916 A.2d 484 (N.J.Super.A.D. 2007), Tarr v. Bob Ciasulli's Mack Auto Mall, Inc.

• Docket Number: .
• Citation: 916 A.2d 484,390 N.J.Super. 557
• Date: 26 February 2007
• Parties: Carol TARR, Plaintiff-Respondent, v. BOB CIASULLI'S MACK AUTO MALL, INC., Defendant-Appellant.
• Court: New Jersey Superior Court

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916 A.2d 484 (N.J.Super.A.D. 2007)

390 N.J.Super. 557

Carol TARR, Plaintiff-Respondent,

v.

BOB CIASULLI'S MACK AUTO MALL, INC., Defendant-Appellant.

Superior Court of New Jersey, Appellate Division.

February 26, 2007

Argued January 10, 2007.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-986-98.

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[Copyrighted Material Omitted]

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Resa T. Drasin argued the cause for appellant (Woehling & Freeman, attorneys; Ms. Drasin, of counsel and on the brief).

Ronald L. Lueddeke, Spring Lake, argued the cause for respondent.

Before Judges Lefelt, Parrillo and Sapp-Peterson.

OPINION

LEFELT, P.J.A.D.

Complaining of sexual harassment in the workplace, plaintiff Carol Tarr sued defendant Bob Ciasulli and several of his wholly-owned corporations, including defendant Ciasulli's Mack Auto Mall, Inc. A jury found defendant liable for sexual harassment but did not find that plaintiff suffered any damages. On appeal to the Appellate Division, plaintiff was awarded a new trial on damages. Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 360 N.J. Super. 265, 280-81, 822 A.2d 647 (App. Div. 2003), aff'd, 181 N.J. 70, 853 A.2d 921 (2004). The Supreme Court subsequently affirmed our decision and specifically held "that in discrimination cases, which by definition involve willful conduct, the victim may recover all natural consequences of that wrongful conduct, including emotional distress and mental anguish damages arising out of embarrassment, humiliation, and other intangible injuries." Supra, 181 N.J. at 82, 853 A.2d 921.

Upon retrial, a jury awarded plaintiff $25,000 in compensatory damages and $85,000 in punitive damages. The trial judge awarded plaintiff $165,229.39 in attorney's fees, $7,689.20 in costs, and added $7,930.14 in pre-judgment interest, entering a total judgment of $290,848.73. This time, defendant's appeal challenges (1) the attorney's fees and costs awarded (2) the compensatory damage award because the judge precluded defendant from introducing evidence of plaintiff's extramarital affair with a co-worker; and (3) the punitive damage award because (a) defendant was out of business and had no assets, (b) the court failed to reduce or eliminate the award under the Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17 (the Act), and (c) the trial court instructed the jury to consider deterrence of others in deciding the amount of the award. We affirm the compensatory damage award and the attorney's fees and costs awards, except for the fee awarded by the trial court for plaintiff's appearance in the Supreme Court. We vacate the punitive damage award and remand for retrial on the amount of the award because the Act prohibits enhancing a punitive damage award for general deterrence purposes.

I.

Preliminarily, we note that because of the issues raised on this appeal, it is not necessary to detail the pervasive and extensive sexual harassment that plaintiff endured, which was fully explicated in the Supreme Court decision. Tarr, supra, 181 N.J. at 74-76, 853 A.2d 921.

To place defendant's first argument in factual context, we need only to

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explain that defendant wanted to introduce evidence of plaintiff's extra-marital affair with a co-worker. Defendant wished to present this evidence because defendant contended it was the affair and not the sexual harassment that was the cause of any emotional distress for which plaintiff sought compensation. The trial court precluded evidence of the affair because its probative value was substantially outweighed by undue prejudice, but permitted evidence establishing that plaintiff was having marital difficulties during this period. Defendant argues that this ruling improperly impeded its defense.

The trial court is granted broad discretion in determining whether the probative value of any evidence is substantially outweighed by undue prejudice. Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 492, 734 A.2d 1147 (1999) (citing State v. Carter, 91 N.J. 86, 106, 449 A.2d 1280 (1982)). Consequently, we will not reverse decisions pursuant to N.J.R.E. 403 "unless it can be shown that the trial court palpably abused its discretion, that is, that its finding was so wide of the mark that a manifest denial of justice resulted." Ibid. That is not what occurred here.

The court recognized that the jury was permitted to hear that plaintiff was "having marital difficulties at the time." The evidence of marital difficulties was sufficient for defendant to make its point. Other than the existence of the affair, defendant had no other evidence to submit, but sought to explore the issue in cross-examination of plaintiff. Defendant made no proffer of any evidence that, in any way, linked the affair to plaintiff's distress. Under these circumstances, we cannot find an abuse of discretion.

II.

A.

With regard to the punitive damage award, defendant first contends that no award was warranted because defendant Mack Auto Mall was completely out of business and without any assets.

There is no question that defendant's financial condition is a relative factor in all punitive-damages awards. Herman v. Sunshine Chem. Specialties, 133 N.J. 329, 339, 627 A.2d 1081 (1993). "In assessing exemplary damages, a jury must take into consideration the wealth of the defendants." McConough v. Jorda, 214 N.J. Super. 338, 349, 519 A.2d 874 (App.Div. 1986), certif. denied, 110 N.J. 302, 540 A.2d 1282 (1988), cert. denied, 489 U.S. 1065, 109 S.Ct. 1338, 103 L.Ed.2d 809 (1989).

However, the "financial condition of the defendant," which was submitted to the jury in this case, is only one factor in the determination. N.J.S.A. 2A:15-5.12(c)(4). Besides the defendant's financial condition, "the trier of fact must also consider all relevant evidence," in setting the amount of damages including, for example, the duration of the misconduct and whether defendant was aware that "serious harm would arise" from the misconduct. Id. at 5.12(c)(1). Furthermore, "defendant's financial condition must be measured at the time of the wrongful conduct." Baker v. Nat'l State Bank, 161 N.J. 220, 232, 736 A.2d 462 (1999). Accordingly, we find no error here.

B.

Again relying essentially on the fact that defendant was out of business, it argues that the court should have found the jury award on punitive damages unreasonable and unjustified pursuant to the Act.

The relevant statutory provision requires the trial judge before entering a judgment to "ascertain that the award is

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reasonable in its amount and justified in the circumstances of the case." N.J.S.A. 2A:15-5.14(a). The court must make these determinations "in light of the purpose to punish the defendant and to deter that defendant from repeating such conduct." Ibid. The statute further provides that "[i]f necessary to satisfy the requirements of this section, the judge may reduce the amount of or eliminate the award of punitive damages." Ibid.

The trial court considered defendant's argument upon defendant's motion for a new trial and reduction of the punitive damages award. The judge found that the $85,000 award was not excessive considering the $25,000 compensatory award and defendant's egregious conduct toward plaintiff, which had been confirmed by two juries. The court's decision not to reduce this award is not an abuse of discretion. See Maudsley v. State, 357 N.J. Super. 560, 590, 816 A.2d 189 (App.Div. 2003) (citing Rendine v. Pantzer, 141 N.J. 292, 661 A.2d 1202 (1995)).

C.

Defendant also challenges the trial court's punitive damage jury instruction, which advised the jury that its award was "to punish the defendant and to deter the defendant and others from similar future wrongful conduct." ¹ Defendant claims that the Act eliminated the deterrence of others from the purposes for such damages.

The State has a legitimate interest "in punishing unlawful conduct and deterring its repetition." BMW of N. America, Inc. v. Gore, 517 U.S. 559, 568, 116 S.Ct. 1589, 1595, 134 L.Ed.2d 809, 822 (1996). The Act provides that the purpose of a punitive damage award is "to punish the defendant and to deter that defendant from repeating such conduct." N.J.S.A. 2A:15-5.14. The Act defines punitive damages as "exemplary . . . damages awarded against a party in a civil action because of aggravating circumstances in order to penalize and to provide additional deterrence against a defendant to discourage similar conduct in the future." N.J.S.A. 2A:15-5.10.

The Model Jury charge on punitive damages contains a note recognizing that the Act may have "eliminated general deterrence of others as a basis for imposing punitive damages." Model Jury Charge (Civil) 6.20A, note 3. The note states that such purpose was "recognized under the common law, see, e.g., Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 48-49, 477 A.2d 1224 (1984)." Ibid. The note further stated, however, that "[u]ntil this issue is addressed at the appellate level, trial judges will need to decide whether it is permissible under the [Act] to charge the jury on deterrence of others and permit counsel to argue that theory of punitive damages to the jury." Ibid.

Plaintiff argues that several cases decided since the Act was passed in 1995 have confirmed that deterrence of others remains one of the purposes of punitive damages. In Baker, supra, 161 N.J. at 226-27, 736 A.2d 462, cited by plaintiff as an example, the Court stated "New Jersey courts have consistently adhered to the principle that punitive damages are meant to punish a wrongdoer's egregious conduct and to deter that wrongdoer and others from engaging in such conduct in the future." The Court went on and stated that "[t]o achieve that goal, our courts have held that it is the wrongdoer who is to be punished, and it is the wrongdoer (among others)

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whose future conduct is to be deterred." Ibid. See also e.g., Lockley v....