1999 -NMSC- 13, Coates v. Wal-Mart Stores, Inc., WAL-MART

Citation1999 NMSC 13, 127 N.M. 47, 976 P.2d 999
Case DateFebruary 22, 1999
CourtSupreme Court of New Mexico

Page 999

976 P.2d 999
75 Empl. Prac. Dec. P 45,807, 1999 -NMSC- 13
Cathy Jean COATES and Madeline Duran, Plaintiffs-Appellees
and Cross-Appellants,
WAL-MART STORES, INC., d/b/a Sam's Club, Defendant-Appellant
and Cross-Appellee.
No. 24717.
Supreme Court of New Mexico.
Feb. 22, 1999.
Rehearing Denied March 18, 1999.

Page 1001

Sharp, Jarmie & Scholl, Mark D. Jarmie, Steve Scholl, Ned S. Fuller, Albuquerque, for Appellant and Cross-Appellee.

Tinkler & Bennett, Stephen E. Tinkler, Merit Bennett, Michelle Masiowski, Santa Fe, for Appellees and Cross-Appellants.

Jane Bloom Yohalem, Santa Fe, for Amici Curiae, New Mexico Women's Bar Association and New Mexico Coalition of Sexual Assault Prevention.


BACA, Justice.

¶1 Wal-Mart Stores, Inc. (Wal-Mart) appeals the district court's judgment in favor

Page 1002

of former employees, Appellees Cathy Jean Coates (Coates) and Madeline Duran (Duran). On cross-appeal, Coates and Duran appeal the court's denial of prejudgment interest on punitive damage awards. On certification from the Court of Appeals, pursuant to NMSA 1978, § 34-5-14 (1972), this Court now considers the following issues: 1) whether the exclusivity provision in the New Mexico Workers' Compensation Act, NMSA 1978, §§ 52-1-1 to -70 (1929, as amended through 1993), bars a common law sexual harassment tort; 2) whether the district court erred in several evidentiary rulings; 3) whether the district court erred in not including an "intervening cause" jury instruction; 4) whether there was cumulative error requiring reversal; 5) whether substantial evidence exists to support an intentional infliction of emotional distress claim and the award of punitive damages; 6) whether the district court erred in not remitting the damage award; and 7) whether the district court erred or abused its discretion in not awarding prejudgment interest on the punitive damages award. After careful review, we affirm the district court's rulings and judgment.


¶2 This case stems from supervisor Toby Alire's (Alire) alleged sexual harassment of Coates and Duran while all three were employees at Sam's Club, a division of Wal-Mart. Coates and Duran claim that Alire physically and verbally sexually harassed them on several occasions between 1993 and 1994. Appellees further contend that Wal-Mart knew of this sexual harassment, yet failed to protect them or reprimand Alire.

¶3 Between the Spring of 1993 and 1994, Coates and Duran reported several incidents of sexual harassment to management. Several other women who claimed Alire had also sexually harassed them, or who had witnessed Alire harassing Coates and Duran, also reported several incidents to management.

¶4 Sam's Club manager, Tom Romero, personally witnessed one incident of Alire's sexual harassment. Romero reported the incident, and several others that had been reported to him, to Alire's immediate supervisor. In turn, Alire's immediate supervisor reported the incidents to Sam's Club's assistant manager. Romero requested that the assistant manager give Alire a written reprimand. The assistant manager never reprimanded Alire.

¶5 Besides Romero, an assistant manager and general manager also observed Alire's behavior. In August 1993, both the assistant manager and general manager watched and laughed as Alire made lewd and vulgar suggestions to Duran. Neither manager initiated disciplinary action against Alire.

¶6 In December of 1993, Duran claimed that Alire approached her while she was on a forklift and grabbed her breasts from behind. Duran reported the incident to the assistant and general manager along with other on-going harassment. Again, Wal-Mart did not investigate or reprimand Alire.

¶7 A week after this incident, Wal-Mart informed Duran that it had decided to make Alire her supervisor. Duran claimed that Wal-Mart told her that the decision was final and that if she objected her only alternative was to quit. Duran quit her job near the end of December 1993. However, before she left, Duran again told the assistant manager of the many incidents of sexual harassment and assault that had occurred since the Spring of 1993. The assistant manager reported each incident to the general manager. Wal-Mart still did not take any action against Alire.

¶8 After Duran quit, Coates and other female employees continued to complain about Alire's continued sexually harassing behavior. In February 1994, Coates and Kim Martinez (Martinez), another female employee, reported to the store's manager that Alire had allegedly pulled Martinez' blouse open to look at her breasts. Wal-Mart took no action either to investigate or to reprimand Alire regarding the incident. Incidents of sexual harassment continued into the Spring of 1994, and despite many complaints, Wal-Mart never disciplined Alire.

¶9 In March 1994, a supervisor saw Alire make an obscene gesture to Coates and heard Coates scream. Wal-Mart again did

Page 1003

not respond to Alire's actions and permitted Alire to remain a supervisor.

¶10 Later in March 1994, Wal-Mart held a management meeting and permitted Coates and Martinez to describe the incidents of Alire's sexually harassing behavior. After the meeting, Wal-Mart transferred Alire to a different department. However, Alire still remained a supervisor and was not otherwise disciplined.

¶11 Wal-Mart then transferred Alire to a department immediately adjacent to Coates's workstation. Coates still had contact with Alire and reported to management that his angry manner frightened her. Wal-Mart took no action in this regard and in May 1994, Coates quit.

¶12 A month after Coates left Wal-Mart, the Rio Grande Sun published a newspaper article reporting Alire's arrest for the assault, kidnapping, and rape of his girlfriend. Wal-Mart's general manager read the article and reported it to national headquarters. Wal-Mart continued to employ Alire, even after his conviction. However, Wal-Mart did terminate Alire while in jail, after his continued absence violated Wal-Mart's leave policies.

¶13 After leaving Wal-Mart's employment, Coates and Duran filed a claim against Wal-Mart alleging negligent supervision and intentional infliction of emotional distress. Coates and Duran also filed a claim against Alire individually.

¶14 Before trial, Wal-Mart filed a motion for summary judgment claiming that the Workers' Compensation Act's (WCA) exclusivity provision barred Coates and Duran from raising a claim outside the WCA. The court denied the motion and the matter then proceeded to trial.

¶15 Wal-Mart also filed a motion in limine to exclude the newspaper article and any other evidence regarding Alire's arrest. Wal-Mart argued that the acts for which Alire was arrested and convicted occurred after Coates and Duran left Wal-Mart. The court granted the motion. However, after Coates and Duran announced that they had settled with Alire, the court reversed its ruling on the motion in limine and allowed the facts of Alire's arrest into evidence.

¶16 The court also admitted the testimony of an expert specializing in preventing and responding to workplace sexual harassment. Coates and Duran introduced the expert's testimony in response to Wal-Mart's claim that it had adopted model corporate policies concerning sexual harassment.

¶17 The court, however, excluded evidence of Coates's ex-husband's incarceration and inability to provide child support. The court also excluded evidence of Duran's own incarceration and background. Wal-Mart claimed that such evidence would have contradicted the claim that Alire's actions caused them severe emotional distress. The court also excluded from evidence photographs of a forklift that would allegedly show the impossibility of Duran's claim that Alire had jumped on a forklift and performed lewd acts behind her, although the court allowed the photographs to be used for demonstrative purposes.

¶18 Wal-Mart moved for a directed verdict at the close of Appellee's case and at the close of all evidence. The court denied both motions.

¶19 The jury found in favor of Duran and Coates on both the negligent supervision and intentional infliction of emotional distress claims. The jury awarded Duran $84,000 in compensatory damages for the negligent supervision claim, $30,000 in compensatory damages for the intentional infliction of emotional distress claim, and $1,200,000 in punitive damages. Coates received $48,000 in compensatory damages for the negligent supervision claim, $15,000 for the intentional infliction of emotional distress claim, and $555,000 in punitive damages. The court also awarded ten percent prejudgment interest on the compensatory damages but did not award prejudgment interest on the punitive damage awards.

¶20 Wal-Mart filed a motion for judgment notwithstanding the verdict or, in the alternative, for remittitur. The district court subsequently denied this motion. Wal-Mart then appealed the verdict and judgment to the Court of Appeals. Coates and Duran, in

Page 1004

a cross-appeal, also appealed the denial of prejudgment interest on the punitive damage awards. The Court of Appeals then certified the matter to this Court for our review.


¶21 The question whether the WCA covers an injury that occurred in the workplace is a question of law, which we review de novo. See Cox v. Chino Mines/Phelps Dodge, 115 N.M. 335, 337, 850 P.2d 1038, 1040 (Ct.App.1993). We also review the court's ruling on a motion for summary judgment under a de novo standard of review, while determining whether any genuine issues of material fact exist and whether the movant was entitled to judgment as a matter of law. See Rule 1-056(C) NMRA 1999; Gallegos v. State Bd. of Educ., 1997-NMCA-040 p 12, 123 N.M. 362, 940 P.2d 468.

¶22 The WCA was created to offset the lost wages of a worker injured by a work-related accident, while promoting a policy in which workers would not become dependant on state welfare programs. See Casias v. Zia Co., 93 N.M. 78, 80, 596...

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