Smith's Food & Drug Centers, Inc. v. Bellegarde

• Decision Date: 28 May 1998
• Docket Number: No. 27883,27883
• Citation: 958 P.2d 1208,114 Nev. 602
• Parties: SMITH'S FOOD & DRUG CENTERS, INC., Appellant, v. Argentine BELLEGARDE, Respondent.
• Court: Nevada Supreme Court

Page 1208

958 P.2d 1208

114 Nev. 602

SMITH'S FOOD & DRUG CENTERS, INC., Appellant, v. Argentine BELLEGARDE, Respondent.

No. 27883.

Supreme Court of Nevada.

May 28, 1998.

Barker, Gillock, Koning & Brown and Jerry S. Busby, Las Vegas, for Appellant.

Sabbath & Associates, Chtd., Las Vegas, for Respondent.

OPINION

PER CURIAM.

This is an appeal from an order denying appellant's motion for judgment notwithstanding jury verdict or, in the alternative, for new trial. The primary claim of error is addressed to the district court's refusal to strike an award of punitive damages against a corporate defendant where the jury failed to impose punitive liability on corporate employees. We affirm.

FACTS

On October 19, 1989, respondent Argentine Bellegarde ("Bellegarde"), a twenty-four year old Haitian immigrant, was accused of shoplifting by employees of a Smith's Food & Drug Center ("Smith's") in Las Vegas. The store in question was the nationwide leader among Smith's outlets in shoplifting losses. Sheila Holoubek ("Holoubek"), normally a "key manager" in charge of cashiers, was acting as temporary store manager at the time of the incident. Holoubek was not formally trained in company procedures for detecting and handling shoplifters. Prior to assuming her responsibilities on the day in question, her only instructions had been to inform a "manager" upon observation of shoplifting activity.

At some point during her shift, Holoubek thought she saw Bellegarde place a pack of chewing gum in her purse. About forty-five minutes later, Holoubek, a security guard and several "box boys" confronted Bellegarde in the parking lot of the store, at which time Holoubek requested permission to search Bellegarde's purse. Bellegarde, who was accompanied by a friend, agreed on the condition that police be called to witness the search. Bellegarde and the friend were then escorted to an upstairs office inside the store.

Although police initially refused Holoubek's request to respond to the scene, the dispatcher instructed Holoubek to search the purse and call back if the package of chewing gum was located. During this time, Bellegarde's friend left the room to make a separate call to the authorities. Bellegarde remained behind in the room with Holoubek, the security guard and two other Smith's employees, Brett Wood ("Wood") and Robert Peterson ("Peterson"). The security guard, Jeffrey Qualls ("Qualls"), then attempted to take the purse from Bellegarde, who was sitting in a chair with the purse clutched to her body. Encountering resistance, Qualls sprayed Bellegarde with pepper spray and then, along with Wood and Peterson, placed her in handcuffs.

The chewing gum was never found. A second call to police resulted in their formal intervention, after which Qualls attempted to remove the handcuffs. Because the key to the handcuffs became jammed in the lock, a locksmith was required to effect removal. Bellegarde was then taken by ambulance to a local hospital for treatment of an irritated left eye and a swollen wrist.

Bellegarde originally brought suit solely against Smith's, in which she lodged claims of assault and battery, false imprisonment, unlawful detention, violations of NRS 598.030(3), intentional infliction of emotional distress, slander per se, negligence and negligent infliction of emotional distress. The district court subsequently allowed Bellegarde to amend her complaint to add Qualls, Holoubek, Peterson and Wood as party defendants. Claims for punitive damages were lodged against each of the individual defendants and the corporation.

During trial, Bellegarde dropped her causes of action alleging violations of NRS 598.030(3), slander per se, negligence, and negligent infliction of emotional distress. The claims ultimately presented to the jury were restricted to those involving intentional misconduct.

The jury returned verdicts of $500.00 in compensatory damages against each defendant. By special interrogatory as to whether the conduct of the defendants, or any of them, warranted the imposition of punitive damages, the jury determined that the claim for punitive liability should go forward only as to Smith's. See NRS 42.005. Thus, the jury refused to consider the claim against the individual defendants.

Smith's objected to the special verdict findings on the ground that the imposition of punitive liability against a corporate principal could not be reconciled with the exoneration of the employees who were implicated in the alleged malicious conduct. The district court denied Smith's request for renewed deliberations to resolve the inconsistency or for entry of judgment notwithstanding the verdict.

Following bifurcated proceedings, the jury awarded punitive damages against Smith's in the amount of $65,000.00. The district court thereafter denied a renewed motion for judgment notwithstanding the verdict or, in the alternative, for new trial. Smith's appeals.

DISCUSSION

Standard of Review

On review of a denial of a motion for judgment notwithstanding the verdict, this court will view the evidence "in a light most favorable to the nonmovant, and that party must be given the benefit of every reasonable inference from any substantial evidence supporting the verdict." NEC Corp. v. Benbow, 105 Nev. 287, 290, 774 P.2d 1033, 1035 (1989). Further, "[t]he decision to grant or deny a motion for a new trial rests within the sound discretion of the trial court and will not be disturbed on appeal absent palpable abuse." Pappas v. State, Dep't Transp., 104 Nev. 572, 574, 763 P.2d 348, 349 (1988).

Legal Foundation to Sustain the Award of Punitive Damages Against Smith's

We are asked to decide whether, as a matter of law, a jury's specific refusal to impose punitive liability against corporate employees implicated in malicious or oppressive conduct forecloses punitive liability against the corporate employer.

Punitive damages under NRS 42.005 may be awarded when "it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud or malice, express or implied." The trial court is responsible to determine, as a matter of law, whether the plaintiff has offered substantial evidence of malice, in fact, to support a punitive damage instruction. Wickliffe v. Fletcher Jones of Las Vegas, 99 Nev. 353, 356, 661 P.2d 1295, 1297 (1983). Thus, the district court is charged in the first instance with determining whether instructions on punitive damages are warranted. Nevada Cement Co. v. Lemler, 89 Nev. 447, 451, 514 P.2d 1180, 1182 (1973).

Once instructed, the jury is not required to award punitive damages, even if it finds that a defendant's acts were oppressive or malicious. Such awards lie solely within the discretion of the jury. See Nevada Cement, 89 Nev. at 451, 514 P.2d at 1182. We will not disturb an award of punitive damages unless the trial record lacks substantial evidence to support it. First Interstate Bank v. Jafbros Auto Body, 106 Nev. 54, 56, 787 P.2d 765, 766 (1990).

The district court instructed on two separate theories of punitive liability, to wit: liability under the doctrine of respondeat superior ("vicarious liability") (jury instruction no. 36), ¹ and complicity liability (jury instruction no. 34). ²

On appeal, Smith contends that respondeat superior liability, otherwise known as the "vicarious liability rule," was the only theory under which Smith's could be assessed punitive damages. Smith's argues that, because its employees were exonerated on the punitive damage claims, Smith's should be exonerated as well.

Exoneration of the agents for punitive liability

The district court below submitted a special interrogatory to the jury asking the following:

Does the conduct of Defendants, or any of them, warrant the imposition of punitive or exemplary damages?

The jury responded in the negative as to each of the employees and in the affirmative as to Smith's. Smith's contends the jury's responses constitute specific findings that the conduct of the employees was not malicious or oppressive, thus precluding an assessment of punitive damages against Smith's. We disagree.

Generally, punitive damages cannot be assessed against a principal for an agent's tortious acts unless the conduct of the agent would warrant assessment of such damages against him. However, the refusal of the factfinder to award punitive damages against an employee does not necessarily compel the conclusion that the employee's acts were without malice. Browand v. Scott Lumber Co. Inc ., 125 Cal.App.2d 68, 269 P.2d 891, 895 (1954). The jury in this case was asked only whether any of the defendants should be the subject of "punishment." It was not asked to make a specific finding as to the nature of the acts of the employees involved in this misadventure. Simply stated, the refusal to punish is not tantamount to a finding that no malicious or oppressive conduct was proved. Whether any defendant merits punishment is within the sound discretion of the jury.

Substantial evidence in this case suggests that the malice of the employees would have justified the imposition of punitive damages against them. ³ The acting manager of the store and other employees confined Bellegarde to a small room for a lengthy period of time on the erroneous suspicion that she had stolen a package of chewing gum. Thereafter, employees seized her purse, sprayed her with "pepper spray" and placed her in handcuffs. They did not remove the handcuffs for over thirty minutes. As a result, Bellegarde sustained personal injuries requiring hospitalization. Giving her the benefit of every reasonable inference from any substantial evidence supporting the verdict, we conclude that the jury could have found that the conduct of Smith's employees was malicious or oppressive, even though the jury decided not to punish the individual employees. ⁴

Employer's punitive damages liability for malicious acts of its agents

Having concluded that the jury could have...