Martin v. Perma-Chink Sys., Inc.

• Decision Date: 27 June 2016
• Docket Number: No. E2015-01466-COA-R3-CV,E2015-01466-COA-R3-CV
• Parties: PAUL M. MARTIN v. PERMA-CHINK SYSTEMS, INC.
• Court: Tennessee Court of Appeals

PAUL M. MARTIN v. PERMA-CHINK SYSTEMS, INC.

No. E2015-01466-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT KNOXVILLE

April 21, 2016 Session

JUNE 27, 2016

Appeal from the Circuit Court for Knox County

No. 330713

Deborah C. Stevens, Judge

This appeal arises from an age discrimination lawsuit brought under the Tennessee Human Rights Act ("THRA"). Paul M. Martin ("Martin") sued his former employer Perma-Chink Systems, Inc. ("Perma-Chink") in the Circuit Court for Knox County ("the Trial Court"). Martin alleged that he had been fired as a sales representative for Perma-Chink because of his age, then 60. The matter was tried before a jury, which returned a verdict in favor of Martin. Perma-Chink filed an appeal to this Court, and Martin raises his own issues on appeal. Perma-Chink argues, among other things, that the Trial Court erred in admitting a chart ("the Chart") containing raw data of employee ages at their date of termination, and that Martin failed to prove a prima facie case of age discrimination. We, inter alia, affirm the age discrimination judgment for Martin. However, we find error in the calculation of damages for back pay in that Martin's post-termination earnings were not taken into account, and we remand for the Trial Court to enter a remittitur in the amount of $20,219.05. Should Martin refuse this remittitur, Martin may opt for a new trial. We find further that under the THRA Martin is entitled to an award of attorney's fees and litigation expenses incurred on appeal, and we remand for the Trial Court to determine a reasonable award of attorney's fees and litigation expenses for Martin. The judgment of the Trial Court is affirmed as modified.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed as Modified; Case Remanded

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which JOHN W. MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.

Robert R. Carl and Ashley Meredith Lowe, Knoxville, Tennessee, for the appellant, Perma-Chink Systems, Inc.

Richard T. Scrugham, Jr., Knoxville, Tennessee, for the appellee, Paul M. Martin.

OPINION

Background

In June 2013, Martin sued Perma-Chink in the Trial Court under the THRA alleging age discrimination in his termination. Perma-Chink is a business that manufactures flexible chinking and preservation products for log homes. Martin was 56 when he was hired by Perma-Chink to be a sales representative. He was 60 when he was fired. Perma-Chink filed an answer in opposition. Perma-Chink also filed a motion for summary judgment, which was denied. This case was tried before a jury in February 2015.

Martin, age 62 at trial, testified. In May 2008, Martin, then age 56, was hired by Perma-Chink as an outside sales representative. Martin had spent decades in sales before taking this new job. Martin described his job at Perma-Chink: "Outside salespeople, we were actually given a car, and that was to try to do a lot of traveling. We actually called face-to-face on the customer and would go out to job sites where log homes were being built and just things like that. We had contact." Martin originally was assigned a massive territory encompassing Arkansas, Kansas, Oklahoma, Louisiana and Texas. In 2009, Tennessee was added to Martin's territory.

Martin testified as to the leadership at Perma-Chink. Rick Webb ("Webb"), then national sales manager, was his direct supervisor. Webb in turn reported to a "management team," consisting of Terry Hofrichter, Tony Huddleston, and Randy Adamson. Huddleston and Martin were based in Knoxville. Adamson and Hofrichter were based in Redmond, Washington. Perma-Chink's owner, Rich Dunstan, was based in Redmond, as well. According to Martin, Adamson actually ran the company, and he was fixated on cutting costs by all means.

Martin described his feelings about his job: "Perma-Chink was a great company to work for. I enjoyed my job. The customers were easy to call on, they were great guys, and so I had no trouble doing the extra." Martin testified to his sales style:

My style is more of a personal selling style. I'm not a high-pressure kind of guy. I go out and develop a relationship with a customer, get to kind of know them, get to kind of know their needs, and then will kind of develop the honesty and their trust in me.

And then at that point I feel that I can go out and, you know, try to sell them and gradually work products into the -- into the mix of things. And it's just worked very good for me.

Martin testified that he received an "A" rating in 2012 from Webb.

However, problems began to develop for Martin. In August 2012, Perma-Chink instituted a new training program called Sandler for its outside sales staff. The parties at trial and on appeal dispute the degree to which Martin resisted learning the new sales system and whether his effectiveness declined. Martin testified to issues surrounding Sandler, as well as his performance at Perma-Chink around this time, as follows:

Q. All right. It says "The plaintiff's supervisors, including Mr. Huddleston and Mr. Webb, have attempted to work with the plaintiff to improve his performance with respect to planning, expense management, and sales skills, among other things." How do you respond to that?

A. Well, I had a talk with Tony. Tony Huddleston is kind of a - he's a very laid-back guy. He's a great guy. But he's the kind of guy that if you want to find Tony, you're probably going to find him in the warehouse drinking a cup of coffee and smoking a cigarette. That's just Tony's style. Everybody likes Tony because he's laid back, he's not demanding. Like I said, he's a great guy.

So when this says this makes you think that we had a meeting, well, it wasn't that way. You kind of walk up to Tony if I was picking up some product and say, "Hey, Tony, how are you doing?" and Tony would be sitting there, and we all kidded around with each other.

And so this thing here was that this never happened. They didn't attempt to work with me because the person that would have worked with me would have been Rick. And Rick never worried about it. He didn't take it serious. I even asked him about one time about the different aspects of this system, and he said "I don't know. It's just something that management has come up with."

So there was no attempt to work with me on managing my performance to plan, with the exception of saying, "You need to plan better."

I talked to Tony about planning, because I didn't put a lot of detail in my calls. I would write down, "Went down to Satterwhite Sales, met with Blake or Sam Satterwhite, the owner. We talked about screws, whatever."

And I said, "Well, what do you want me to say?" and Tony's actual response was, "You need to learn to lie better. You need to learn to just put things on there and satisfy Randy's curiosity or demand for detail."

Martin acknowledged that his sales declined, but stated that was because of certain factors beyond his control. Martin also denied that he had been uncooperative regarding the new sales system. In mid-2012, Martin began to suffer medical issues, some related to his back. As to Perma-Chink's expressions of concern about his performance, Martin testified:

Q. They didn't mention planning until 2012?

A. Basically, it was "You need to plan better. Randy is looking at your reports, and we need to get more detail."

Q. You can remember that happening once?

A. Yes.

Q. No sit-down meeting, no formal disciplinary, "You need to get better at that?"

A. Absolutely not. The meeting with Tony was standing at the warehouse while he was drinking a cup of coffee. And we would say things back and forth, just like general talk.

Q. You never heard the "P" word, "probation?"

A. Absolutely not. That would have devastated me, because I loved my job and I did the best I could do. If Rick would have said "probation" I would have been devastated, because he told me that I was doing everything good.

Q. If Rick comes into court and says he told you you were on probation, how would you respond?

A. That's a lie. That's not true.

Martin was fired in December 2012. Webb delivered the news to Martin at a meeting at a McDonald's restaurant. Webb told Martin that the company had decided to go in a different direction. An existing outside sales representative, Paul Peebles, took over Martin's territory. Martin, meanwhile, began to earn additional income from a nut roasting business he had opened while still at Perma-Chink.

Martin testified as to why he believed age was the reason for his termination:

Because when you look back at all the -- my four and-a-half years, I had nothing but good reviews. I was given the third year I was there, I believe it was, I was given the largest pay raise of all the salespeople. They gave me the territory, they entrusted me with the most important territorythat the company had at the time. And that I had had nothing but good reviews and positive feedback.

There was no reason whatsoever, any, that I had done anything wrong -- and that came directly from my boss, Rick Webb -- to be fired. And so -- but during the time I was starting to deal with some medical problems, and of course that was going to be -- you know, with your age, you don't get -- lots of times you don't get healthier, you have future more problems as you get older. And I just think at the time that I went from being an asset to a liability.

And even with Rick Webb, because he kept telling me, "I don't know why they did this." It just makes me think that I was the second-to-oldest salesperson with a very large territory, and so I think it had to have something to do with my age.

Martin acknowledged that Huddleston, who had hired him and also later had a role in his termination, was older than him.

Adamson, Perma-Chink's corporate controller, testified. The Chart was introduced at this point. The Chart had been prepared by Perma-Chink in response to Martin's interrogatories and was admitted as Exhibit 30. The Chart revealed that during the period Martin worked for Perma-Chink,...