Cox v. Crown CoCo, Inc., No. C2-95-1834

• Court: Court of Appeals of Minnesota
• Writing for the Court: NORTON
• Citation: 544 N.W.2d 490
• Docket Number: No. C2-95-1834
• Decision Date: 05 March 1996
• Parties: Sally (Pratt) COX, Respondent, v. CROWN COCO, INC., et al., Appellants.

Page 490

544 N.W.2d 490 Sally (Pratt) COX, Respondent,
v.
CROWN COCO, INC., et al., Appellants. No. C2-95-1834. Court of Appeals of Minnesota. March 5, 1996.

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Syllabus by the Court

1. When a case involves conflicting evidence presented at trial, this court defers to the jury's opportunity to observe the evidence and witnesses and weigh their credibility and will not overturn the judgment unless the jury's verdict is manifestly contrary to the evidence.

2. To prevail in a retaliatory discharge case, a plaintiff must show that it is more

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likely than not that the employer's discharge decision was based upon an impermissible reason, even if the employer has also offered a legitimate reason for its decision.

3. When an employer publishes a defamatory statement, which is based upon suspicion or allegation of an employee's wrongdoing, without first investigating the allegations and confronting the employee, the employer lacks reasonable cause to believe the statements are true and, thus, is not entitled to a qualified privilege.

4. Damages for pain and suffering should not be reduced to present value.

5. When a party is entitled to postjudgment interest on attorney fees, interest accrues from the date the court ordered that the party was entitled to those fees.

Appeal from the District Court, Aitken County; John R. Solien, Judge.

Don L. Bye, Duluth, Aaron R. Bransky, Halverson Watters, Downs, Reyelts & Bateman, Ltd., Duluth, for Respondent.

Gregg J. Cavanagh, Leonard, Street and Deinard, Minneapolis, for Appellants.

Considered and decided by NORTON, P.J., and LANSING and FOLEY ^*, Judges.

OPINION

NORTON, Judge.

Appellants challenge a judgment holding them liable for retaliatory discharge and defamation. The trial court denied appellants' motion for judgment notwithstanding the verdict or a new trial. We affirm.

FACTS

Respondent Sally Cox brought this action against her former employer, appellant Crown CoCo, Inc., and her former supervisor, appellant Alice Lindstrom, alleging retaliatory discharge and defamation. Cox alleged that her discharge violated the Minnesota whistleblower statute and the Minnesota Occupational Safety and Health Act. See Minn.Stat. §§ 181.932 (whistleblower), 182.669 (MOSHA) (1992).

Crown CoCo is a Minneapolis corporation that operates E-Z Stop gas stations/convenience stores in Minnesota, Michigan, and Wisconsin. Lindstrom works as a regional manager for Crown CoCo. Cox began working for Crown CoCo as an assistant manager in November 1991. In September 1992, Cox became the manager of the E-Z Stop in Aitkin. Cox reported directly to Lindstrom.

On March 16, 1993, malfunctioning furnaces began emitting a fuel oil smell into the store. Unable to contact Lindstrom, Cox called Crown CoCo's maintenance director, who suggested she call a local heating contractor to investigate the problem. Although the contractor thought he had found the problem with one of the furnaces and had resolved it temporarily, the noxious fumes were even worse the next day, March 17. The fumes made Cox and other employees ill at work; by 10:30 a.m., Cox left work to seek medical attention. She did not return to work until March 23.

In Cox's absence, the assistant manager, Cheryl Kehn, called in a second heating contractor, who eventually discovered that the furnace needed to be replaced. The contractor turned off the furnace and told the employees that he could not restart it. Crown CoCo refused to close the store, despite the lack of heat. Lindstrom suggested that employees run the furnace intermittently and provided two space heaters to keep the store warm until the new furnace could be installed on April 1, 1993. Lindstrom also ordered employees to open the deli and serve food in spite of the fact that the health inspector directed her to close the deli and dispose of all food potentially tainted by the fumes.

Cox told Crown CoCo officials and other employees on March 17 that she believed the store to be unsafe because of the fumes. Lindstrom told employees that Cox was taking the problem "too seriously." Cox also discussed her concerns with the Minnesota

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Occupational Safety and Health Administration (MOSHA). Then, on March 19, she filed a confidential written complaint with MOSHA concerning the potential health and safety violations at the E-Z Stop. MOSHA then contacted Crown CoCo about the complaint. Cox claims that Crown CoCo then terminated her employment because she reported these potential violations.

In contrast, Crown CoCo claims to have terminated Cox because of her performance, and claims to have made that decision before the furnace problem arose. Crown CoCo's director of finance, Domenic Losurdo, testified at trial that audit reports showed $5,328 in shortages in the till during Cox's six-month assignment at the Aitkin store. Losurdo considered the shortages to be a sign of possible theft and misrung sales. From the recurring shortages, Losurdo concluded that the manager, Cox, "could not control the store."

Losurdo testified that, after discussing the audits with senior area manager Bob Gumatz on March 13, they concluded that they "needed to make a change in the manager at the Aitkin store." All of the area managers discussed the audits at the regularly scheduled operations meeting on March 15 and agreed to change the manager at the Aitkin store. Losurdo testified that, as of that March 15 meeting, Crown CoCo had decided to terminate Cox; that issue was never considered again. Before Lindstrom could fire Cox, however, the furnace incident occurred and put Cox on sick leave until March 23. When Cox returned to work, Lindstrom terminated her.

At trial, Cox also claimed that Lindstrom defamed her by telling other E-Z Stop employees that Cox had slashed her tires after she had been fired. According to the testimony of Cox's witnesses, Lindstrom told three employees that they should move their cars from the side of the building, because "Sally had slashed her tires." The employees testified that Lindstrom repeatedly made these accusations throughout the day.

At the conclusion of trial, the jury returned a verdict for Cox on all claims, awarding her $25,000 for past economic loss, $30,000 for future economic loss, $50,000 for past emotional distress, $20,000 for future emotional distress, and $25,000 for harm to her reputation and mental distress, humiliation and embarrassment. The court denied Crown CoCo's motion for judgment notwithstanding the verdict (JNOV) or a new trial, awarded Cox $31,562.50 in attorney fees, and added pre- and post-verdict interest to the judgment.

ISSUES

1. Did the trial court err in denying JNOV on the retaliatory discharge claim?

2. Did the trial court properly instruct the jury on the burden of proving retaliatory discharge?

3. Did the trial court err in ruling that Lindstrom was not entitled to a qualified privilege?

4. Did the trial court abuse its discretion by allowing Cox to present rebuttal testimony?

5. Did the trial court err in ruling that the damages awarded by the jury were not the product of sympathy or prejudice?

6. Did the trial court abuse its discretion in creating the special verdict form?

7. Did the trial court err when it ruled that comments of Cox's counsel did not warrant a new trial?

8. Did the trial court abuse its discretion when it instructed the jury about discounting future damages to present value?

9. Did the trial court abuse its discretion in awarding attorney fees?

10. Did the trial court err in awarding preverdict interest on damages and postjudgment interest on attorney fees?

ANALYSIS

Crown CoCo asserted several grounds for judgment notwithstanding the verdict (JNOV) or a new trial. The trial court denied the motion in its entirety. In reviewing the denial of JNOV, this court must affirm if the record contains "any competent evidence reasonably tending to sustain the verdict." Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn.1984).

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A motion for judgment notwithstanding the verdict admits every inference reasonably tending to be drawn from the evidence as well as the credibility of the testimony for the adverse party. Unless we are able to determine that the evidence is practically conclusive against the verdict, or that reasonable minds could reach but one conclusion against the verdict, the trial court's order denying the motion for judgment notwithstanding the verdict should stand.

Seidl v. Trollhaugen, Inc. 305 Minn. 506, 507, 232 N.W.2d 236, 239 (1975).

1. Prima facie case of retaliatory discharge

Crown CoCo alleges that the trial court erred in denying JNOV, because Cox has failed to establish a prima facie case of retaliatory discharge. When evaluating retaliatory discharge claims, Minnesota courts apply the three-step test set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Graham v. Special Sch. Dist. No. 1, 472 N.W.2d 114, 119 n. 7 (Minn.1991); Hubbard v. United Press Int'l, 330 N.W.2d 428, 444 (Minn.1983).

To establish a prima facie case of retaliation, Cox must show:

1) statutorily-protected conduct by the employee; 2) adverse employment action by the employer; and 3) a causal connection between the two.

Hubbard, 330 N.W.2d at 444. Cox has established the second factor; her termination is the basis of this suit. The two remaining factors are at issue.

At trial, Cox contended that Crown CoCo fired her because she reported the company's possible violation of the Minnesota Occupational Safety and Health Act, Minn.Stat. § 182.669 (1992) (MOSHA). She argued that such retaliation violated both MOSHA and the Minnesota whistleblower statute, Minn.Stat. § 181.932 (1992).

MOSHA provides:

Any employee believed to have been discharged or otherwise discriminated against by any person because such employee has exercised any right authorized under the provisions of sections 182.65 to 182.674 may, within 30 days after...