Clark v. Haas Group, Inc.

• Decision Date: 15 January 1992
• Docket Number: 90-1362,Nos. 90-1353,s. 90-1353
• Citation: 953 F.2d 1235
• Parties: 57 Fair Empl.Prac.Cas. (BNA) 1276, 58 Empl. Prac. Dec. P 41,245, 60 USLW 2527, 120 Lab.Cas. P 35,585 Shirley CLARK, Plaintiff-Appellee, v. HAAS GROUP, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1235

953 F.2d 1235

57 Fair Empl.Prac.Cas. (BNA) 1276,

58 Empl. Prac. Dec. P 41,245, 60 USLW 2527,

120 Lab.Cas. P 35,585

Shirley CLARK, Plaintiff-Appellee, v. HAAS GROUP, INC., Defendant-Appellant.

Nos. 90-1353, 90-1362.

United States Court of Appeals Tenth Circuit.

Jan. 15, 1992.

Richard C. LaFond and Jay R. Khandke of Denver, Colo., for plaintiff-appellee.

James J. Thomas, II and David L. Balser of Long, Aldridge & Norman, Atlanta, Ga., for defendant-appellant.

Before McKAY, Chief Judge, BARRETT and BRORBY, Circuit Judges.

BARRETT, Senior Circuit Judge.

Haas Group, Inc. (HGI) appeals from the judgment entered in favor of Shirley Clark (Clark) and two orders of the district court denying its motions for summary judgment and for judgment notwithstanding the verdict, a new trial, or remittitur.

HGI is in the business of publishing and distributing apartment guides in approximately forty cities. HGI sells advertising in its guides to various apartment owners. The guides are distributed free of charge to the public by placing them in various retail outlets including supermarkets and convenience stores.

Clark, then age 49, was employed with HGI on January 11, 1984. She worked for HGI until October 31, 1986. During her employment with HGI, Clark worked as a distribution co-manager, distribution manager, and assistant regional distribution supervisor. Clark's work included, but was not limited to, delivery of the guides, promotion of the guides, overseeing and implementing all areas of distribution of the guides, and coordinating with the home office.

HGI fired Clark, then fifty-one years of age, on October 31, 1986, citing nonperformance of job duties, refusal to do assigned work, neglect in turning in travel reports, and failure to follow up on correspondence with King Soopers, nearly resulting in the loss of the account. Several months later, Clark went into the magazine distribution business as self-employed until June, 1988.

Clark sued HGI in the federal district court for the District of Colorado on May 18, 1987, under the Fair Labor Standards Act, 29 U.S.C. § 216(b), to recover unpaid overtime compensation, liquidated damages, and attorney's fees and costs. The parties subsequently filed a stipulated motion to dismiss Clark's action with prejudice. On July 27, 1988, the court entered an order dismissing the action with prejudice, directing the parties to bear their own costs.

In July, 1988, Clark went to work as an assistant distribution manager for HGI's only competitor in Denver, Colorado, at a salary of $18,000.00 per year. On November 1, 1988, Clark was promoted to distribution manager at a salary of $25,000.00 per year. She was terminated three and one-half months later.

On October 31, 1988, Clark filed the instant suit against HGI in the same federal district court in which she had filed her first suit. Her complaint was identical to her complaint in the first suit insofar as it was predicated exclusively on her employment at HGI from January 11, 1984, through October 31, 1986. Clark asserted two claims, i.e., (1) that HGI had deprived her of equal pay under the Equal Pay Act, 29 U.S.C. § 206(d),and (2) that HGI had discriminated against her because of her age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. She sought damages in the form of back pay, front pay, liquidated damages, attorney fees and costs.

Within her complaint, Clark alleged that HGI had paid her "at a rate less than the rate [HGI] paid males for work performance requiring equal skill, effort, and responsibility, and performed under similar working conditions," (Addendum, Part One, Tab 4 at p. 6), and that HGI's "acts, conduct, and practices ... constitute[d] age-based discrimination against [her] with respect to her compensation, terms, conditions and/or privileges or employment in violation of [ADEA]." Id. at p. 10.

HGI moved for summary judgment, alleging that the doctrine of res judicata barred Clark's suit. In denying HGI's motion, the court found:

The doctrine of res judicata prohibits a party from asserting in a second lawsuit any matter that might have been asserted in the first lawsuit. Prospero Associates v. Burroughs Corp., 714 F.2d 1022, 1025 (10th Cir.1983). In order for the doctrine to apply, three elements must be present: (1) the first suit must have proceeded to a final judgment on the merits; (2) the parties must be identical or in privity; and (3) the suits must be based on the same cause of action.

Here the first two elements are present.... The court concludes, however, that the two suits are not based on the same cause of action.

The Tenth Circuit Court of Appeals in Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 1329 (10th Cir.1988) adopted the transactional approach, advocated by the Restatement (Second) of Judgments § 24 (1982), to the third element. This pragmatic approach requires the Court to take into account three factors: 'whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or useage.' Restatement § 24(2). In determining trial convenience, the court shall examine to what extent the witnesses or proofs in the second action tend to overlap the witnesses or proofs in the first action. Restatement § 24, comment b.

In the first lawsuit, plaintiff sued only for unpaid overtime compensation. However, in the case at bar, the wrong asserted is the alleged discrimination against plaintiff. In applying the factors of the Restatement, it appears that the first factor is not met, since the facts needed to prove a charge of discrimination are very different in motivation and origin from the facts needed to prove the overtime compensation charge. Furthermore, the second factor is not present. The proof, if not the witnesses, in the second lawsuit will be quite different from that in the first lawsuit. Plaintiff will have to go through the more complex methods of proving sex and age discrimination.

(Addendum, Part One, Tab 5 at pp. 2-3).

Prior to trial, the parties filed a stipulated motion to dismiss Clark's Equal Pay Act claim. The district court subsequently entered an order dismissing the claim with prejudice. Thereafter, Clark's case proceeded to trial solely on her ADEA claim. The jury returned a verdict awarding Clark $65,533.00 in back pay and $598,226.00 in front pay. The district court also awarded Clark attorney fees of $33,019.50. HGI's motions for judgment notwithstanding the verdict, a new trial, or remittitur were denied.

On appeal, HGI contends that the court erred in: deciding that Clark's claim was not barred by res judicata; deciding that front pay could be awarded even though Clark had obtained a replacement job at a higher salary prior to trial; allowing the jury to determine the amount of front pay to be awarded; instructing the jury with respect to front pay.

HGI also contends that: the amount of the jury's front pay award was not supported by the evidence; the jury's back pay award was not supported by the evidence; the court erred in admitting Clark's written calculations of purported lost wages; the court erred in denying its motion for a new trial, or, in the alternative, remittitur; and the award of attorney fees should be reversed. Because of its dispositive nature, our discussion will be limited to HGI's contention that Clark's instant action was barred by res judicata.

As set forth, supra, the district court denied HGI's motion for summary judgment based on res judicata after finding that "the two suits are not based on the same cause of action" and "the facts needed to prove a charge of discrimination are very different in motivation and origin from the facts needed to prove the overtime compensation charge."

In reviewing a grant of summary judgment we utilize the same standard that the district court employs. Metro Oil v. Sun Refining & Marketing Company, 936 F.2d 501, 503 (10th Cir.1991). We view the evidence most favorably to the nonmoving party to ascertain whether a genuine issue of fact exists; we review legal questions de novo. Merrick v. Northern Natural Gas Co., 911 F.2d 426, 429 (10th Cir.1990). We also review de novo a district court's order denying a motion for judgment notwithstanding the verdict, applying the same standard applied by the district court. Heyen v. United States, 945 F.2d 359, 362 (10th Cir.1991). A district court's conclusions as to res judicata are conclusions of law and reviewable de novo. N.A.A.C.P. v. Hunt, 891 F.2d 1555, 1560 (11th Cir.1990).

Res judicata generally applies where there is an identity of parties and of claims and a final judgment on the merits. Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1520 (10th Cir.1990). It is designed to ensure the finality of judicial decisions. Brown v. Felsen, 442 U.S. 127, 131, 99 S.Ct. 2205, 2209, 60 L.Ed.2d 767 (1979). Under the doctrine of res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action. Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981); Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308 (1980); Northern Natural Gas Company v. Grounds, 931 F.2d 678, 681 (10th Cir.1991) (Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action); Sil-Flo, Inc. v. SFHC, Inc., supra. "Stated alternatively", under the doctrine of res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action. May v. Parker-Abbott Transfer and Storage, Inc., 899 F.2d 1007, 1009 (10th Cir.1990), quo...