (1977) (a court should not substitute its judgment for
that of jury on motion for new trial but act only to correct jury's clear error or
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mistake); Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969) (a court's function on
motion for JNOV is "quite a mechanical one," as a court denies motion if
reasonable minds could differ); Alves v. Rosenberg, 400 N.J. Super. 553, 565-
66 (App. Div. 2008) (a court should ordinarily deny motions under Rule 4:40
when material facts rest upon credibility).
The outcome of the matter hinged upon witness credibility as the parties'
witnesses often gave sharply opposing testimony, particularly plaintiff and
Fitzpatrick-Durski, about the critical issue of Fitzpatrick-Durski's racist
comments. The jury determined that the evidence was in plaintiff's favor, and
the court appropriately found that there was sufficient evidence for a reasonable
jury to find in her favor and for its verdict not to constitute a miscarriage of
justice.
We agree that the record contains sufficient evidence of defendants'
unlawful discrimination that was needed for plaintiff to establish a prima facie
case. She was a Black woman whom defendants terminated, and there was
evidence in the record that they replaced her with Komoroski, a Caucasian
woman. The record also contains substantial evidence that plaintiff performed
her duties in a manner that met defendants' reasonable expectations.
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While Fitzpatrick-Durski testified that she terminated plaintiff for the
legitimate, nondiscriminatory reason of poor performance, the record strongly
suggests that this reason was pretextual and that Fitzpatrick-Durski's actual
motivation was discriminatory. The record contains testimony that Fitzpatrick -
Durski made racist statements to plaintiff and Wilson, that Fitzpatrick -Durski
was uncomfortable around Valcin and avoided speaking with her, and that
Fitzpatrick-Durski wanted plaintiff to wear scrubs. 2 In addition, Fitzpatrick-
2
Recently, our Supreme Court addressed a hostile work environment claim
under the LAD where a supervisor made two racist comments about Hispanics.
Responding to arguments that the two comments were insufficient to support the
Hispanic employee's claim, the Court stated the following:
[The defendant's] position as a supervisor compounded
the severity of the alleged remarks. [The Court
previously] emphasized the overarching
responsibilities of a supervisor to prevent and put an
end to racial harassment in the workplace. . . . Direct
supervisors also routinely work closely with employees
they supervise and evaluate their performance. In that
and other ways, a person's direct supervisor often has a
say in the individual's future with the organization --
even if the supervisor is not a top-ranking official.
Here, [defendant] had interviewed [plaintiff] for his
position with the company only weeks before the
alleged comments were made.
Under those circumstances, comments like the ones
alleged, viewed from the perspective of a reasonable
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Durski fired plaintiff the day after she made the racist remarks, and plaintiff was
the only one on the SV team who was terminated or even disciplined. Further,
defendants produced no documentary evidence of plaintiff's alleged poor
performance.
Defendants argue that plaintiff's counsel's statement in summation that he
"never said" "that [Fitzpatrick-Durski is] a racist" proves that Fitzpatrick-Durski
did not terminate plaintiff due to a discriminatory motive. However, this
argument takes the summation out of context--counsel argued that plaintiff was
not required to prove that Fitzpatrick-Durski harbors deep-seated racial animus
to prove that Fitzpatrick-Durski terminated plaintiff because of her race.
Further, regardless of the attorney's statement, the record contained sufficient
evidence for the jury to find that plaintiff satisfied her burden. On this basis,
defendants' motions were properly denied.
C.
Next, defendants contend that the judgment against Fitzpatrick-Durski
must be vacated because plaintiff's complaint alleged that she aided and abetted
Hispanic employee, could taint every interaction that
followed between an employee and a direct supervisor.
[Rios v. Meda Pharm., Inc., __ N.J. __, __ (2021) (slip
op. at 17).]
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Care One as defined under the LAD, but there was no underlying LAD violation
for anyone to aid or abet. The trial court denied defendants' motion for JNOV
because plaintiff presented sufficient evidence for a rational jury to find not only
that defendants committed an LAD violation, but that the conduct was
sufficiently egregious and malicious to sustain a punitive damages verdict. We
find no error in the trial court's determination.
Under N.J.S.A. 10:5-12(e) it is unlawful discrimination "[f]or any person,
whether an employer or an employee or not, to aid, abet, incite, compel or coerce
the doing of any of the acts forbidden under [the LAD], or to attempt to do so."
"New Jersey courts have held that an individual can aid and abet, not only the
conduct of another person, but that person's own conduct. That implies the
availability of personal liability for a violation of the [LAD]." DeSantis v. N.J.
Transit, 103 F. Supp. 3d 583, 591 (D.N.J. 2015) (citing Cicchetti v. Morris Cnty.
Sheriff's Office, 194 N.J. 563, 594 (2008)).
[I]n order to hold an employee liable as an aider or
abettor, a plaintiff must show that "(1) the party whom
the defendant aids must perform a wrongful act that
causes an injury; (2) the defendant must be generally
aware of [her] role as part of an overall illegal or
tortious activity at the time that [she] provides the
assistance; [and] (3) the defendant must knowingly and
substantially assist the principal violation."
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[Tarr v. Ciasulli, 181 N.J. 70, 84 (2004) (quoting
Hurley v. Atl. City Police Dep't, 174 F.3d 95, 127 (3d
Cir. 1999)).]
When determining whether a defendant substantially assisted the principal
violator under the third prong, a court should consider: "(1) the nature of the
act encouraged, (2) the amount of assistance given by the supervisor, (3) whether
the supervisor was present at the time of the asserted harassment, (4) the
supervisor's relations to the others, and (5) the state of mind of the supervisor ."
Ibid.In Cicchetti, the Court explained that "individual liability of a supervisor
for acts of discrimination or for creating or maintaining a hostile environment
can only arise through the 'aiding and abetting' mechanism that applies to 'any
person.'" 194 N.J. at 594 (emphasis added) (quoting N.J.S.A. 10:5-12(e)).
Applying the three prongs from Tarr, first, the record contains evidence
that Care One, the party that Fitzpatrick-Durski aided through her conduct,
performed a wrongful act--firing plaintiff on the basis of her race. That
Fitzpatrick-Durski herself fired plaintiff does not relieve her from personal
liability under the aiding or abetting theory. To the contrary, that she personally
carried out the adverse employment action is precisely the reason she can be
held liable under the LAD's aiding and abetting mechanism. Ibid. Second, she
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was aware that she was part of the illegal or tortious activity, in that she
unlawfully terminated plaintiff to avoid negative consequences for making racist
statements.
Finally, the record also contains evidence that she knowingly and
substantially assisted the violation in that she was trained on the company's
policy, made the offensive statements, and then decided to fire plaintiff, giving
rise to the LAD violation. Under this prong, the "amount of assistance given by
the supervisor," and "whether the supervisor was present" are factors that clearly
establish Fitzpatrick-Durski substantially assisted in the violation. Again, she
was the one who committed the violation. Accordingly, the record contains
sufficient evidence that Fitzpatrick-Durski qualified as an aider or abettor.
D.
We turn our attention to defendants' arguments about the sufficiency of
plaintiff's proofs about her compensatory damages. According to defendants,
the trial court erred by denying their motions to dismiss plaintiff's demand for
economic damages and for JNOV because she failed to demonstrate a continuing
effort to obtain substantially equivalent employment. They also contend that
she was not entitled to back pay and that she failed to provide evidence of her
2019 income. As to the front pay award, defendants argue that the jury awarded
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more than she requested based upon speculative evidence and the award amount
demonstrated that the jury was mistaken or confused. We find no merit to these
contentions.
After the parties rested, and before the jury returned its verdict, the trial
court denied defendants' motion to dismiss plaintiff's demand for economic
damages because the record contained sufficient efforts by plaintiff to mitigate
damages for the jury to consider the issue. The court later denied defendants'
motions for JNOV, or for a new trial, for the same reason. The court noted that
defendants had the burden of demonstrating that plaintiff's mitigation efforts
were inadequate, and they relied only on their cross-examination of plaintiff and
brief testimony of Cornelius regarding available positions, rather than expert
testimony. The court denied defendants' motion because plaintiff presented
sufficient evidence of her lost income and inability to earn a similar income to
sustain her burden. We agree with the trial court.
A defendant in an employment discrimination case bears the burden of
proof as to whether the plaintiff satisfied her duty to mitigate past losses, such
as back pay. Quinlan v. Curtiss-Wright Corp., 425 N.J. Super. 335, 360-62
(App. Div. 2012). While "[m]itigation depends upon the facts of the case,"
relevant factors include whether jobs are available, whether the plaintiff "made
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a reasonable and diligent effort to obtain" employment, and the nature of the
other jobs available. Goodman v. London Metals Exch., Inc., 86 N.J. 19, 36-37
(1981).
Here, the record reflects that plaintiff applied for jobs in the healthcare
field after defendants fired her, worked with recruiters, posted her resume on
job sites, and had "always worked" since she was terminated. Defendants
correctly note that she did not apply for director of nursing positions and that
Cornelius testified that the job market for such positions was good. However,
because the record does not contain the salaries for the positions that plaintiff
applied for, defendants did not demonstrate that she applied for positions that
offered less income than that which she earned with them or less than she would
have earned as a director of nursing. The evidence of plaintiff's efforts to
mitigate, together with the legitimate inferences therefrom, were sufficient to
sustain a judgment in plaintiff's favor.
So too was the evidence about back pay, which defendants challenged in
their Rule 4:49-1(a) motion for a new trial. Such motions are granted only if the
record clearly and convincingly establishes a miscarriage of justice under the
law. "[T]he evaluation of damages is a matter uniquely reposed in the jury's
good judgment and to justify judicial interference, the verdict must be wide of
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the mark and pervaded by a sense of wrongness." Ogborne v. Mercer Cemetery
Corp., 197 N.J. 448, 463 (2009) (quoting Jastram ex rel. Jastram v. Kruse, 197
N.J. 216, 229 (2008)). "[A] 'miscarriage of justice' can arise when there is a
'manifest lack of inherently credible evidence to support the finding,' when there
has been an 'obvious overlooking or under-valuation of crucial evidence,' or
when the case culminates in a 'clearly unjust result.'" Hayes v. Delamotte, 231
N.J. 373, 386 (2018) (quoting Risko v. Thompson Mueller Auto. Grp., Inc., 206
N.J. 506, 521-22 (2011)).
Under Rule 2:10-1, the issue of whether a jury verdict was against the
weight of the evidence is cognizable on appeal where the appellant moved in the
trial court for a new trial, and "[t]he trial court's ruling . . . shall not be reversed
unless it clearly appears that there was a miscarriage of justice under the law."
In reviewing these determinations, we apply the same standard as the trial court,
Hayes, 231 N.J. at 386, and never "disturb the findings of the jury merely
because [we] would have found otherwise upon review of the same evidence."
Delvecchio v. Twp. of Bridgewater, 224 N.J. 559, 572 (2016).
A plaintiff in an LAD case bears the burden of demonstrating her
entitlement to both back pay and front pay. Quinlan, 425 N.J. Super. at 360-63.
With regard to front pay, she must "prove what she would have earned had she
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not suffered the wrong[,] . . . how long she would have continued to receive
those earnings, and a reasonable likelihood that she will not be able to earn that
amount in the future, such as through alternative employment." Id. at 364.
"Back pay is awarded to make the discriminatee whole by reimbursing the
economic loss suffered because of the discrimination." Grasso v. W. N.Y. Bd.
of Educ., 364 N.J. Super. 109, 121 (App. Div. 2003) (citing Goodman, 86 N.J.
at 34-35). Its purpose is to compensate plaintiffs at the employment status they
would have achieved without the unlawful discrimination, and the award must
be based on a reasonable method of calculation, as opposed to mathematical
certainty. Ibid.Here, the jury's award of $455,350 in back pay aligns with a reasonable
method of calculation to reimburse plaintiff for her economic loss. Defendants
terminated plaintiff almost exactly three years before the jury returned its
verdict. If plaintiff had continued to work for three years and earn her salary
and full bonus ($190,000 and $32,000, respectively), she would have earned a
total of $666,000. When her 2017 income of $129,000 and $55,000 in 2018
income are subtracted, this results in damages of $482,000. While the record
does not reflect how the jury arrived at its figure, it compensated her at
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approximately the employment status she would have achieved without the
unlawful discrimination it found that defendants committed.
Plaintiff also presented sufficient evidence to satisfy her burden of
proving that she was entitled to front pay. She demonstrated her income at Care
One through her testimony and offer letter, as well as her income after her
termination through her testimony and tax returns. She submitted evidence
regarding the length of time that she would have continued to receive her Care
One earnings by testifying that she planned to work an additional ten years or
so. It is worth noting that her tentative plans to retire relatively early served to
reduce defendants' liability because plaintiff's early retirement would reduce her
potential lost earnings. Plaintiff also submitted evidence that she would not be
able to earn her Care One income in the future by testifying that she did not
receive offers from the jobs she applied to, testifying as to her reduced earnings,
and testifying that the termination negatively impacted her reputation in the
industry.
The jury's award of $1,412,280 in future lost earnings was reasonable in
light of the evidence. If plaintiff continued to work for ten years after trial and
earned her salary and full bonus, she would have earned a total of $2.22 million.
The jury reduced this amount by $807,720, or an annual average of $80,772.
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The latter figure is near the average of her 2017 and 2018 incomes. The jury's
verdict was not wide of the mark and did not reflect a miscarriage of just ice.
We have no cause to disturb the result.
III.
Having determined plaintiff established defendants' liability and her
compensatory damages, we turn to defendant's challenges to the punitive
damage award. On appeal, they argue that we should vacate the jury's punitive
damages award because: (1) the evidence failed to demonstrate clearly and
convincingly that they engaged in especially egregious conduct; (2) Care One
cannot be vicariously liable for Fitzpatrick-Durski's conduct; (3) plaintiff failed
to provide the jury with any information regarding Care One's financial
condition; (4) the trial court failed to make required findings regarding the
reasonableness of the award; and (5) plaintiff's closing argument was highly
prejudicial.
A.
We first address the sufficiency of the evidence. After plaintiff rested in
the liability phase, the trial court denied defendants' motion to dismiss plaintiff's
punitive damages claim because it rested upon the credibility of witnesses, and
plaintiff raised more than a scintilla of evidence to support her claim. After the
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jury returned its verdict, and before the punitive damages phase, defendants
renewed their motion, which the court denied for the same reasons.
Prior to the commencement of the punitive damage phase, on October 30,
2019, plaintiff's counsel raised issues about his attempt to secure financial
information from Care One. He stated that he asked for Care One's profit and
loss statements, balance sheets, and cash flow statements. However, Care One
provided only a document that was later marked as P-38 in evidence, which was
a one-page profit-and-loss statement from 2016 through September 2019, along
with a certification from Care One's tax manager, who certified that it was a true
and correct copy. The statement showed that Care One had approximately $42.5
million in net revenue and $2.5 million in net income in 2018, and $30.6 million
in net revenue with a $3.1 million loss as of September 2019.
Plaintiff's counsel argued that the information provided was not sufficient
as it was undisputed that Care One was one of multiple interrelated entities for
which defendants provided no financial information. Defendants' counsel
represented that Care One provided management services to the other entities
and was plaintiff's employer, while Care One, LLC, was a holding company for
various entities and did not employ anyone. Plaintiff's counsel argued that
plaintiff was entitled to the financial information of Care One, LLC if defendants
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were unwilling to stipulate to its revenue because Care One was merely a pass-
through entity.
At first, the trial court determined that it would be fair for plaintiff to
submit to the jury that Care One had a relationship with the other entities, noting
the time constraints they were under and explaining that they could not continue
discovery or obtain depositions because they had a jury that had been there for
two weeks already. The trial court later reversed that decision and ultimately
found that N.J.S.A. 2A:15-5.12(c)(4) referenced the financial condition of the
"tortfeasor," and the tortfeasor in the matter before it was Care One, not Care
One, LLC, which was not named in the complaint. As such, plaintiff could
introduce only P-38 into evidence regarding Care One's finances, and her
attorney could not inform the jurors during closing argument that Care One was
part of a larger network of companies in order to make any suggestions about its
financial condition.
Thereafter, plaintiff did not present any evidence during the punitive
damage phase as to either Care One or Care One LLC's financial condition.
Plaintiff's counsel did not mention P-38 in his argument to the jury and it never
received P-38 when it retired to deliberate.
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B.
Punitive damages awards in an LAD action are governed by both the LAD
and the Punitive Damages Act (PDA), N.J.S.A. 2A:15-5.9 to -5.17, and should
only be awarded in exceptional cases where the defendant exhibited "wanton or
reckless conduct," Saffos v. Avaya Inc., 419 N.J. Super. 244, 262-63 (App. Div.
2011) (quoting Catalane v. Gilian Instrument Corp., 271 N.J. Super. 476, 501
(App. Div. 1994)), which "[was] especially egregious." Rendine v. Pantzer, 141
N.J. 292, 314 (1995). Punitive damages are only to be awarded in exceptional
cases even where the LAD has been violated. Weiss v. Parker Hannifan Corp.,
747 F. Supp. 1118, 1135 (D.N.J. 1990) (citing Gray v. Serruto Builders, Inc.,
110 N.J. Super. 297, 319 (Ch. Div. 1970)); see also DiGiovanni v. Pessel, 55
N.J. 188, 190 (1970) ("Something more than the mere commission of a tort is
always required for punitive damages." (quoting Prosser on Torts § 2 (2d ed.
1955))).
In Aguas v. State, 220 N.J. 494 (2015), the Court addressed an LAD claim
against a public employer and explained the relationship between the LAD and
PDA. It stated the PDA's "statutory cap" did not apply to LAD claims, but "the
PDA's 'general requirements for procedural and substantive fairness are
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mandated.'" Id. at 530 (quoting Baker v. Nat'l State Bank, 161 N.J. 220, 229
(1999)).
With these guiding principles in mind, we turn first to defendants'
argument that the evidence at trial about Fitzpatrick-Durski's single statement to
plaintiff failed to "clearly and convincingly" establish their conduct was
sufficiently egregious to warrant an award of punitive damages. We disagree.
First, "[t]he key to the right to punitive damages is the wrongfulness of
the intentional act." Saffos, 419 N.J. Super. at 263 (quoting Nappe v.
Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 49 (1984)). Actions by an
LAD defendant "involving 'trickery and deceit'" satisfy that requirement and
justify an award of punitive damages. Baker v. Nat'l State Bank, 353 N.J. Super.
145, 155-56 (App. Div. 2002). Such actions include a defendant's fabrication of
legitimate reasons to terminate a plaintiff to justify a discrimination based firing.
Id. at 156.
Second, an award of punitive damages is justified where there is proof of
"actual participation in or willful indifference to the wrongful conduct on the
part of upper management," which includes both executive officers and "second
tier" managers who have broad supervisory powers, including those to hire, fire
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and discipline employees. Cavuoti v. N.J. Transit Corp., 161 N.J. 107, 113, 128-
29 (1999).
Proof of actions supporting a punitive damage award must be clear and
convincing, meaning the evidence "should produce in the mind of the trier of
fact a firm belief or conviction as to the truth of the allegations sought to be
established." State v. Hernandez, 334 N.J. Super. 264, 271 (App. Div. 2000)
(quoting In re Purrazzella, 134 N.J. 228, 240 (1993)). In other words, "it is
evidence that is 'so clear, direct and weighty and convincing as to enable either
a judge or jury [the factfinder] to come to a clear conviction, without hesitancy,
of the precise facts in issue.'" Ibid. (quoting In re Seaman, 133 N.J. 67, 74
(1993)).
Direct testimony can qualify as clear and convincing evidence. Ibid.Contrary to defendants' assertion on appeal, direct evidence that is disputed or
contradicted or limited in quantity does not necessarily prevent a rational jury
from relying on it based on its credibility determinations.
Here, we conclude that the trial court correctly decided the subject
motions by accepting as true all evidence that supported plaintiff's position--that
Fitzpatrick-Durski made two racist and demeaning comments to plaintiff, that
she made a racist comment to Wilson, that she was not fully comfortable
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interacting with Valcin, and that she terminated plaintiff to protect her own job
after making the offensive comments. A rational jury could find that
Fitzpatrick-Durski's comments were malicious and egregious and that
terminating plaintiff utilizing plaintiff's alleged poor performance as a pretext is
the sort of "trickery and deceit" that supports an award of punitive damages.
C.
Next, we address Care One's contention that it could not be held liable for
punitive damages based upon Fitzpatrick-Durski's conduct because it
maintained an anti-discrimination policy and had procedures in place to prevent
discrimination and to address any alleged violations. In advancing this
argument, Care One disagrees with the trial court's conclusion that plaintiff
satisfied her burden if she proved participation in, or indifference to, tortious
conduct by upper management, that Fitzpatrick-Durski was part of Care One's
upper management, and that the record contained clear and convincing evidence
of Fitzpatrick-Durski's egregious conduct. According to Care One, the Cavuoti
Court held, pursuant to Kolstad v. ADA, 527 U.S. 526 (1998), that employers
cannot be held vicariously liable for discriminatory actions of employees --
including managerial employees--that the employer specifically forbade. We
reach a different conclusion.
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In order to succeed on a claim for punitive damages under the LAD against
an employer, the plaintiff must demonstrate actual participation in, or willful
indifference to, the wrongful conduct on the part of "upper management," which
includes both executive officers and "second tier" managers. Cavuoti, 161 N.J.
at 113, 128-29. Here, Fitzpatrick-Durski was an upper manager as she was
responsible for enforcing Care One's anti-discrimination policy in her position
as Interim Administrator and had the authority to hire and fire employees.
Defendants do not contest her categorization as either an upper manager or
second tier manager.
Contrary to Care One's contention, the Cavuoti Court held that employers
could be held liable for punitive damages under the LAD when a member of the
employer's upper management was involved in the wrongful conduct. Id. at 116-
18. Applying that holding here, the evidence of Care One's permitting
Fitzpatrick-Durski, a member of upper management who made racist remarks to
plaintiff before terminating her, to cover up her conduct by firing plaintiff for
alleged deficient performance satisfied the requirement for holding Care One
liable for punitive damages for a member of upper management's discriminatory
behavior.
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D.
Having determined that an award of punitive damages against Care One
was warranted, we turn to defendants' contention that the trial court erred by
denying their motions because the jury rendered its verdict without any
information as to defendants' financial condition as required by N.J.S.A. 2A:15 -
5.12(c)(2) and -5.12(c)(4). Because defendants did not raise this issue before
the trial court, we review the matter under our plain error standard , see R. 2:10-
2 ("Any error or omission shall be disregarded by the appellate court unless it is
of such a nature as to have been clearly capable of producing an unjust
result . . . ."), and conclude that the award of punitive damages must be vacated
and remanded for a new trial.
Once a plaintiff proves by clear and convincing evidence that she is
entitled to an award of punitive damages, the jury is then instructed to consider
the factors set forth in N.J.S.A. 2A:15-5.12(c), which states the following:
If the trier of fact determines that punitive damages
should be awarded, the trier of fact shall then determine
the amount of those damages. In making that
determination, the trier of fact shall consider all
relevant evidence, including, but not limited to, the
following:
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(1) All relevant evidence relating to the
factors set forth in subsection b [3] of this
section;
(2) The profitability of the misconduct to
the defendant;
(3) When the misconduct was terminated;
and
(4) The financial condition of the
defendant.
In McDonough v. Jorda, 214 N.J. Super. 338, 348-49 (App. Div. 1986),
we vacated a punitive damages award and ordered a new trial as to damages
3
Subsection (b) states the following:
b. In determining whether punitive damages are to be
awarded, the trier of fact shall consider all relevant
evidence, including but not limited to, the following:
(1) The likelihood, at the relevant time, that serious
harm would arise from the defendant's conduct;
(2) The defendant's awareness of reckless disregard of
the likelihood that the serious harm at issue would arise
from the defendant's conduct;
(3) The conduct of the defendant upon learning that its
initial conduct would likely cause harm; and
(4) The duration of the conduct or any concealment of
it by the defendant.
[N.J.S.A. 2A:15-5.12(b).]
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because, among other issues, the victim failed to present the jury with any
evidence regarding the tortfeasors' ability to pay an award. We held that such
evidence was an "essential" element of the victim's burden of proof, and the
failure to offer any evidence as to that element "precluded the jury from having
a proper foundation to assess damages." Id. at 349. We explained, "[t]his is so
because the theory behind punitive damages is to punish for the past event and
to prevent future offenses, and the degree of punishment resulting from a
judgment must be, to some extent, in proportion to the means of the guilty
person." Ibid.Discovery of a defendant's financial condition must be allowed, but only
after the plaintiff "establish[es] a prima facie case of the right to recover punitive
damages." Herman v. Sunshine Chem. Specialties Inc., 133 N.J. 329, 344
(1993). "'[F]inancial condition' means the 'defendant's ability to pay'" a punitive
damages award. Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 194 N.J. 212, 219
(2008). A defendant's "ability to pay . . . does not necessarily equate with net
worth. Depending on the facts of a case, a defendant's income might be a better
indicator of the ability to pay." Herman, 133 N.J. at 345.
Where a plaintiff does not introduce any evidence of a defendant's
financial condition and the defendant does not move to dismiss before the trial
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court based on that deficiency, a jury can rely upon information adduced during
the case in chief. Id. at 343, 346. In Herman, a products liability case, the Court
described the testimony on cross-examination of the defendant's president about
his company's financial condition before concluding that "although not
overwhelming, [it was] sufficient to support an award of punitive damages." Id.
at 346. There the Court stated the following:
In this case, the cross-examination of Sunshine's
president revealed that Sun-Clean was Sunshine's best-
selling product, accounting for approximately one-third
of the company's gross sales of $3 million. [The
president] also testified that in 1986, when Sunshine's
gross sales had grown to $3.5 million, he and his wife
sold 100% of Sunshine's stock for $750,000. That
evidence, although not overwhelming, is sufficient to
support an award of punitive damages. Although the
jury did not know of the net profit from the sale of Sun-
Clean, it knew the gross sales figures for both the
product and the company. It also knew that [the
president] had sold 100% of the stock of the corporation
for $750,000. "A sale of the entire business in the fairly
recent past, in an arms-length transaction between
sophisticated individuals, is considered practically
conclusive evidence of value as of the time of the
sale." . . . We find that the evidence is sufficient to
sustain the award of punitive damages.
[Ibid.]
In the instant matter, the jury assessed punitive damages of $4,127,370
against Care One without the benefit of any evidence regarding Care One's
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financial condition. Plaintiff argued before the trial court that she required
additional documents from Care One, including its balance sheets and cash flow
statements, as well documents and information regarding Care One, LLC.
Instead of allowing for that discovery, the trial court not only deprived plaintiff
the opportunity, but it also left the jury without information to decide the issue.
Although the court allowed counsel to use P-38, it was never given to the jury
and plaintiff's counsel did not refer to or mention the financials provided in P -
38. The jury determined the damage amount therefore without any evidence of
Care One's financial condition.
Moreover, while plaintiff contended in her argument before us that there
was information about Care One's or Care One LLC's payroll presented during
the liability phase, we cannot conclude that was sufficient information upon
which a jury could determine Care One's financial condition. It simply was not
enough. Under these circumstances, the award must be vacated and a new trial
as to punitive damages must be conducted after an opportunity for discovery of
relevant information. See Tarr, 194 N.J. at 222.
Information regarding the financial condition of Care One, LLC is not
relevant to plaintiff's claim of punitive damages unless she establishes a basis
for the production of such information that is more compelling than its
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ownership and control of Care One. Generally, the wealth of a parent
corporation is irrelevant to the jury's assessment of the appropriateness of
punitive damages. See Herman v. Hess Oil V.I. Corp., 379 F. Supp. 1268, 1276
(D.V.I. 1974), aff'd 524 F.2d 767, 772 (3d Cir.1975) ("[T]he size of [a
defendant's] parent company should not be relevant when assessing damages
against [defendant].").
If the jury on remand awards punitive damages, the trial court is obligated
to make findings consistent with Rule 1:7-4 about the award's reasonableness as
required by N.J.S.A. 2A:15-5.14(a). That statute states in pertinent part, "the
trial judge shall ascertain that the award is reasonable in its amount and justified
in the circumstances of the case, in light of the purpose to punish the defendant
and to deter that defendant from repeating such conduct," and authorizes the
court to "reduce . . . or eliminate the award" if appropriate. See Curzi v. Raub,
415 N.J. Super. 1, 28 (App. Div. 2010) (stating that the statute "gives the judge
an affirmative obligation to see that a punitive damages award is reasonable"
before he or she enters judgment for the award).
E.
In light of our conclusion that a new trial as to punitive damages is
required, we need not reach defendants' remaining arguments, other than to
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direct that the amount of the counsel fee award must also be vacated so that it
may be reconsidered after completion of the new trial on punitive damages.
Affirmed in part; vacated and remanded in part. We do not retain
jurisdiction.
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