Phelps v. Commonwealth Land Title Ins. Co.

• Decision Date: 23 August 1994
• Docket Number: No. C9-94-24,C9-94-24
• Citation: 520 N.W.2d 748
• Parties: 3 A.D. Cases 1007, 5 NDLR P 449 Geraldine PHELPS, Respondent, v. COMMONWEALTH LAND TITLE INSURANCE COMPANY, Appellant.
• Court: Minnesota Court of Appeals

Page 748

520 N.W.2d 748

3 A.D. Cases 1007, 5 NDLR P 449

Geraldine PHELPS, Respondent, v. COMMONWEALTH LAND TITLE INSURANCE COMPANY, Appellant.

No. C9-94-24.

Court of Appeals of Minnesota.

Aug. 23, 1994.

Review Granted Nov. 16, 1994.

Syllabus by the Court

Compensatory damages for an unfair discriminatory practice may be increased up to three times actual damages under Minn.Stat. Sec. 363.071, subd. 2 (1992), without a specific finding that actual damages are inadequate.

Elizabeth H. Martin, Michael R. Docherty, Doherty, Rumble & Butler, St. Paul, for appellant.

William A. Moeller, Gislason, Dosland, Hunter & Malecki, New Ulm, for respondent.

Considered and decided by DAVIES, P.J., and LANSING and FORSBERG, JJ.

OPINION

LANSING, Judge.

In an action brought under the Minnesota Human Rights Act, Minn.Stat. Sec. 363.03, subd. 1 (1992), the district court found unfair age and disability discrimination and ordered damages. We find no error in the court's application of the evidentiary burdens and the evidence supports the finding of discrimination. We also affirm the court's calculation of damages and hold that the court acted within its discretion in doubling the actual damages.

FACTS

Geraldine Phelps worked as a receptionist for Commonwealth and its predecessor, Title Services, Inc., from 1977 until May 1992. Phelps testified that in addition to financial remuneration, her job was a source of personal fulfillment and she intended to work at Commonwealth until age seventy.

Phelps suffers from recurrent episodes of depression, requiring periods of hospitalization and treatment with medication and electroshock therapy. In February 1992 Phelps began a medical leave of absence from Commonwealth, as a result of depression and medical complications requiring hospitalization. Commonwealth rotated employees from three other departments to cover the receptionist's duties.

In late March or early April 1992, Commonwealth's branch manager in charge of personnel decisions twice telephoned Commonwealth's employment manager to discuss Phelps' absence. During these conversations they discussed the fact that Phelps would turn sixty-five in September 1992.

On May 4 Commonwealth hired Kris Gabbard as a receptionist. Gabbard was twenty years old when she began working for Commonwealth. The parties dispute whether Gabbard was hired as a temporary or a regular, full-time employee.

On May 26 Phelps returned to work. Later that morning Reichow informed her that she was terminated because her receptionist position had been filled by Gabbard. Phelps filed for unemployment compensation benefits and unsuccessfully sought other work. Her depression increased and she required additional medication. She moved to Waseca, Minnesota to stay with her daughter. In July she was rehospitalized for additional electroshock therapy treatments.

ISSUES

I. Are the district court's findings of fact clearly erroneous?

II. Did the district court misapply the evidentiary burdens when finding age and disability discrimination?

III. Did the district court err in calculating damages or in doubling Phelps' compensatory damages in the absence of a specific finding that Phelps would not be adequately compensated by an award of actual damages?

ANALYSIS

I

In concluding that Phelps proved age and disability discrimination, the district court relied on key findings about Commonwealth's policies and actions that are disputed by Commonwealth. On appeal we will uphold the district court's findings unless they are clearly in error. See Feges v. Perkins Restaurants, 483 N.W.2d 701, 711 (Minn.1992).

According to Commonwealth's employee handbook, Phelps could be terminated following a medical leave if her position had been filled by a "regular, full-time employee." The district court found that Gabbard was hired as a temporary employee, and not as a regular, full-time employee, during Phelps' leave of absence. Commonwealth argues that Gabbard was hired as a regular full-time employee during Phelps' absence. Although there is some evidence to support Commonwealth's argument, there is ample evidence in the record supporting the district court's finding that Gabbard was a temporary employee. We particularly note that Gabbard did not complete an employment application, an employee data sheet, or an employment eligibility verification form until after Phelps was discharged.

Commonwealth also argues that the findings of fact were distorted by the district court's improper interpretation of Commonwealth's employee handbook. Commonwealth asserts that the court incorrectly concluded that a "probationary" employee was a "temporary" employee. The record does not support this hypothesis. The court cited the different provisions in the handbook governing temporary employees, probationary employees, and regular full-time employees. The court specifically found that Gabbard was a temporary employee, and did not become a full-time employee, subject to a ninety-day probationary period, until after Phelps had been discharged.

II

Relying on St. Mary's Honor Ctr. v. Hicks, --- U.S. ----, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993), Commonwealth asserts that the district court misapplied the evidentiary burdens when determining that Commonwealth discharged Phelps because of her age and disability, and not for other, legitimate, reasons. In Hicks the Supreme Court addressed the burden of each party after a plaintiff has established a prima facie case of discrimination:

"[T]he defendant must clearly set forth * * * reasons for its actions which, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the employment action. * * * [But] 'the ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff * * *.' "

Id. at ----, 113 S.Ct. at 2747 (emphasis omitted).

The Minnesota Supreme Court has not specifically addressed whether Hicks amplifies a plaintiff's burden of proving discrimination under the Minnesota Human Rights Act. The district court prudentially addressed Phelps' claims under both Hicks and current Minnesota law. The court specifically stated that Commonwealth had presented legitimate, nondiscriminatory reasons for discharging Phelps. The court, however, found those reasons to be unbelievable. In addition, the court found that Commonwealth intentionally discriminated against Phelps.

The record contains evidence supporting the finding of intentional discrimination. First, even if the receptionist position had not been filled by a regular, full-time employee at the time Phelps returned to work, it is equally significant for purposes of proof of discriminatory intent that the branch manager represented to Phelps that the job had been filled and there was no longer an opening.

Second, the record indicates that it was Commonwealth's policy to retain the most qualified person for a job. Commonwealth admitted that Phelps was more qualified for the receptionist position than Gabbard. But the branch manager testified that Commonwealth decided to keep Gabbard as the receptionist without checking her employment file.

Third, the undisputed evidence shows that the two telephone conversations between the branch manager and the employment manager included discussions about Phelps' age. Documentation of the telephone conversations indicates the notation "65," a reference to Phelps' age.

Fourth, the branch manager admitted in her deposition that she had...