No. 85-380 IN THE SUPREME COURT OF THE STATE OF MONTANA. 1986

MILDRED FLANIGAN, Plaintiffand Respondent,

PRUDENTIAL FEDERAL SAVINGS & LOAN ASSOC.

## ,a federally chartered banking corporation,and FRED OGOLIN, Defendants and Appellants.

APPEAL FROM: District Court

### of the Second Judicial District, In and for the County of Silver BOW, TheHonorable Mark Sullivan, Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: David J. Wing argued, Butte,Montana

For Respondents: Poore,Roth & Robinson;Donald C. Robinson argued, Butte,Montana

Submitted: April 24, 1986 Decided: June 5, 1986

@ *&d-@#@J ClerkMr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Plaintiff brought this action in the First Judicial District Court to recover damages based upon wrongful termination from employment. The jury returned a verdict in favor ofplaintiff,awarding her $94,170 in economicdamages, $100,000 for emotional distress and exemplary damages in the amountof $1,300,000. Defendantsappeal. We affirm. Mildred Flanigan (respondent)was hired as a teller on January 28, 1952, by Prudential Federal Savings and Loan Association. She worked in various capacities until April 15, 1-980,at which time Fred Ogolin, Vice President and Manager of Prudential Federal Savingsand Loan,Butte Branch, firedher. Hereafter, the two defendants will be referred to jointly as the appellants unless it is necessary to distinguishthemby specific reference. The issues presented for review involve substantial credible evidence questions. We thereforewill detail the facts and, as we must, in a light favorable to respondent. First National Bank in Libby v. Twombly (Mont. 1984), 689 P.2d 1226, 1230, 41 St.Rep. 1948, 1952; Jacques v. Montana National Guard (Mont. 1982), 199 Mont. 493, 503, 649 ~.2d 1319, 1325. Following commencement of her employment, respondent worked as a teller for approximately 14years,performing in

a satisfactory fashion. In 1966 she became branch office bookkeeper. That positionwas eliminated because of a change in technology and in 1973, the respondent moved into the mortgage loan department where she became branch general clerk. She maintained this position until 1976, when she became assistant loan counselor. Respondent performed satisfactorily in allpositions.On December 7, 1979,prior to respondent's termination, the president of Prudential prepared an interoffice memorandum entitled "Personnel Information and Policy Change". This memorandum was distributed to all employees formally advising them of economic turndowns and the resultingneed of Prudentialto reduce itswork force. The memorandum was discussed at the staff meeting in Butte, Montana, on December 13, 1979. Respondentwas present. In the latter part of January, 1980, respondentwas advised by Fred Ogolin that herposition as assistant loan counselorwas to be terminated as of June 1, 1980. After discussion, Ogolin advised respondent of a teller training program in Salt Lake City, Utah,and asked her if shedesired tobroaden her job slcills. Respondent accepted the offer and on March 2, 1980, she attended the week-long program. On March 18, 1980, after her return to Butte, respondentbegan working as

a teller. Less than one month later, respondent was terminatedwithout notice andwithout hearing. Shewas given six months pay as a severance benefit and paid her accumulated profit sharing benefits of $48,428.02. After respondent was terminated, she was offered,by letter dated June 9, 1981, a part-time position as teller. After consultation with counsel,the offerwas rejected. Within two weeks following her termination, respondent filed an age discrimination complaint with the Human Rights Commission. She received a "right to sue" letter and filed this complaintonApril 13, 1983. After consolidating several of appellants' issues, we find the following questions govern the outcome of this appeal:1. Was there substantial credible evidence to support submissionof respondent's case to the jury based upon breach of the implied covenantofgood faith and fair dealing? 2. Did the District Court err in its treatment of the negligence issue? As sub-issueswe determine whether it was

error for the trial court to allow amendment of the pleadings; whether the negligence count was barred by the statute of limitations; whether comparative negligence was applicable; and whether workers' compensation was the exclusive remedy? 3. Did the District Court err in allowing opinion testimony from expert witnesses about the covena.ntof good faithand fairdealing? 

### 4. Was it error to refuse admission of defendant's Exhibit U.U.? 5. Did the District Court err in failing to reduce damages by $26,290.53, the amount the plaintiff would have received had she not refused to accept the position as a part-time teller following her termination? 6. Was there substantial credible evidence to submit punitive damages to the jury? We include within this issue the question ofwhether punitive damages were excessive as a matter of law. ISSUE ONE Was there substantial credible evidence to support submissionof respondent's case to the jury based upon breach of the implied covenantofgood faith and fair dealing? The principal argument advanced by appell-antsis that Prudential was experiencing severe economic conditions and terminated the respondent in a legitimate reduction-in-force

move designed to curb costs. Appellants argue that aMontana jury should not be a silentpartner in every decision made toterminateemployees. Reliance isplaced upon the languageof Professor Gary Murg and Clifford Scharman, in an article titled "Employmentat Will: Do the Exceptions Overwhelm the Rule?" 23 Boston College L.R. 329, 372 (1982),wherein it

was said:



# . ..A jury shouldnotbe entitled to second guess an employer's policy orpractices to determine that they are insufficient justifications for a discharge. Such an approachwould leavevirtually all personnel practices open to communal comment. A personnel practice that is justifiable to one jury may be found pernicious to another. The likely result would thenbe to subject employers to the threat of suit inevery instance of a discharge as the employee attempts to find a jury sympathetic to his cause. Thus, the only issue that should be posed to the jury iswhether the personnel practice was applied equally to all employees. It is submitted that if an employer's promise of continued employment is to be given contractual force courts must limit the discretion of the jury in determining what constitutesgood cause. Respondent disputes that shewas terminated aspart of a reduction-in-forceprogram. She points to the testimony of Ogolin, who fired her. Oqolin testified at trial that,but for the respondent's alleged poor performance as a teller, she would have remained employed by Prudential. In earlier testimony Ogolin had said that under no circumstances would the respondenthave remainedwith the company. Respondent argues that the dual and contradictory

reasons for termination advanced at trial by the appellants reveal an arbitrary, capricious and bad faith firing. Respondent notes the following Ogolin testimony which is supportive of a reduction in force: Q. (By Mr. Robinson) 

# . .

# . Would Mildred have been let go if in the three weeks sheworked as a teller shehad appeared tobe performingas well as any other average teller inyour operation? A. (ByMr. Ogolin) Yes. Ihad already made the decision that Mildred's job was going to he, or positionwas going to be eliminated

# . . .

# .Q. So, how well she performed in that three-week period had nothing to do with your decision to 

### --- terminate her on April 15, 1980, is that true? 

### -- - - --- A. That's correct. That decisionwasmade before she performed as a teller trainee in the Butte office.

So,

### youwouldn't have considered her for stayQ* 

### - -- ing no matter how she had performed as a teller, 

## --- -- oodorbad, is that true? 

### L-- 

### --- A. That's right,

### yes. Q. That would be true even if shehad performed as well asConnie Selonwhohad worked as a teller for 

### 4years? A. Yes, that's true. (Tr.pp. 437-438) (Emphasissupplied-) Several days later Ogolin, testifying in his own defense,gave this contradictory testimony: Q. You put in a 1-otof testimony today about the fact that shedidn't performwell according to your opinion but it's true, is it not, 

### -- as you testified last week that it wouldn't have made any difference 

## -- how she had performed, 

## - she still would 

### -- have lost her 

### job,isn't that true? 

### -

A. Yes, I testified to that. 

# .

# . . -

Q. Are you changing your testimony from last Wednesday? A. I'm saying that the facts were not that. Q. My question again one last time, 

### --- if she had performed 

### --- aswell as another teller,could 

### -- shehave kepther job? A. Yes. 

### - Q. Oh. So,

### youhave changed your testimony from last Wednesday, is that correct? 

### -- Yes. A. 

### - (Tr.pp. 1058-1059) (Emphasissupplied-) Additionally, respondent argues that the employer violated its own written policies regarding job security andjob rights by terminating the respondent without notice and without hearing. Further, respondent maintains that she was entitled tobe recalled to fillvacantpositions but that she was not recalled except insofar as she was offered a part-time tellerposition. Respondent offered evidence that her discharge was motivated by vindictiveness on the part of Ogolin. Because of seniority, respondent had a superior right to vacation time, even before Ogolin. She testified thatwhen she asked the reason for her termination, Ogolin stated that she was "not making it as a teller" and that she was "vindictive" because she had used her seniority to select her four weeks ofvacation during themonth ofAugust. The reason for discharge was disputed by Prudential. Several months later, Prudential's president informed respondent, for the first time, that she was discharged as part of a company wide reduction in force. The president stated that "seniority or past performance was not considered" in the decision to discharge. Implicit throughout the respondent's case is the allegation that she was terminated because of her age and because of a desire on the part of the employer to cut costs associated with respondent's pension. Younger and less experienced employees, who had lower composite performance evaluations and who occupied positions respondent previously held, remained working after respondent's firing. Ogolin admitted that any errors respondent made as a tellerwere not sufficient to warrant discharge. Ogolin further admitted that respondent was never warned, reprimanded or counseled about her performance as a teller, all prerequisites to termination according to Prudential's own policies. Prudential supervisors admitted that 60 days to six monthswere normally required before one could become proficient as

a teller. The decision to discharge respondent,however,was made after respondent worked less than three weeks in the tellerposition. A long-term employee has an expectation of continued employment provided that the employee's work performance is satisfactory. Darev. Montana PetroleumMarketing Co. (~ont.

course, this does not foreclose an employer from engaging in legitimate reductions in force necessary to maintain the economic vitality of the company. However,there is evidence in this record, from the lips of Ogolin himself, that respondent was fired for poor work performance. The jury could have relied upon this latter testimony and therefore concluded therewas no reduction in force. The standard for ascertaining whether factual issues exist in a wrongful discharge case were articulated by the majority opinion in Dare, supra. We there said: The record discloses remaining genuine issues of material fact regarding Dare's wrongful discharge claim. The parties relate widely divergent versions ofDare's work performance and reasons for her termination. It therefore remains for the trier of fact to resolve these issues, includinq the reason for Dare's termination and whether 

## - she was fired for cause. (Emphasis supplied.)

The cause referred to in Dare is different from the "good cause" applicable in determining the propriety of an employee'stermination under a contract for a specified term. In Pugh v. See's Candies, Inc. (Cal.~pp. 1981), 116 Cal.App.3d 311, 171 Cal. Rptr. 917, the California Appeals Court for the First District, Division 1, noted the distinctionas follows: By what standard thatburden is to be measured will depend, in part, upon what conclusions the jurydraws as to the nature of the contract between the parties. The terms "just cause" and "good cause, 

### " "as used in a variety of contexts

# . . . have been found to be difficult to define with precision and to be largely relative in their connotation, depending upon theparticular circumstancesof each case." (R. J. Cardinal Co. v. Ritchie (1963) 218 

### -- Cal.App.2d 124, 144,32 Cal.Rptr. 545.) Essentially, they connote "a fair and honest cause or reason, regulated by good faith on the part of the party exercising the power." (Id., at p. 145, 32 Cal.Rptr. 545.) Care must be taken, however, not to interfere with the legitimate exercise of managerial discretion. "Good cause" in this context is quite different from the standard applicable in determining the propriety of an employee's termination under a contract for a specified term. (Footnoteomitted.)

In Dare, supra, the heightened expectations resulting from long-term employment were the primary basis for reversing summary judgment in favor of the employer. Justice Weber,writing for the majority, said: The presence of such facts [long-term employment] indicates that the term of employment has gone beyond the indefiniteperiod contemplated in the at will employment statute, section 39-2-503,MCA, and is founded upon some more secure and objective basis. In such cases, the implied covenant protects the investmentof the employee who ingood faith accepts and maintains employment reasonably believing their job is secure so long as they perform their duties satisfactorily.

Closely alliedwith JusticeWeberlsreasoning inDare is the California case of Cleary v. American Airlines, Inc.

wherein the Second District Court of Appeal, Division 1, stated: Two factors are ofparamount importance in reaching our result that plaintiff has pleaded a viable cause of action. One is the longevity of service by plaintiff

## - 18 years of apparently satisfactory performance. Termination of employment without legal cause after such aperiod of time offends the implied-in-law covenant of good faith and fair dealing contained in all contracts, including employment contracts. As a result of this covenant, a duty arose on thepart of the employer, Arnerj-can Airlines, to do nothing which woulddeprive plaintiff, the employee, of the benefits of the employment bargain

## - benefits described in the complaint as having accrued during plaintiff's 18 years of employment.

The covenant, in a long-term employment situation,only requires the employer to have a fair and honest reason for termination. An employee's incompetence or lack of loyalty certainly constitute sufficient reasons under this standard. However, as in this case, an employer may recognize by company policy an obligation to provide warnings and an opportunity for change. Respondent's evidence, if believed, proves that appellants failed to give respondent any opportunity to correct mistakes or otherwise conform her conduct. Appellants' motivation for the terminationwas rendered suspect by Ogolin's inconsistent testimony on the witness stand. The jury may well have chosen not to believe appellants' whole case, in light of Ogolin's lack of credibility. Respondent's 28 years of employment by Prudential gave her a secure and objective basis for believing that, if her work was satisfactoril-y performed, her employment would continue. From the evidence presented, the jury could have found that appellants had no fair and honest cause for discharge and, in fact, had ulterior motives. A case for jury deliberation was presented on the issue of wrongful termination. ISSUETWO Did the District Court err in its treatment of the negligence issue? As sub-issueswe determine whether itwas

error for the trial court to allow amendment of the pleadings; whether the negligence count was barred by thestatute of limitations; whether comparative negligence was applicable; and whether workers' compensation was the exclusive remedy? Appellants argue that the negligence count was added fiveyearsafter termination andwas thusbarred by the three year statute of limitations. This argument was recently disposed of in Sooy v. Petrolane Steel Gas, Inc. (Mont. 1985), 708 P.2d 1014, 1017, 42 St.Rep. 1702, 1705-1706. A complaint can be amended to include a new theory of recovery where the basis for the new claim is the same occurrence involved in the old claims. In this case,respondent argues that thenegligence claimand the claim forbreach of implied covenantofgood faithand fairdealing ariseout of the same occurrence, include the same fa.ctsand only involvedifferent legal theories. We agree. The amendmentwasproper. Negligence has been recognized by this Court to be a proper basis for recovery in wrongful termination cases. Negligence was approved by this Court in Crenshaw v. Bozeman Deaconess Hospital (Mont. 1984), 693 P.2d 487, 493, 41 St.Rep. 2251, 2259,whereinwe said: The allegation of negligence was clearly established in respondent's complaint. We hold the trial court committed no error in issuing the instructionto the jury. In Crenshaw, this Court relied upon the fact that plaintiff's expertonpersonnelma.nagementtestified that the discharge was made without a proper investigation by the hospital administrator. Likewise, in this case, expert testimony revealed that appellants committed 13 different violations of Prudential firing policies. We find the precedent of Crenshaw compelling and hold the negligence theorywasproper.Appellants argue that workers' compensation is the exclusiveremedy fornegligence. However,appellantsciteno authority for the argument that there is a workers1 compensation remedy available for wrongful termination in employment. In fact, the tort of wrongful termination does not occur until the employment is terminated. Theplaintiff could hardly be injured in the course and scope of employment by a tort that occurred subsequent to the existence of the employment itself. Finally, appellants contend that they were entitled to

an instruction on comparative negligence. Again, no authority is cited to support thisproposition. Ordinarily, comparative negligence must relate to the same occurrences which are the subject of the negligence alleged against defendant. Blair v. Eblen (Ky. 1970), 461 S.W.2d 370; Ferrara v. Leventhal (N.Y.App.Div. 1977), 56 A.D.2d 490, 392 N.Y.S.2d 920. The negligence relied upon in the case before us involves negligent failure to reviewprior performance and work history. Appellants do not contend that respondent violated any duty in this regard. Any negligence of respondent during the course of employment, such as work mistakes, would go to the question of whether there was a reasonable basis for the firing. Thatquestionwas submitted to the jury. In awarding punitive damages the jury found appellants' conduct tobe llwil.lfulll. Even if the trial court should have submitted respondent's negligence to the jury, any error in that regard would be harmless. Negligence is not a defense towillful conduct. Simonsonv. White (Mont.1986), 713 P.2d 983, 987-988,43 St.Rep. 133,139.ISSUETHREE Did the DistrictCourterr in allowing opinion testimony from expert witnesses about the covenant of good faith and fair dealing? Appellants claim error in theDistrictCourt's admission of opinion testimony from expertwitnesses about the covenant of good faith and fair dealing. Again, this issue was resolved in Crenshaw v. Bozeman Deaconess Hospital, supra. The rationale for our holding in Crenshaw was stated by JusticeHarrison: The instant case is not a scenarioof simple facts. Fault arising from breach of implied.covenant of good faith and fair dealing is not easily comprehensible to the average person. [The expert's] testimony was based on professional expertise and experience which the individual jury members were unlikely to possess. Her testimony assisted the trier of fact by providing the jury with information and a prospective (sic) beyond the common experience of a lay juror. (Citations omitted.)

As noted previously, the experts who testified onbehalf of respondent found 13 different violations of Prudential policies and personnel practices. Appellants complains that one expert was permitted to evaluate whether Prudential followed itspolicy as established in one of Prudential'sown memoranda. However, appellants failed to object at time of trial. It is fundamental that aparty may not raise, for the first time on appeal, alleged errors pertaining to the introduction of evidence or testimony that was not objected to at the time of trial. Scofield v. Estate of Wood (Mont.

In Crenshaw, supra,this Court approved expert testimony interpretingwritten employmentpolicies. We said: The trier of fact's experience does not extend to Hospital disciplinary guidelines, much less the ability to evaluate the propriety of suchguidelines.

# ... The trial court in its broad discretion admitted the expert testimony. The trial court'sorder will notbe disturbed on appeal in the absence of a clear showing of a manifest abuse ofdiscretion. (Citationsomitted.)

Pursuant to the precedent established by Crenshaw, supra, respondent was justified in utilizing expert testimony. In permitting the expert witnesses to interpret employment policies, the trial court acted within its discretion. ISSUEFOUR Was it error to refuse admission of defendant's Exhibit U.U.?Appellants contend that the trial court erred in refusing to admit a summary of teller transactionsperformed by various tellers during the fewdays that respondent worked

as a teller prior to her termination. The exhibit was objected to and the objection was sustained on the grounds that it was a compilation of after-acquired evidence regarding respondent's performance; that the informationwas not known to appellants at the time of termination; and that Ogolin had not examined the compilations for the purpose of making a decision about firing respondent. Therefore, the after acquired-evidence could not be used to support termination at time of trial. See Swanson v. St. John's Lutheran Hospital (1979), 182 Mont. 414, 422, 597 P.2d 702, 706-707. The trial court rulingwas correct. In any event, Ogolin was allowed to testify as to the essence of the information contained in the exhibit. Any error on the part of the trial court in refusing the exhibit was harmless in light of Ogolin's testimony.ISSUEFIVE Did the District Court err in failing to reduce damages by $26,290.53, the amount the plaintiff would have received had she not refused to accept the position as a part-time teller followingher termination? Appellants contend that respondent's award for loss of wages, that sum being $94,170, should have been reduced by the trial court in the amount of $26,290.53, based on respondent's alleged failure tomitigate da.magesby accepting Prudential'sofferofpart-time employment'. There was abundant evidence that the respondent sought to mitigate her damages by seeking other employment. However, the law does not require respondent to mitigate damages by accepting inferior employment from her former employer. The rule was stated by the California Supreme Court in Parker v. Twentieth Century-Fox Film Corp. (Cal. 1970), 474P.2d 689,wherein the court said: [Rlefore projected earnings from other employment opportunities not sought or accepted by the discharged employee can be applied in mitigation, the employer must show that the other employment was comparable, or substantially similar, to that of which the employee has been deprived; the em~lovee'sreiection of or failure to seek other & z available empioyment of a different 

### - or inferior kind may not be resorted to in order to mitigate damages. (Emphasis supplied.) (Citations omitted.

### 1

Appellants requested, and were given, a. complete and accurate mitigation instruction. The instruction reflected the case law, above cited, stating that a wrongfully terminated person has a duty to reasonably seek and maintain other employment,but no duty to accept inferior employment. We find the trial court did not err in its handling of this issue.ISSUE SIX Was there substantial credible evidence to submit punitive damages to the jury? We include within this issue the question of whether punitive damages were excessive as a matter of law. We have detailed the evidencepresented by respondent in support of her claim for breach of implied covenant of good faith and fair dealing. That evidence need not be restated here. In addition to the evidence previously set forth, testimony from appellants' president revealed a calloused attitude toward older employees. Prudential's Donovan referred to older employees as "deadwood", "old dead wood", and "ballast". He reiterated at time of trial that he consideredMildred Flanigan tobe "ballast". The jury could have inferred malice from the lack of ca.ndoron the part of appellants. Appellants' position at time of trial was that respondent was terminated for inadequate performance yet, 14 months later, appellants offered respondent a part-time job. Further, Ogolin first testified that respondent was terminated because of a reduction in force and then later testified that she was terminated because of inadequatework performance. The jury may have chosen to believe she was terminated because of Ogolin's resentment stemming from respondent depriving him of the choicest vacation times. Appellants argue that they had no notice that their conduct would be subject to punitive damages. However, the punitive damage statute, S 27-1-221, MCA, was in effect at the time appellants committed the subject acts. Appellants

were fully apprised that malicious or oppressive conduct on their part could lead to the impositionof punitive damages. Our decisions in First National Bank in Libby v. Twombly(Mont. 1984), 689 P.2d 1226, 41 St.Rep. 1948, and rib by v. Northwestern Bank of Great Falls (Mont. 19851, 704 P.2d 409, 42 St.Rep. 1133,support this result. Appellants complain that the punitive damages are excessive and based upon passion or prejudice. Section 25-11-102(5), MCA, provides that a verdict or a decisionmay be vacated and a new trialgranted "on the applicationof the party aggrieved.for

# .. .excessive damages appearing to have been given under the influence of passion or prejudice." Appellants failed to raise the issue of excessiveness in post-trial motions. This Court need not now consider that contention on appeal. InMitchell v. Thomas (1932),91Mont. 370, 8 P.2d 639, defendant claimed damages were excessive, showing passion and prejudice on the part of the jury. The Supreme Court stated: A motion for a new trial was not made, and the trial judge was not given an opportunity to pass upon this feature of the case. If he had been asked to reduce the amount of the verdict,he might have done so. We have no substantial basis for changing it. 91Mont. at 383, 8 P.2d at 643. This Courthas long adhered to the principle that "[tlhe amount to be awarded as damages isproperly left to the jury and this Court will not substitute its judgment for that of the jury 

# ..." Salvail v. Great Northern Railway Co.

(1970), 156 Mont. 12, 31, 473 P.2d 549, 560. While the punitive damages in this case are large,they are within the discretion of the jury and were not raised as error in post-trialmotions. Judgment for the plaintif all respects.We concur: /

ief JusticeMr. Justice Fred J. Weber dissentsas follows:

I dissent from that portion of Issue Six of themajority opinion which concludes that the punitive damages awarded in this case were not excessive. The jury returned the verdict for the plaintiff giving her economic damages of $94,170, emotional distress damages of $100,000 and punitive damages of $1,300,000. I conclude that under the factors hereafter described, the award of punitive damages in the amount of $1,300,000was excessive. Section 27-1-221,MCA, contains the statutoryprovisions with regard to punitive damages. Until the 1985 amendment which is not pertinent in this case, that statute provided for the award of punitive damages where the defendant has been guilty of oppression, fraud, or malice, actual or presumed, and allowed the award of damages for the sake of exampleand byway ofpunishment. No additional factors were set forth. In 1927 this Court described what a jury should consider in setting the amount of a punitive damage award: "The jury should take into consideration the attendant circumstances, such as the malice or wantonness of the act, the injury intended, the motive for the act, the manner 

### inwhich it was committed and the deterrent effect upon others

# ...According to the general rule, ii isproper for the jury to-considerdefendant'swealth and pecuniary ability in fixing the amount of damages." 17 C.J. 994, 995.

# .. . "The public good in the restraint of others from wrongdoing, as well as the punishment of the offender, is to be considered in estimating exemplary damages.

### " Ward v. Ward, 41 Iowa, 686. Based on those determinative factors and seneral principles, in this state the rule is that the 

### ----- amount of exemplary damages 

## -- must be reasonable. (~mphasis supplied)

# . Ramsbacher v. Hohman (1927), 80Mont. 480, 489, 261 P. 273,In the case of Butcher v. Petranek (1979), 181 Mont. 358, 361, 593 P.2d 743, 744,this Court restated the rule in Montana that a jury award of punitive damages would not be disturbed unless the amount, considered in connection with the facts, indicates the jury was influenced by passion, prejudice, or corruption. My research indicates that there is a greatdifference ofopinion in the various states on the

manner and extent of review ofpunitive damages,both by the trial court and the appellate court. However, Ido note that many courts have concluded that it was appropriate to set aside punitive damage awards on the basis of passion and prejudice,or similarrationales. I approve the factors to be considered in reviewing punitive damagesas set forth inMallor and Roberts, Punitive Damages: Toward a PrincipledApproach, 31 Hastings L.J. 639

(1980)

# . These factors are essentially as follows:

1. the severity of the harm likely to occur from defendant's conduct; 2. the degree of reprehensibility of defendant

## 's conduct; 3. theprofitability of the conduct; 4. the financialposition of the defendant; 5. the amountof compensatorydamages; 6. the costsof litigation; 7. potential criminal sanctions;and 8. other civil actions against the defendantbased on the same conduct. Because this is a dissent, I will not extensively analyze the facts as they apply to each of these factors. I do suggest that a clear contradiction is shown if we apply factor (5)to the present case. The amount of 

### the compensatory damages totals $194,170. This factor alone raises asignificant question as to the punitive damages award of $1,300,000. As I seek to apply the above factors in my review of the facts of this case including the outrageous conduct on the part of the defendant, I conclude that an award of $1,300,000aspunitive damages is excessive. This case tends to suggest thevery real interplaywhich is possible on the jury's part with regard to the various categories of damages. We speak of economic damages and emotional distress damages as being compensatory in nature and different in character from punitive or exemplary damages. I'm not certain tha.tthe jurymade thatdistinction. As

an example, had the jury not been allowed to award punitive damages in excess of onemillion dollars aswas done in this case, the factswould seem towarrant an award for emotional distress in excess of $100,000. I would therefore reverse the judgment and remand for

new trial so the plaintiff would have an adequate opportunity to recoverall types ofdamages which shemay prove.