Title: Clarey v. K-Products, Inc.

State: iowa

Issuer: Iowa Supreme Court

Document:

514 N.W.2d 900 (1994) Lynette CLAREY, Appellee, v. K-PRODUCTS, INC., Appellant. No. 92-1305. Supreme Court of Iowa. April 20, 1994. *901 James D. Loerts, Robert V. Dwyer, Jr., and Edward F. Pohren of Dwyer, Pohren, Wood, Heavey, Grimm, Goodall & Lazer, Omaha, NE, and Kermit L. Dunahoo, Des Moines, for appellant. Stanley E. Munger and Irene A. Schrunk of Munger & Reinschmidt, Sioux City, for appellee. Considered by HARRIS, P.J., and LARSON, CARTER, SNELL, and TERNUS, JJ. LARSON, Justice. Lynette Clarey was discharged from her job with K-Products, Inc. and brought this action for wrongful termination. The jury awarded her substantial damages, and this appeal and cross-appeal followed. We affirm on both appeals. Clarey injured her neck on the job and was unable to work for a time. When she attempted to return, the company physician (who was also her personal physician) instructed her to stay away because the injury had not completely healed. He diagnosed Clarey's injury as torticollis, which is a muscle spasm in the back of the neck. K-Products terminated Clarey's employment while she was receiving healing-period *902 workers' compensation benefits. Clarey sued K-Products, claiming in part that the termination was in retaliation for her seeking workers' compensation benefits. (Two other theories were rejected by the trial court, which submitted only the retaliatory discharge issue.) The jury returned a verdict in Clarey's favor, awarding her $34,146 for loss of past wages, $80,000 for the present value of future loss of wages, $200,000 for past mental and emotional distress, and $50,000 for the present value of future mental and emotional distress. K-Products complains that there was insufficient evidence to support a finding of retaliatory discharge, and in fact, the evidence supports its theory of defensethat Clarey was discharged because she was unable to perform her duties. K-Products also complains that the court erred in several evidence rulings, erred in failing to grant a new trial based on the amount of the jury award, and abused its discretion in failing to grant a new trial based on conduct of the plaintiff's lawyer. The plaintiff's cross-appeal asserts error in the court's denial of punitive damages and attorney fees. An at-will employee may generally not recover damages for a discharge, but when the discharge occurs for reasons contrary to public policy we have recognized an exception. In Springer v. Weeks & Leo Co., 475 N.W.2d 630, 632 (Iowa 1991) (Springer II), for example, we recognized a right of action for a discharge in retaliation for an employee's filing a workers' compensation claim. K-Products contends that the evidence was insufficient on both the retaliation claim and the plaintiff's damages. The plaintiff submitted evidence of tardy payment of workers' compensation benefits by K-Products, disparaging comments by company officials concerning claims for workers' compensation, and the testimony of several employees that they had been harassed following their filing of workers' compensation claims. Also, evidence that K-Products gave inconsistent reasons for her discharge supported the plaintiff's theory, and there was testimony by the company's doctor that he believed the company was intentionally "slowing things down" in processing workers' compensation claims. As to the sufficiency of the evidence on damages, there was testimony that the plaintiff was depressed and even attempted suicide following her termination. She had applied for other jobs but was denied employment, presumably because she had been fired at K-Products. We believe that the evidence, when viewed in the light most favorable to the verdict, is sufficient to generate fact issues on the question of retaliation, proximate cause, and damages. K-Products complains that the district court allowed testimony by the company's doctor that paraphrased a statement that had been made to the doctor by a company official. The doctor testified: K-Products characterizes this as opinion evidence, a statement by the witness as to his opinion of the declarant's state of mind. We do not view this as an opinion, for evidence purposes, but rather the paraphrasing of an oral statement that would be difficult to repeat verbatim. As Professor Wigmore has stated: 7 John Henry Wigmore, Wigmore on Evidence § 2097(a), at 608-09 (1978). We believe this testimony was properly received. K-Products also complains that the court allowed evidence from four former employees who testified about the attitude of the employer toward workers' compensation claimants. Iowa Rule of Evidence 404(b) provides: Under the court's instructions, the jury was to consider the testimony of these employees only as it bore on the matters set out in Iowa Rule of Evidence 404(b). The instruction stated: The gist of the testimony in question was that these other employees, all of whom had filed workers' compensation claims within a one-year period of this plaintiff's claim, were subsequently harassed by the employer. This tends to establish a pattern of conduct and was admissible to show motive, intent, plan, or absence of mistake or accident under rule of evidence 404(b). K-Products argues that the court abused its discretion in refusing to grant a new trial under Iowa Rule of Civil Procedure 244 on the ground that the damages totaling $364,146 were excessive and the result of passion on the part of the jury. There was evidence that the plaintiff became suicidal as a result of a discharge and was placed in an institution. She was denied employment by several potential employers and produced evidence of reduced future earnings. In passing on the alleged excessiveness of damages, we need to determine only whether there was substantial evidence to support the verdict. Northrup v. Miles Homes, Inc., 204 N.W.2d 850, 860 (Iowa 1973). We have noted that the trial court is generally in a better position to determine whether the evidence was sufficient to justify an award based on the observations of the trial court. Id. at 861. There was sufficient evidence of damages to support the award. K-Products challenges the trial court's rulings on instructions. It claims the court erred in refusing to instruct the jury as follows: The trial court properly denied K-Products' request for this instruction because there was not a sufficient factual basis for it. In fact, there was no medical evidence at all that the plaintiff was unable to return to work at the time she was fired. *904 K-Products also complains that the court erred in refusing to submit the following instruction: K-Products argues that, by refusing this instruction, the court allowed the jury to assume that any discharge prior to a medical release would be a discharge in violation of public policy. We believe that the instructions as a whole correctly state the principles of law regarding retaliatory discharge. In fact, insertion of an issue as to what the industrial commissioner may consider would probably serve only to confuse the jury. K-Products also complains that the court instructed the jury that amounts paid to Clarey as permanent partial disability under workers' compensation must be disregarded in determining her damages. The issue is whether an amount paid under workers' compensation should be offset against the jury's verdict. We believe the court properly instructed the jury on this matter; permanent partial disability payments are not payments for future wages. K-Products complains that Clarey's attorney engaged in improper conduct during the trial, which should have resulted in a mistrial. However, in its motion for new trial, K-Products failed to mention specifically any of the alleged instances of misconduct. As we said in a similar case, Auen v. Kluver, 250 Iowa 619, 626, 95 N.W.2d 273, 277 (1959). Other issues that have been raised in the direct appeal have been considered, and we find no merit in them. The plaintiff complains in her cross-appeal about the court's refusal to allow punitive damages and attorney fees. As to her claim for punitive damages, the district court ruled that, because the plaintiff was discharged before we first recognized a claim for retaliatory discharge in Springer v. Weeks & Leo Co., 429 N.W.2d 558 (Iowa 1988) (Springer I), K-Products could not be found guilty of a course of conduct so egregious as to give rise to punitive damages. We agree. As to the plaintiff's claim for attorney fees, based on Iowa Code section 91 A. 8 (1989), we note the statute provides: Wages are defined in section 91A.2(4) as compensation owed by an employer for: Under this statute, "wages" do not include damages arising out of a wrongful termination but only wages due and owing for past services rendered by the employee. We conclude that the case should be affirmed on both appeals. AFFIRMED ON BOTH APPEALS.