Heyne v. Nick's Am. Pancake & Café, Inc., Case No. 3:11-CV-305 JD

• Decision Date: 15 November 2013
• Docket Number: Case No. 3:11-CV-305 JD
• Parties: ANGELA HEYNE, et al., Plaintiffs, v. NICK'S AMERICAN PANCAKE AND CAFÉ, INC. and NICK KLADIS, Defendants.
• Court: U.S. District Court — Northern District of Indiana

ANGELA HEYNE, et al., Plaintiffs,
v.
NICK'S AMERICAN PANCAKE AND CAFÉ, INC. and NICK KLADIS, Defendants.

Case No. 3:11-CV-305 JD

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA SOUTH BEND DIVISION

ENTERED: November 15, 2013

OPINION and ORDER

On August 1, 2011, Plaintiffs Angela Heyne, Angela King, and Stacey DeVreese filed a complaint [DE 1], thereafter amended on September 16, 2011 [DE 12] and December 7, 2011 [DE 27] to omit class action allegations and to dismiss Defendants Jim Kladis and Zoi Kladis from the lawsuit. Plaintiffs alleged approximately twenty federal and state claims against their former employer Defendant Nick Kladis, as the owner and operator of Defendant Nick's American Pancake and Café, Inc. a/k/a American Pancake House involving discrimination, harassment, and retaliation under 42 U.S.C. § 1981, 42 U.S.C. § 2000(e) and Indiana law, as well as state law claims for assault, battery, negligent infliction of emotional distress, intentional infliction of emotional distress, and violation of Indiana Food Safety Standards [DE 27]¹. Ultimately, only fourteen of those claims were presented to the jury [DE 108]. Specifically, each plaintiff sought compensatory and punitive damages under Title VII for sexual harassment and under state law for claims of assault, battery, and intentional infliction of emotional distress (IIED). Id. In addition, Angela King claimed she was retaliated against in February 2010 when

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she was terminated for reporting sexual harassment and Stacey DeVreese claimed she was discriminated against in November 2010 when she was terminated because she was pregnant. Id. The case was transferred to the undersigned shortly before trial. At trial, the plaintiffs themselves asked the jury during direct examination to award them the amount they felt was appropriate given the evidence presented, but during closing arguments, plaintiffs' counsel specifically requested $675,000 in damages or $225,000 for each plaintiff (including punitive damages).

After the four day trial, the jury determined that Defendant Nick Kladis had both ownership and control over Defendant Nick's American Pancake and Café, Inc. at the times of the alleged offenses such that both defendants could be held liable [DE 108]. Relative to the plaintiffs' claims, the jury concluded that Stacey DeVreese failed to prove any of her claims. Id. Angela Heyne succeeded on all of her claims, but the jury awarded no damages whatsoever for her claims of assault and IIED, and gave her a punitive damages award of $10,000 for her Title VII sexual harassment claim and a punitive damages award of $2,000 for her battery claim. Id. The jury found Angela King failed to prove sexual harassment, assault, or IIED, but found that King successfully proved both her Title VII retaliation claim resulting in a $10,000 punitive damages award and her claim for battery resulting in a $2,000 punitive damages award. Id.

In sum, plaintiffs were successful on six of fourteen claims sent to the jury, representing an approximate success rate of 43%. Stacey DeVreese received nothing, while both Angela Heyne and Angela King each received $12,000 in punitive damages and zero compensatory damages. Ultimately, their total award of $24,000 equals only 3.5% of the total relief requested from the jury.

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After the jury's verdict, the parties filed various briefs and motions in support of their positions relative to the award of attorneys' fees, costs, and other relief, and these submissions have all been considered by the Court [DE 116-125; DE 128-132; DE 134; DE 136-139]. In addition, the Court held an evidentiary hearing on damages [DE 133], during which counsel were given an opportunity to state their respective positions. During that hearing, many agreements were reached relative to the proper calculation of damages, including back pay, and those agreements are incorporated herein.

I. Punitive Damage Awards

No one contests the punitive damages awarded by the jury. The jury awarded Heyne and King each $2,000 in punitive damages on their respective battery claim. See e.g., Fall v. Indiana University Bd. of Trustees 33 F.Supp.2d 729, 741-42 (N.D. Ind. 1998) (noting that under Indiana law, punitive damages for assault and battery must be supported by clear and convincing evidence, and the evidence must establish that the defendant acted with malice, fraud, gross negligence, or oppression which did not result from mistake of law or fact, honest error of judgment, over-zealousness, mere negligence or other human failing). The parties have agreed that under state law the punitive damage awards are split as directed under Ind. Code 34-51-3-6. That is, 25% goes to the successful plaintiff, while 75% goes to the victims compensation fund. The Court previously advised the parties that it would reduce any punitive damages award after the verdict [DE 96], and therefore Angela Heyne and Angela King shall each receive $500 plus post judgment interest for their respective successful battery claim, while the remaining $1,500 plus post judgment interest on each claim shall be paid to the victims compensation fund.

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Accordingly, Defendants Nick Kladis and Nick's American Pancake Café, Inc. are jointly and severally liable for the payment of $4,000 plus post judgment interest in punitive damages on the state law claims of battery to the clerk of the court, Ind. Code 34-51-3-6(b). The clerk of the court is DIRECTED to pay Angela Heyne and Angela King each 25% of their individual punitive damage award of $2,000 plus post judgment interest, and deposit the remaining 75% of each of the awards into the violent crime victims compensation fund established by Ind. Code 5-2-6.1-40, pursuant to Ind. Code 34-51-3-6(c).

Further, no one contests the individual awards of $10,000 for Heyne's verdict on her Title VII sexual harassment claim and King's verdict on her Title VII retaliation claim. See 42 U.S.C. § 1981a(b)(1) (indicating that a complaining party may recover punitive damages under this section if a party engaged in a discriminatory practice with malice or reckless indifference to the federally protected rights of an aggrieved individual). Accordingly, the Defendants Nick Kladis and Nick's American Pancake Café, Inc. are jointly and severally liable for the payment of $10,000 plus post judgment interest in punitive damages to each of the plaintiffs, Angela Heyne and Angela King, on their successful Title VII claims.

II. Back Pay on Title VII claims

Angela Heyne and Angela King's success on their Title VII claims opens the door to the recovery of back pay, 42 U.S.C. § 2000e-5(g)(1), and the parties agreed prior to the jury trial in this case that the Court would determine the appropriate amount of back pay. The Seventh Circuit has stated that a "district court has broad equitable discretion to fashion back pay awards to make the Title VII victim whole [and that] [o]nce the district court [finds] unlawful discrimination in violation of Title VII, there [is] a strong presumption that [a plaintiff is]

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entitled to a back pay award on the basis of what she would have earned absent the discrimination." E.E.O.C. v. Ilona of Hungary, Inc., 108 F.3d 1569, 1579 (7th Cir. 1997) (citations omitted). The Seventh Circuit has also directed that "the plaintiff has the burden of proving the damages caused [to] her [and that such] damages are determined by 'measuring the difference between actual earnings for the period and those which she would have earned absent the discrimination by defendant.'" Horn v. Duke Homes, 755 F.2d 599, 606 (7th Cir. 1985) (quoting Taylor v. Philips Indus., Inc., 593 F.2d 783, 786 (7th Cir. 1979)). Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable. 42 U.S.C. § 2000e-5(g). In determining the proper award of back pay, a court must make sure that any award is not speculative and does not put the plaintiff in a better position than she was before her termination. See Ilona, 108 F.3d at 1580 (relying on United States v. City of Chi., 853 F.2d 572, 575 (7th Cir. 1988) for the notion that "[t]he court must 'do its best to recreate the conditions and relationships that would have existed if the unlawful discrimination had not occurred'"). The defendant has the burden of demonstrating that a plaintiff who was unlawfully discharged did not make adequate efforts to mitigate her damages by securing other employment. Hutchison v. Amateur Elec. Supply, Inc., 42 F.3d 1037, 1044 (7th Cir. 1994) (in order to establish the affirmative defense of a plaintiff's failure to mitigate damages, the defendants must show that: (1) the plaintiff failed to exercise reasonable diligence to mitigate her damages, and (2) there was a reasonable likelihood that the plaintiff might have found comparable work by exercising reasonable diligence).

Much of the submissions by plaintiffs' counsel relative to the appropriate amount of back pay to be awarded relied on the anticipated expert testimony of Kevin Scullion who relied on the

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United States Bureau of Labor Statistics to determine the average wage of waitresses in the South Bend area during the relevant time. Plaintiffs' counsel initially claimed that Scullion's testimony was necessary because defendants failed to properly report Heyne and King's total compensation as reflected on their inaccurate W-2 forms. Plaintiffs' counsel represented...