Paul M. Martin v. Perma-Chink Systems, Inc. ( 2016 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 21, 2016 Session
PAUL M. MARTIN v. PERMA-CHINK SYSTEMS, INC.
Appeal from the Circuit Court for Knox County
No. 330713 Deborah C. Stevens, Judge
No. E2015-01466-COA-R3-CV-FILED-JUNE 27, 2016
This appeal arises from an age discrimination lawsuit brought under the Tennessee
Human Rights Act (―THRA‖). Paul M. Martin (―Martin‖) sued his former employer
Perma-Chink Systems, Inc. (―Perma-Chink‖) in the Circuit Court for Knox County (―the
Trial Court‖). Martin alleged that he had been fired as a sales representative for Perma-
Chink because of his age, then 60. The matter was tried before a jury, which returned a
verdict in favor of Martin. Perma-Chink filed an appeal to this Court, and Martin raises
his own issues on appeal. Perma-Chink argues, among other things, that the Trial Court
erred in admitting a chart (―the Chart‖) containing raw data of employee ages at their date
of termination, and that Martin failed to prove a prima facie case of age discrimination.
We, inter alia, affirm the age discrimination judgment for Martin. However, we find
error in the calculation of damages for back pay in that Martin’s post-termination
earnings were not taken into account, and we remand for the Trial Court to enter a
remittitur in the amount of $20,219.05. Should Martin refuse this remittitur, Martin may
opt for a new trial. We find further that under the THRA Martin is entitled to an award of
attorney’s fees and litigation expenses incurred on appeal, and we remand for the Trial
Court to determine a reasonable award of attorney’s fees and litigation expenses for
Martin. The judgment of the Trial Court is affirmed as modified.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed as Modified; Case Remanded
D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.
Robert R. Carl and Ashley Meredith Lowe, Knoxville, Tennessee, for the appellant,
Perma-Chink Systems, Inc.
Richard T. Scrugham, Jr., Knoxville, Tennessee, for the appellee, Paul M. Martin.
OPINION
Background
In June 2013, Martin sued Perma-Chink in the Trial Court under the THRA
alleging age discrimination in his termination. Perma-Chink is a business that
manufactures flexible chinking and preservation products for log homes. Martin was 56
when he was hired by Perma-Chink to be a sales representative. He was 60 when he was
fired. Perma-Chink filed an answer in opposition. Perma-Chink also filed a motion for
summary judgment, which was denied. This case was tried before a jury in February
2015.
Martin, age 62 at trial, testified. In May 2008, Martin, then age 56, was
hired by Perma-Chink as an outside sales representative. Martin had spent decades in
sales before taking this new job. Martin described his job at Perma-Chink: ―Outside
salespeople, we were actually given a car, and that was to try to do a lot of traveling. We
actually called face-to-face on the customer and would go out to job sites where log
homes were being built and just things like that. We had contact.‖ Martin originally was
assigned a massive territory encompassing Arkansas, Kansas, Oklahoma, Louisiana and
Texas. In 2009, Tennessee was added to Martin’s territory.
Martin testified as to the leadership at Perma-Chink. Rick Webb (―Webb‖),
then national sales manager, was his direct supervisor. Webb in turn reported to a
―management team,‖ consisting of Terry Hofrichter, Tony Huddleston, and Randy
Adamson. Huddleston and Martin were based in Knoxville. Adamson and Hofrichter
were based in Redmond, Washington. Perma-Chink’s owner, Rich Dunstan, was based
in Redmond, as well. According to Martin, Adamson actually ran the company, and he
was fixated on cutting costs by all means.
Martin described his feelings about his job: ―Perma-Chink was a great
company to work for. I enjoyed my job. The customers were easy to call on, they were
great guys, and so I had no trouble doing the extra.‖ Martin testified to his sales style:
My style is more of a personal selling style. I’m not a high-pressure
kind of guy. I go out and develop a relationship with a customer, get to
kind of know them, get to kind of know their needs, and then will kind of
develop the honesty and their trust in me.
And then at that point I feel that I can go out and, you know, try to
sell them and gradually work products into the -- into the mix of things.
And it’s just worked very good for me.
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Martin testified that he received an ―A‖ rating in 2012 from Webb.
However, problems began to develop for Martin. In August 2012, Perma-
Chink instituted a new training program called Sandler for its outside sales staff. The
parties at trial and on appeal dispute the degree to which Martin resisted learning the new
sales system and whether his effectiveness declined. Martin testified to issues
surrounding Sandler, as well as his performance at Perma-Chink around this time, as
follows:
Q. All right. It says ―The plaintiff’s supervisors, including Mr.
Huddleston and Mr. Webb, have attempted to work with the plaintiff to
improve his performance with respect to planning, expense management,
and sales skills, among other things.‖ How do you respond to that?
A. Well, I had a talk with Tony. Tony Huddleston is kind of a – he’s a
very laid-back guy. He’s a great guy. But he’s the kind of guy that if you
want to find Tony, you’re probably going to find him in the warehouse
drinking a cup of coffee and smoking a cigarette. That’s just Tony’s style.
Everybody likes Tony because he’s laid back, he’s not demanding. Like I
said, he’s a great guy.
So when this says this makes you think that we had a meeting, well,
it wasn’t that way. You kind of walk up to Tony if I was picking up some
product and say, ―Hey, Tony, how are you doing?‖ and Tony would be
sitting there, and we all kidded around with each other.
And so this thing here was that this never happened. They didn’t
attempt to work with me because the person that would have worked with
me would have been Rick. And Rick never worried about it. He didn’t
take it serious. I even asked him about one time about the different aspects
of this system, and he said ―I don’t know. It’s just something that
management has come up with.‖
So there was no attempt to work with me on managing my
performance to plan, with the exception of saying, ―You need to plan
better.‖
I talked to Tony about planning, because I didn’t put a lot of detail in
my calls. I would write down, ―Went down to Satterwhite Sales, met with
Blake or Sam Satterwhite, the owner. We talked about screws, whatever.‖
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And I said, ―Well, what do you want me to say?‖ and Tony’s actual
response was, ―You need to learn to lie better. You need to learn to just put
things on there and satisfy Randy’s curiosity or demand for detail.‖
Martin acknowledged that his sales declined, but stated that was because of certain
factors beyond his control. Martin also denied that he had been uncooperative regarding
the new sales system. In mid-2012, Martin began to suffer medical issues, some related
to his back. As to Perma-Chink’s expressions of concern about his performance, Martin
testified:
Q. They didn’t mention planning until 2012?
A. Basically, it was ―You need to plan better. Randy is looking at your
reports, and we need to get more detail.‖
Q. You can remember that happening once?
A. Yes.
Q. No sit-down meeting, no formal disciplinary, ―You need to get better at
that?‖
A. Absolutely not. The meeting with Tony was standing at the warehouse
while he was drinking a cup of coffee. And we would say things back and
forth, just like general talk.
Q. You never heard the ―P‖ word, ―probation?‖
A. Absolutely not. That would have devastated me, because I loved my job
and I did the best I could do. If Rick would have said ―probation‖ I would
have been devastated, because he told me that I was doing everything good.
Q. If Rick comes into court and says he told you you were on probation,
how would you respond?
A. That’s a lie. That’s not true.
Martin was fired in December 2012. Webb delivered the news to Martin at a meeting at a
McDonald’s restaurant. Webb told Martin that the company had decided to go in a
different direction. An existing outside sales representative, Paul Peebles, took over
Martin’s territory. Martin, meanwhile, began to earn additional income from a nut
roasting business he had opened while still at Perma-Chink.
Martin testified as to why he believed age was the reason for his
termination:
Because when you look back at all the -- my four and-a-half years, I
had nothing but good reviews. I was given the third year I was there, I
believe it was, I was given the largest pay raise of all the salespeople. They
gave me the territory, they entrusted me with the most important territory
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that the company had at the time. And that I had had nothing but good
reviews and positive feedback.
There was no reason whatsoever, any, that I had done anything
wrong -- and that came directly from my boss, Rick Webb -- to be fired.
And so -- but during the time I was starting to deal with some medical
problems, and of course that was going to be -- you know, with your age,
you don’t get -- lots of times you don’t get healthier, you have future more
problems as you get older. And I just think at the time that I went from
being an asset to a liability.
And even with Rick Webb, because he kept telling me, ―I don’t
know why they did this.‖ It just makes me think that I was the second-to-
oldest salesperson with a very large territory, and so I think it had to have
something to do with my age.
Martin acknowledged that Huddleston, who had hired him and also later had a role in his
termination, was older than him.
Adamson, Perma-Chink’s corporate controller, testified. The Chart was
introduced at this point. The Chart had been prepared by Perma-Chink in response to
Martin’s interrogatories and was admitted as Exhibit 30. The Chart revealed that during
the period Martin worked for Perma-Chink, eight outside sales people were fired by
Perma-Chink. Four of the eight were 60 years old or above. The Chart’s relevance and
admissibility is a central issue on appeal.
Adamson testified to the decision to terminate Martin:
Q. When was the actual decision made to terminate Mr. Martin?
A. As I look back now, the actual decision was made early November of
2012.
Q. But you all had been discussing it for months; is that right?
A. Over a lot of the previous months, back at least to February of 2012,
when he was placed as number three, the possible being laid off when we
downsized. But the actual decision itself was finally made on November --
the first week of November.
Q. What were the reasons that Mr. Martin was terminated?
A. The biggest single reason was his lack of effectiveness at growing his
sales territory. And that’s the biggest reason, despite all the lack of effort
and the great rapport and the relationships he was able to build with his
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customers. But at the end of the day, a salesperson’s got to sell and grow
their sales to keep their job.
And it’s such a large and intense and important territory for Perma-
Chink as a whole. This is where we started. It is still kind of our biggest
and most historic territory for all of our legacy accounts, the manufacturers.
And to see what had happened to his sales numbers, declining year
after year after year, when for a year or two all the other territories kind of
did that because of the economy and the natural things you would expect.
But then when the other territories started really getting back to double-
digit growth and Mr. Martin’s territory still had either small gains, small
losses; very flat, though, for such a big territory, which was now down to
about half the size of what it was before we hired him and expanded to this
large sales team.
So that was very much a concern to us, such an important territory to
be not -- he was trying so hard, but really not -- at the end of the day, not
being effective in leading all those relationships and friendships and
everything to have it equate to growing sales.
Adamson testified that age played no factor in Martin’s termination.
Webb, Martin’s direct supervisor, testified. Webb testified regarding
Martin’s performance evaluations and, later, his overall critique of Martin’s performance
as a sales representative, including his alleged tendency to plan poorly for appointments:
Q. Okay. All right. So you said ―He has many strengths in regard to his
position with Perma-Chink.‖ Right? You’re admitting that he has many
strengths?
A. Sure.
Q. ―He excels in work ethic and attitude. Outstanding at rapport building.‖
You’re talking about relationship-building with clients. He’s good with
people?
A. That’s part of it, yes.
Q. All right. ―As Paul and I have discussed in a meeting, he’s being asked
to improve on appointments, customer planning.‖ What do you mean by
that?
A. Just simply making appointments, planning your trips. Have a reason to
go where you’re going. Have a reason, and then use the next step. So it all
has to do basically with planning and appointments.
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***
Q. Mr. Webb, I want to ask you about an email you sent in this chain. Can
you see there on April 18th, 2011, there in the middle of the screen, is there
an email from you to the management team and the owner, Rich Dunstan?
A. Yes, it is.
Q. Okay. Does that reflect that you spoke with Paul about concerns related
to his lack of planning and, you know, not -- not seeing the right people on
his trip to Kansas?
A. Yes, this -- I think this came about from -- I know Paul and I had
talked. He was either in Kansas or it -- it may have been the previous
week. And I know at that time he was talking to a particular customer
about going back out -- back out to Kansas and do like a workshop seminar
for customers that come in.
And I think the whole trip was really wrapped around going to see
this one customer. And I know at the time I told him, ―Paul, you realize
that customer has done less than $200 in two years?‖ And I think he
seemed to be surprised at that.
So, you know, again, we talked about, ―This is the reason you plan,
this is reason you have a reason to be going where you’re going. And do
some -- you know, do some appointments and planning.‖
Webb testified that age played no role in Martin’s termination. The Trial Court denied a
motion by Perma-Chink for directed verdict at the close of Martin’s proof.
Huddleston, Perma-Chink’s East Coast General Manager, testified.
Huddleston’s testimony was in support of the other Perma-Chink management team. In
2012, concerns arose with management about Martin’s performance. Again, the issue
revolved mainly around Martin’s allegedly failing to plan ahead properly for
appointments. Huddleston testified that he spoke to Martin about these concerns. At the
end of the trial, Perma-Chink renewed its motion for directed verdict, which also was
denied.
In February 2015, the jury returned a verdict in favor of Martin in the
amount of $132,040 in damages. Martin filed motions for an award of front pay,
attorney’s fees and costs, and prejudgment interest. In March 2015, Perma-Chink filed a
motion for directed verdict, or, for a new trial, or, in the alternative, for a remittitur.
Specifically, Perma-Chink sought a remittitur based on a requested reassessment of
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Martin’s base pay calculation and an accounting for his income from the nut roasting
business after his termination from Perma-Chink. In July 2015, the Trial Court entered
an order denying Perma-Chink’s motions, and granting only Martin’s motion for
attorney’s fees and costs in the total amount of $136,320.33. The Trial Court approved
the jury’s verdict. Perma-Chink filed an appeal to this Court.
Discussion
Although not stated exactly as such, Perma-Chink raises the following
issues on appeal: 1) whether the Trial Court erred in admitting the Chart; 2) whether the
Trial Court erred in denying Perma-Chink’s motion for directed verdict; 3) whether the
Trial Court erred in denying Perma-Chink’s motion for a new trial; and, 4) whether the
Trial Court erred in denying Perma-Chink’s motion for a remittitur. Martin raises the
following separate issues on appeal: 1) whether the Trial Court erred in denying Martin’s
supplemental motion for attorney’s fees; 2) whether the Trial Court erred in denying
Martin’s motion for prejudgment interest; and, 3) whether Martin should be granted his
attorney’s fees and litigation expenses incurred on appeal.
As our Supreme Court has instructed:
An appellate court shall only set aside findings of fact by a jury in a
civil matter if there is no material evidence to support the jury’s verdict.
Tenn. R. App. P. 13(d); Whaley v. Perkins, 197 S.W.3d 665, 671 (Tenn.
2006). In determining whether there is material evidence to support a
verdict, we shall: ―(1) take the strongest legitimate view of all the evidence
in favor of the verdict; (2) assume the truth of all evidence that supports the
verdict; (3) allow all reasonable inferences to sustain the verdict; and (4)
discard all [countervailing] evidence.‖ Barnes v. Goodyear Tire & Rubber
Co., 48 S.W.3d 698, 704 (Tenn. 2000) (citing Crabtree Masonry Co. v. C
& R Constr., Inc., 575 S.W.2d 4, 5 (Tenn. 1978)). ―Appellate courts shall
neither reweigh the evidence nor decide where the preponderance of the
evidence lies.‖ Barnes, 48 S.W.3d at 704. If there is any material evidence
to support the verdict, we must affirm it; otherwise, the parties would be
deprived of their constitutional right to trial by jury. Crabtree Masonry
Co., 575 S.W.2d at 5.
Creech v. Addington, 281 S.W.3d 363, 372 (Tenn. 2009).
This Court has discussed the standard in THRA cases as follows:
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The Tennessee Human Rights Act (THRA), Tenn. Code Ann. § 4-
21-101 et seq., prohibits employers from discriminating against their
employees who are forty years old or older because of their age. Tenn.
Code Ann. § 4-21-101(a)(3), (b). The THRA specifically prohibits age
discrimination in hiring, firing, fixing compensation, or defining the terms
and conditions of employment. Tenn. Code Ann. § 4-21-401(a)(1), (2),
Wilson v. Rubin, 104 S.W.3d 39, 51 (Tenn. Ct. App. 2002). An employee
seeking to recover for unlawful age discrimination bears the ultimate
burden of proving that considerations of age not only played a role in but
determinatively influenced the employer’s decision. Wilson at 51-52
(citing Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 113 S. Ct. 1701,
1706, 123 L. Ed. 2d 338 (1993); Loeffler v. Kjellgren, 884 S.W.2d 463, 469
(Tenn. Ct. App. 1994); Bruce v. Western Auto Supply Co., 669 S.W.2d 95,
97 (Tenn. Ct. App. 1984)). To establish a prima facie case of age
discrimination using the indirect method of proof, an employee who has
been terminated must demonstrate (1) that he or she is a member of the
protected class of persons forty years of age or older, (2) that his or her
work performance satisfied the employer’s reasonable expectations, (3) that
he or she was actually or constructively terminated, and (4) that the
termination occurred under circumstances giving rise to an inference of
discrimination based on age. Wilson at 52 (citing Collins v. New York City
Transit Auth., 305 F.3d 113, 118 (2d Cir. 2002)). Proof that the plaintiff
was replaced by a substantially younger employee may be shown to
establish the fourth element. Id. (citing O’Connor v. Consolidated Coin
Caterers Corp., 517 U.S. 308, 311-12, 116 S. Ct. 1307, 1310, 134 L. Ed. 2d
433 (1996); Dugan v. Albemarle County Sch. Bd., 293 F.3d 716, 721 (4th
Cir. 2002); Norton v. Sam’s Club, 145 F.3d 114, 118 (2d Cir. 1998)).
Williams v. Greater Chattanooga Public Television Corp., 349 S.W.3d 501, 509-10
(Tenn. Ct. App. 2011).
In addition, this Court has further explained:
As this court stated in Wilson, an employee may demonstrate that an
employer’s proffered, non-discriminatory reasons for an adverse
employment action are pretextual by revealing the ―weaknesses,
implausibilities, inconsistencies, incoherencies, or contradictions‖ in the
employer’s explanation. Wilson, 104 S.W.3d at 50-51 (citing Garrett v.
Hewlett–Packard Co., 305 F.3d 1210, 1217 (10th Cir. 2002)). Of the three
most common ways to undermine an employer’s proffered reasons, one is
establishing that the proffered reasons have no basis in fact. Wilson, 104
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S.W.3d at 50-51 (citing Dews v. A.B. Dick Co., 231 F.3d 1016, 1021 (6th
Cir. 2000); Cliff v. Bd. of Sch. Comm’rs., 42 F.3d 403, 412 (7th Cir. 1994);
McNabola v. Chicago Transit Authority, 10 F.3d 501, 513 (7th Cir. 1993);
Barnes v. Goodyear Tire & Rubber Co., 48 S.W.3d at 708). Proof that an
employer’s explanation is unworthy of credence is a persuasive way to
prove unlawful discrimination. Wilson, 104 S.W.3d at 51; see also Reeves,
530 U.S. at 147-48, 120 S. Ct. 2097.
Frame v. Davidson Transit Organization, 194 S.W.3d 429, 438-39 (Tenn. Ct. App.
2005).
We first address whether the Trial Court erred in admitting the Chart.
―The appellate court affords the trial court wide discretion regarding the admissibility of
evidence and will not overturn the trial court’s determination absent an abuse of that
discretion.‖ Goodale v. Langenberg, 243 S.W.3d 575, 587 (Tenn. Ct. App. 2007).
As pertinent to this issue, Tenn. R. Evid. 401 provides:
Rule 401. Definition of ―relevant evidence.‖—―Relevant evidence‖ means
evidence having any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less
probable than it would be without the evidence.
Tenn. R. Evid. 401. Tennessee Rule of Evidence 403 provides:
Rule 403. Exclusion of relevant evidence on grounds of prejudice,
confusion, or waste of time.—Although relevant, evidence may be
excluded if its probative value is substantially outweighed by the danger of
unfair prejudice, confusion of the issues, or misleading the jury, or by
considerations of undue delay, waste of time, or needless presentation of
cumulative evidence.
Tenn. R. Evid. 403. As this Court noted in Goodale:
Additionally, we have observed that the plain language of the rules
―strongly suggests‖ that when the balance between the evidence’s probative
value and any prejudicial effect is close, the evidence should be admitted.
Id. at 21 (citing Neil P. Cohen, et al., Tennessee Law of Evidence § 403.3,
at 152 (3d ed. 1995)). Therefore, excluding relevant evidence under rule
403 ―is an extraordinary step that should be used sparingly.‖ Id.
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Goodale, 243 S.W.3d at 587.
Regarding statistical evidence, which Martin purports the Chart is, we have
stated:
As the court in Simpson v. Midland-Ross noted: ―statistical evidence
... does not differ greatly from other types of proof.‖ Simpson, 823 F.2d at
944. This evidence is relevant only when it has ―any tendency to make the
existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the
evidence.‖ Tenn.R.Evid. 401. Simpson further directed that:
Statistics gain relevance in one of two ways: the statistics,
standing alone, reasonably lead to a particular conclusion
validated by human experience, or comparative statistics
point out discrepancies in behavior that would cause the
average person to scrutinize the employer’s motives. Unless
the statistics, standing alone or in comparison, are sufficient
to lead the mind naturally to the conclusion sought, the[y]
have no probative value; they do not move the proof one way
or another. ―In short, their usefulness depends on all of the
surrounding facts and circumstances.‖
Simpson, 823 F.2d at 944 (quoting Teamsters v. United States, 431 U.S.
324, 340, 97 S. Ct. 1843, 1856, 52 L. Ed. 2d 396 (1977)).
Brenner v. Textron Aerostructures, a Div. of Textron, Inc., 874 S.W.2d 579, 587 (Tenn.
Ct. App. 1993).
Perma-Chink argues that the Chart’s prejudicial impact outweighed any
probative value. According to Perma-Chink, the Chart’s raw data reflecting that certain
employees over age 60 were terminated proves nothing at all regarding any alleged age
bias. Perma-Chink cites the United States Court of Appeals, Sixth Circuit case of Wilkins
v. Eaton Corp., 790 F.2d 515, 523 (6th Cir. 1986) wherein the court stated regarding a
graph introduced by plaintiff:
[T]he graph prepared by Wilkins does not help him in reaching his ultimate
production and persuasion burdens. The graph shows that the average age
of pilots decreased during a certain period of time, but the graph completely
lacks specificity. For instance, the decrease in age could have resulted
because several pilots retired or voluntarily transferred to non-flying
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positions, requiring younger pilots to be hired. Although the graph
arguably supports an inference of discrimination when establishing a prima
facie case, it is insufficient circumstantial evidence to support the jury
verdict in this case. Even when combined with the other pieces of evidence
offered by the plaintiff, the result is a mere scintilla of evidence from which
no rational jury could have found a violation of the ADEA.
Perma-Chink asserts that it proved at trial that it had legitimate, non-
discriminatory reasons for terminating Martin, including: his declining sales, resistance to
training, and failure to properly plan for appointments. Martin had the burden to make
out a prima facie case and rebut Perma-Chink’s assertion of a legitimate business reason
to fire him. The crux of this case, then, is whether Martin put on material evidence such
that the jury could conclude that Perma-Chink’s stated reason for firing him was
pretextual, and that in fact, he was impermissibly fired on account of his age.
We begin by observing that evidence which is prejudicial obviously is not
necessarily inadmissible on that basis alone. Probative evidence almost always will harm
the other party’s case, and its entry nevertheless is perfectly appropriate. In fact, that
harm to the other party’s case likely is why it was offered in the first place. In the instant
case, the allegation was age discrimination. It strikes us as natural that the plaintiff
would seek to introduce evidence produced and prepared by the employer regarding the
employer’s record when it comes to its practices toward older workers. Perma-Chink
was free to make whatever arguments it deemed proper in rebuttal to the Chart’s
implications, and it did so.
Moreover, the Chart, with its raw data, was not the sole evidentiary or
argumentative basis for Martin’s proof. If it were, perhaps Perma-Chink would have a
stronger argument. However, Martin’s argument went beyond the Chart. Martin testified
that he was a good sales representative who was fired under mysterious circumstances,
that this occurred as he began to experience health problems, and that the de facto leader
of the company wanted to cut costs at all costs. Perma-Chink, in response, presented its
case for why its termination of the 60-year-old Martin was based on legitimate business
reasons and had nothing to do with his age. The jury heard the evidence, weighed it,
made credibility determinations, and rendered its verdict in favor of Martin. We note
also that the Chart was prepared by Perma-Chink in answer to interrogatories submitted
to Perma-Chink.
In sum, Martin’s case did not rely exclusively on the Chart. The Chart was
one piece of circumstantial evidence Martin produced to prove age discrimination.
Tennessee law does not require direct evidence of age discrimination, and such evidence
is quite rare in these type cases. The Trial Court exercised its discretion in allowing the
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Chart to be introduced as an Exhibit, and we find no abuse of that discretion. We hold
that the Trial Court did not err in admitting the Chart.
We next address whether the Trial Court erred in denying Perma-Chink’s
motion for directed verdict. Our Supreme Court discussed the standard under which an
appellate court must review a motion for a directed verdict in Johnson v. Tennessee
Farmers Mut. Ins. Co., stating:
In reviewing the trial court’s decision to deny a motion for a directed
verdict, an appellate court must take the strongest legitimate view of the
evidence in favor of the non-moving party, construing all evidence in that
party’s favor and disregarding all countervailing evidence. Gaston v. Tenn.
Farmers Mut. Ins. Co., 120 S.W.3d 815, 819 (Tenn. 2003). A motion for a
directed verdict should not be granted unless reasonable minds could reach
only one conclusion from the evidence. Id. The standard of review
applicable to a motion for a directed verdict does not permit an appellate
court to weigh the evidence. Cecil v. Hardin, 575 S.W.2d 268, 270 (Tenn.
1978). Moreover, in reviewing the trial court’s denial of a motion for a
directed verdict, an appellate court must not evaluate the credibility of
witnesses. Benson v. Tenn. Valley Elec. Coop., 868 S.W.2d 630, 638-39
(Tenn. Ct. App. 1993). Accordingly, if material evidence is in dispute or
doubt exists as to the conclusions to be drawn from that evidence, the
motion must be denied. Hurley v. Tenn. Farmers Mut. Ins. Co., 922
S.W.2d 887, 891 (Tenn. Ct. App. 1995).
Johnson v. Tennessee Farmers Mut. Ins. Co., 205 S.W.3d 365, 370 (Tenn. 2006).
Our standard of review is exacting, as described above, on motions for
directed verdict. There were numerous factual disputes in this case, with both sides
presenting evidence for their claims. The Trial Court was obliged to take ―the strongest
legitimate view of the evidence‖ in favor of Martin as the non-moving party in deciding
this motion. As discussed more fully above, the crux of the case was whether Martin
presented material evidence from which a jury could find that Perma-Chink’s stated
reason for firing him was pretextual, and that, their right otherwise to dismiss an
employee at will was not implicated. We conclude that Martin produced sufficient
circumstantial evidence from which the jury could reach the finding that it did. We
affirm the Trial Court in its declining to grant Perma-Chink’s motion for a directed
verdict.
We next address whether the Trial Court erred in denying Perma-Chink’s
motion for a new trial. With regard to a motion for new trial, this Court has explained:
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A trial court is given wide latitude in granting a motion for a new
trial, and a reviewing court will not overturn such a decision unless there
has been an abuse of discretion. Mize v. Skeen, 63 Tenn. App. 37, 42-43,
468 S.W.2d 733, 736 (1971); see also Tennessee Asphalt Co. v. Purcell
Enter., 631 S.W.2d 439, 442 (Tenn. App. 1982). As the thirteenth juror,
the trial judge is required to approve or disapprove the verdict, to
independently weigh the evidence, and to determine whether the evidence
preponderates in favor of or against the jury verdict. Mize, 63 Tenn. App.
at 42, 468 S.W.2d at 736. If the trial judge is dissatisfied with the verdict,
he should set it aside and grant a new trial. Hatcher v. Dickman, 700
S.W.2d 898, 899 (Tenn. App. 1985) (quoting Cumberland Tel. & Tel. Co.
v. Smithwick, 112 Tenn. 463, 469, 79 S.W. 803, 804 (1904)).
Loeffler v. Kjellgren, 884 S.W.2d 463, 468-69 (Tenn. Ct. App. 1994).
Here, Perma-Chink cites to two statements made by the Trial Court which
allegedly suggest that the Trial Court based its rulings on evidence not contained in the
record. First, the Trial Court, after having ruled that Martin could not explore alleged
inconsistences from Perma-Chink in their explanations regarding the termination of
former employees, stated the following as it denied Perma-Chink’s motion for a directed
verdict:
Well, I think it’s a very difficult case. I’m not sure that the raw data
provides us any basis from which we can conclude discrimination.
However, I think Mr. Scrugham’s argument that you’ve got people who
were terminated at a certain age and that you’ve got inconsistencies about
the reasons for termination, given the directed verdict standard, I’m going
to allow it to proceed to trial and let you put your proof on.
First, it is inconclusive whether the Trial Court’s statement concerning ―inconsistencies‖
refers to the specific subject matter the Trial Court previously had ruled was not to be
explored. Second, we do not believe this statement rises to a showing abuse of discretion
in denying Perma-Chink’s motion for a new trial.
Second, Perma-Chink points out a statement the Trial Court made at the
end of the trial whereby the Trial Court appeared to have misgivings about the strength of
Martin’s case. The Trial Court stated:
THE COURT: And I clearly understand how tough a burden it is to get a
directed verdict motion. I’m just concerned that what it boils down to is
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that you’ve got evidence that four out of seven, or whatever that number is
that you wanted to argue, is basis for showing that there’s a pattern.
MR. SCRUGHAM: We say that that’s part of our circumstantial evidence;
yes, your Honor.
THE COURT: All right. And that it’s not countervailing evidence, it’s
just additional facts; which is that’s four out of those seven people, but
we’ve had at least three people here testify that they are over the age of 60
and still employed by Perma-Chink.
So, you know, it’s not countervailing evidence, it is I’m just not sure
how we get to the statistical evidence, and then I’m not sure how we get to
the health care as being anything other than a general misstatement about
the issues related to questions that you would anticipate that an employer
would generally ask their employees. Like, ―Please, you know, do what
you can to take care of yourself to keep our health care costs down.‖
Similar to ―When do you intend to retire, or what do you intend to do with
your retirement benefit plans?‖
If we can’t ask those questions and they become a basis for creating
an age discrimination case, then it seems to me you’re creating, de facto,
every person who is over the age of 60 who works for a company that has
health insurance is going to, by definition, be guilty of age discrimination,
because under your theory everyone who ages becomes more expensive. I
don’t know that that’s correct, but that seems to be what you’re arguing.
***
And I’m going to deny the motion for directed verdict. I’m just telling you
that I’m very concerned that while I agree with you that in most
employment discrimination cases you are going to have to connect dots to
get to an age discrimination case, it seems to me what you’re asking under
the facts that have been presented in evidence to this jury that we go in the
opposite direction and say that anybody over the age of 60 who has health
insurance who files a claim is going to be entitled to an age discrimination
claim.
It does appear the Trial Court was grappling with Martin’s case, perhaps
even adopting a ―devil’s advocate‖ stance, rather than ruling on the merits of his claim.
At any rate, the Trial Court went on to deny Perma-Chink’s requested relief. These
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statements made by the Trial Court and cited by Perma-Chink do not undermine the
validity of the Trial Court’s ultimate exercise of its thirteenth juror function. The Trial
Court clearly had questions, resolved those questions, and made its decision. We find no
abuse of discretion in the Trial Court’s declining to grant Perma-Chink’s motion for a
new trial.
Perma-Chink’s final issue is whether the Trial Court erred in denying
Perma-Chink’s motion for a remittitur. Perma-Chink requests a remittitur based on an
alleged faulty calculation of Martin’s base pay used by the jury which included severance
pay and paid time off, and the income Martin received from his nut roasting business
following his termination at Perma-Chink. The record establishes that Martin, post-
termination from 2013 and 2014, earned $20,219.05 from his nut roasting business. Our
Supreme Court has stated:
Where the trial judge has approved the verdict in its role as
thirteenth juror—as the trial court did in this case—the Court of Appeals’
review of the verdict and its ability to suggest a remittitur is limited to a
review of the record to determine whether the verdict is supported by
material evidence. Poole v. Kroger Co., 604 S.W.2d 52, 54 (Tenn. 1980);
see also Thrailkill, 879 S.W.2d at 841; Ellis, 603 S.W.2d at 129. Material
evidence is ―evidence material to the question in controversy, which must
necessarily enter into the consideration of the controversy and by itself, or
in connection with the other evidence, be determinative of the case.‖
Knoxville Traction Co. v. Brown, 115 Tenn. 323, 331, 89 S.W. 319, 321
(1905). An appellate court is required to take ―the strongest legitimate
view of all the evidence in favor of the verdict, assume the truth of all
evidence that supports the verdict, allowing all reasonable inferences to
sustain the verdict, and to discard all countervailing evidence.‖ Akers v.
Prime Succession of Tenn., Inc., 387 S.W.3d 495, 501-02 (Tenn. 2012)
(quoting Barkes v. River Park Hosp., Inc., 328 S.W.3d 829, 833 (Tenn.
2010)). The material evidence analysis is very deferential to the award by
the jury and the judgment of the trial court when it affirms the verdict as the
thirteenth juror. See Ellis, 603 S.W.2d at 129 (―[W]hen the trial judge has
approved the verdict, the review in the Court of Appeals is subject to the
rule that if there is any material evidence to support the award, it should not
be disturbed.‖ (emphasis added)). ―It matters not a whit where the weight
or preponderance of the evidence lies under a material evidence review.‖
Hohenberg Bros. Co. v. Mo. Pac. R.R. Co., 586 S.W.2d 117, 119-20 (Tenn.
Ct. App. 1979). ―It is simply a search of the record to ascertain if material
evidence is present to support the verdict.‖ Id. Because the material
evidence standard lies at the foundation of the right to trial by jury, if there
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is material evidence to support a jury verdict, the appellate courts must
affirm it. See Tenn. Const. art. I, § 6; Truan v. Smith, 578 S.W.2d 73, 74
(Tenn. 1979) (quoting D.M. Rose & Co. v. Snyder, 185 Tenn. 499, 508, 206
S.W.2d 897, 901 (1947)); Crabtree Masonry Co., 575 S.W.2d at 5; City of
Chattanooga v. Ballew, 49 Tenn. App. 310, 316-17, 354 S.W.2d 806, 808-
09 (1961); see also Grandstaff v. Hawks, 36 S.W.3d 482, 497 (Tenn. Ct.
App. 2000) (―We have a duty to uphold a jury’s verdict whenever
possible.‖).
The Court of Appeals’ authority to suggest a remittitur when the trial
court has affirmed the verdict is far more circumscribed than that of the trial
court. Coffey v. Fayette Tubular Prods., 929 S.W.2d 326, 331 & n. 2
(Tenn. 1996); see also Ellis, 603 S.W.2d at 129. If the Court of Appeals
suggests a remittitur, the plaintiff may either accept the remitted amount,
opt for a new trial, or accept the remitted amount under protest and apply to
this Court for permission to appeal. Tenn. Code Ann. § 20-10-103(a).
Meals ex rel. Meals v. Ford Motor Co., 417 S.W.3d 414, 422-23 (Tenn. 2013).
Perma-Chink’s request is not based upon an argument that the jury’s
verdict inherently is excessive, per se, but rather that material evidence does not support
this specific portion of the jury’s verdict. In effect, Perma-Chink asks us, at least in part,
to tinker with the amount of damages awarded Martin by the jury. This Court’s ability to
modify a jury’s award is circumscribed heavily as discussed by our Supreme Court’s
opinion in the Meals case cited above. In the present case, the jury awarded Martin back
pay of $132,040. The jury awarded Martin nothing for humiliation and embarrassment or
emotional distress. The figure of $132,040 represents Martin’s annual earnings at Perma-
Chink in 2012, his final year at the company, multiplied by 2.15 to cover the
approximately two-year period from his termination through trial. The Trial Court,
deciding upon a post-trial motion, declined Perma-Chink’s request for a remittitur to
account for the $20,219.05 Martin earned at his nut roasting business.
On the issue of remittitur, we are constrained to take the strongest
legitimate view of the evidence in favor of the verdict and discard all countervailing
evidence. From our careful review of the record, it is apparent, however, that the jury
failed to credit Perma-Chink for the income Martin earned from his nut roasting business
following his termination from Perma-Chink. In the case of Skalka v. Fernald Envtl.
Restoration Mgmt. Corp., 178 F.3d 414 (6th Cir. 1999), the United States Court of
Appeals, Sixth Circuit remanded a case for the district court to determine an appropriate
remittitur in part based upon a failure to reduce back pay damages to account for other
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income. Although that case dealt with the Age Discrimination in Employment Act rather
than the THRA, we find the reasoning analogous.
With respect to the calculation of base pay, we find no reversible error.
However, we find no legal justification whatsoever for the failure to credit Perma-Chink
for the $20,219.05 Martin earned from his nut roasting business following his termination
by Perma-Chink. We, therefore, find that the Trial Court erred in declining Perma-
Chink’s request for a remittitur, and instead suggest a remittitur in the amount of
$20,219.05. Martin now may accept the remitted amount, opt for a new trial, or accept
the remitted amount under protest and file an application to appeal to our Supreme Court.
We next turn to Martin’s issues. We first address whether the Trial Court
erred in denying Martin’s supplemental motion for attorney’s fees. In Killingsworth v.
Ted Russell Ford, Inc., 104 S.W.3d 530, 534 (Tenn. Ct. App. 2002), we noted that ―a
determination of reasonable attorney’s fees and costs is necessarily a discretionary
inquiry‖ and that, normally, an appellate court will defer to the trial court’s determination
absent an abuse of discretion. Our Supreme Court has indicated that a trial court has
abused its discretion when it ―either applied an incorrect legal standard or reached a
clearly unreasonable decision, thereby causing an injustice to the aggrieved party.‖ Kline
v. Eyrich, 69 S.W.3d 197, 204 (Tenn. 2002). To the extent that reasonable minds can
disagree about the trial court’s discretionary decision, such decision will be upheld. State
v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000). Martin requested additional attorney’s fees of
$6,627.50 and costs of $70.20. These expenses were incurred in response to Perma-
Chink’s post-trial motions. We find no abuse of discretion in the Trial Court’s declining
to award Martin the additional attorney’s fees.
We next address whether the Trial Court erred in denying Martin’s motion
for prejudgment interest. Our Supreme Court has stated:
An award of prejudgment interest is within the sound discretion of
the trial court and the decision will not be disturbed by an appellate court
unless the record reveals a manifest and palpable abuse of discretion. This
standard of review clearly vests the trial court with considerable deference
in the prejudgment interest decision. Generally stated, the abuse of
discretion standard does not authorize an appellate court to merely
substitute its judgment for that of the trial court. Thus, in cases where the
evidence supports the trial court’s decision, no abuse of discretion is found.
Myint v. Allstate Ins. Co., 970 S.W.2d 920, 927 (Tenn. 1998) (citations omitted).
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Martin notes that the jury awarded Martin two years of back pay, based
upon his 2012 W-2 form. Martin, however, fails to articulate how the Trial Court abused
its discretion in declining to award him prejudgment interest. Based on this record, we
find no manifest and palpable abuse of discretion in the Trial Court’s declining to award
Martin prejudgment interest.
The final issue we address is whether Martin should be granted his
attorney’s fees and litigation expenses incurred on appeal. Our Supreme Court has
stated:
The plaintiff has asked this Court to award attorney’s fees incurred
in this appeal. The remedies provided by the THRA include ―reasonable‖
attorney’s fees. Tenn. Code Ann. § 4-21-306(a)(7) & -311. The plaintiff is
the prevailing party in this suit and is entitled to relief under the THRA.
The THRA does not require that the plaintiff prevail on all appellate issues
before attorney’s fees may be awarded. See Tenn. Code Ann. § 4-21-306
(providing that affirmative action ordered under the THRA ―may include ...
a reasonable attorney’s fee‖); see generally Church of Scientology Flag
Serv. Org. v. City of Clearwater, 2 F.3d 1509, 1513 (11th Cir. 1993)
(noting ―well-settled‖ law that plaintiff is prevailing party if plaintiff has
succeeded on any significant issue which achieves some of the benefit the
parties sought in bringing suit). Accordingly, the plaintiff’s attorneys are
entitled to reasonable compensation for their time spent in pursuing this
appeal. The issue is remanded to the trial court for a determination of a
reasonable fee for the attorneys’ services during the appellate process.
Forbes v. Wilson County Emergency Dist. 911 Bd., 966 S.W.2d 417, 422 (Tenn. 1998).
In light of Martin’s prevailing on most issues at trial and on appeal, and,
given the case precedent cited above, we, in the exercise of our discretion, find that
Martin is entitled to an award of attorney’s fees and litigation expenses incurred on
appeal. On remand, the Trial Court is to determine and award those reasonable attorney’s
fees and litigation expenses incurred by Martin in defending this appeal.
In summary, we affirm the age discrimination judgment for Martin, but
remand to the Trial Court for entry of a remittitur of $20,219.05. Martin may accept the
remitted amount, opt for a new trial, or accept the remitted amount under protest and file
an application to appeal to our Supreme Court. On remand, the Trial Court also is to
determine and award Martin his reasonable attorney’s fees and litigation expenses
incurred on appeal.
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Conclusion
The judgment of the Trial Court is affirmed as modified, and this cause is
remanded to the Trial Court for collection of the costs below, entry of a remittitur of
$20,219.05 should Martin accept it, and for the determination of and award to Martin of
his reasonable attorney’s fees and litigation expenses incurred on appeal pursuant to the
THRA. The costs on appeal are assessed against the Appellant, Perma-Chink Systems,
Inc., and its surety, if any.
____________________________________
D. MICHAEL SWINEY, CHIEF JUDGE
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