Title: Faro v. Highway Division
Citation: N/A
Docket Number: S43839
State: Oregon
Issuer: Oregon Supreme Court
Date: January 23, 1998

FILED:  January 23, 1998

IN THE SUPREME COURT OF THE STATE OF OREGON

TONY D. FARO,

	Petitioner on Review,

	v.

HIGHWAY DIVISION, DEPARTMENT
OF TRANSPORTATION, STATE OF
OREGON,

	Respondent on Review.

(CC 92-01-34624; CA A86430; SC S43839)

		On review from the Court of Appeals.*

		Argued and submitted April 30, 1997.

		George W. Kelly, Eugene, argued the cause and
filed the petition for petitioner on review.

		Jas. Adams, Assistant Attorney General, Salem,
argued the cause for respondent on review.  With him on
the brief were Hardy Myers, Attorney General, and
Virginia L. Linder, Solicitor General.

		Before Carson, Chief Justice, and Gillette,

	Van Hoomissen, Fadeley, Graber, and Durham, Justices.**

		GRABER, J.

		The decision of the Court of Appeals is affirmed
in part and reversed in part.  The judgment of the
circuit court is reversed, and the case is remanded to
the circuit court for further proceedings.

	    *Appeal from Union County Circuit Court,
		Milo Pope, Judge.
		143 Or App 388, 923 P2d 1298, adhered to on recons
	144 Or App 399, 927 P2d 623 (1996).

	   **Kulongoski, J., did not participate in the 				consideration or decision of this case.

		GRABER, J.

		Two issues are before us in this wrongful discharge and
unlawful employment practice case.  (1) We hold that the trial
court committed reversible error by excluding a witness'
testimony that would have supported defendant's theory of its
reason for terminating plaintiff's employment and affected the
jury's assessment of plaintiff's credibility.  (2) With respect
to the question whether an award of punitive damages is available
to a successful plaintiff in a claim for unlawful employment
practices when the state is the defendant, we affirm the Court of
Appeals' "no" result by an equally divided court.(1)

		Plaintiff worked at the La Grande shop of the Oregon
Department of Transportation (ODOT), Highway Division, from 1976
until he was fired on January 4, 1991.  During his employment,
plaintiff held various positions.  At the time of his
termination, he was a heavy equipment mechanic's helper. 
Plaintiff is legally blind.

		Alleging that he was terminated because he was visually
impaired and because he was a "whistleblower," plaintiff filed
this action for wrongful discharge and for unlawful employment
practices under ORS 659.121.  Plaintiff sought compensatory
damages, punitive damages, and attorney fees.  In answer,
defendant asserted that it had terminated plaintiff's employment
because he had stolen property from the state.

		Plaintiff testified at trial that it was common
practice for Highway Division employees to take state property
from the La Grande shop.  In 1990, ODOT conducted an internal
investigation into allegations of discrimination, improper
management practices, and misuse and theft of state property at
the La Grande shop.  Defendant asked that its employees be candid
and cooperative with investigating authorities and assured them
that their cooperation would not result in retaliation.  The
director of ODOT testified that, because he was disturbed about
the misuse of state property, he asked the Oregon State Police
(OSP) to investigate employee theft at several shops, including
the one in La Grande.  ODOT and the OSP undertook a joint
investigation.

		Early in the investigation, plaintiff identified six
ODOT managers who had stolen state property and claimed that he
himself had taken only small items.  Another ODOT employee told
the OSP that he had observed that plaintiff had at his house six
tires with yellow chalk markings indicating that they were state
property.  When an OSP investigator questioned plaintiff about
the tires, plaintiff denied having any tires that belonged to the
state.  Plaintiff later admitted that he had such tires and
stated that he had bought them from Kevin Sieders for $300.  Even
though, according to his own testimony, plaintiff knew that the
tires were worth at least $600, he denied knowing or suspecting
that the tires had been stolen from the state.  Plaintiff further
testified that, after telling the OSP investigator that he had
bought the tires from Sieders, plaintiff went to Sieders' home
and asked Sieders if plaintiff had anything to fear concerning
the tires.  Plaintiff testified that Sieders told him that he had
bought the tires at a yard sale.

		In an offer of proof, made outside the jury's presence
during trial, Sieders testified that he sold plaintiff the six
tires in question and that he expressly told plaintiff -- both
before and after the sale -- that he had stolen the tires from
the state.  Sieders further stated that, after the investigation
began, he and plaintiff made up the story about Sieders' buying
the tires at a yard sale.  The trial court excluded Sieders'
testimony in its entirety, citing OEC 403, on the ground that it
was more prejudicial than probative.

		Additionally, during their investigation, OSP officers
discovered, in a shed on plaintiff's property, other state
property, including a new tractor clutch, a battery, a "pony
pump," and a four-cycle motor.  Plaintiff identified those items
as state property.

		The district attorney for Union County testified that
he had granted plaintiff immunity from criminal prosecution,
because plaintiff's testimony implicated both line workers and
management in thefts.  Were it not for the grant of immunity, the
district attorney testified, he would have prosecuted plaintiff
for "theft by receiving" with respect to the tires and the other
state property found on plaintiff's property.

		ODOT personnel officials testified that, as a result of
the investigation, ODOT fired six managers and five other
workers, reduced the salaries of three employees, and issued four
letters of reprimand.  The personnel manager for ODOT stated that
the agency fired plaintiff only after substantiating all charges
against him that were described in the OSP report.  Additionally,
he testified that ODOT did not promise any employees in the La
Grande shop immunity at ODOT for their own misconduct in exchange
for disclosing misconduct by other employees.

		In a special verdict, a jury found that plaintiff had
not been wrongfully discharged but that defendant had engaged in
an unlawful employment practice because of plaintiff's physical
impairment.  The jury awarded plaintiff $37,500 in noneconomic
damages and $100,000 in punitive damages.  The court awarded
plaintiff $45,000 in attorney fees.

		The Court of Appeals reversed the trial court's
judgment on the ground that it was reversible error for the trial
court to refuse to give a jury instruction that defendant had
requested.(2)  Faro v. Highway Division, 143 Or App 388, 923 P2d
1298, adhered to on recons 144 Or App 399, 927 P2d 623 (1996).(3) 
The Court of Appeals also held that the Oregon Tort Claims Act's
prohibition on an award of punitive damages against a public body
prevails over a contrary provision in ORS 659.121 that allows
punitive damages for unlawful employment practices and that,
therefore, the award of punitive damages must be vacated on
remand.  143 Or App at 394.  Finally, the Court of Appeals held
that the trial court acted within its discretion in excluding
Sieders' testimony as more prejudicial than probative.  Id. at
395-96.

		Plaintiff sought this court's review, and we allowed
the petition.

		In a cross-assignment of error, defendant argues that
the trial court committed reversible error when it excluded
Sieders' testimony in its entirety.  Plaintiff contends that
Sieders' testimony was not admissible, because defendant did not
know the content of that testimony until 1994, four years after
plaintiff's termination.  Therefore, plaintiff argues, that
evidence is not relevant to the issue whether plaintiff was in
fact terminated in 1990 for stealing state property.

		Plaintiff's argument misses the mark.  Plaintiff
claimed that he had been fired because of a physical impairment
or a whistle-blowing activity.  Defendant's defense was that
neither of those alleged reasons was at play; rather, defendant
asserted, it had fired plaintiff because it reasonably believed
that he was a thief.

		ODOT's defense rose or fell on the issue of plaintiff's
credibility in front of the jury at the time of trial, because
plaintiff denied the theft of the tires during his testimony at
trial.  In that situation, evidence pertinent to plaintiff's
present credibility respecting the central issue in the case was
not "collateral," as the Court of Appeals labeled it.  143 Or App
at 395.  See OEC 607 ("[t]he credibility of a witness may be
attacked by any party"); State v. Burdge, 295 Or 1, 6 &amp; n 3, 664
P2d 1076 (1983) (a witness may be impeached by evidence that
contradicts the witness' testimony on any independently relevant
fact); Laird C. Kirkpatrick, Oregon Evidence 325-27 (3d ed 1996)
(discussing impeachment by contradiction).

		Sieders' testimony pertained to plaintiff's present
credibility respecting the central issue in the case, because
Sieders would have testified that he had stolen the tires, that
plaintiff knew it all along, and that he and plaintiff had
concocted the story that plaintiff told at trial.  If the jury
had believed Sieders, it would have had to conclude that
plaintiff was lying at trial.  No similar evidence had been
introduced through another witness.  In the circumstances, the
trial court had no discretion to exclude Sieders' testimony
altogether, and its decision to do so was an error.

		It remains to decide whether that error requires
reversal.  In the context of a criminal case, this court has held
that it is reversible error for a trial court to exclude evidence
if that ruling denies the jury an adequate opportunity to assess
the credibility of a party witness.  State v. Reynolds, 324 Or
550, 558, 931 P2d 94 (1997).  In this case, the jury was denied
an adequate opportunity to assess plaintiff's credibility.  The
general test in a civil case is whether the trial court's
erroneous ruling substantially affected a right of the party
claiming the error.  Baker v. English, 324 Or 585, 589-93, 932
P2d 57 (1997).  Because the error here may have affected the
outcome of the case, we conclude that the trial court's erroneous
exclusion of Sieders' testimony substantially affected
defendant's right to present its defense.  Accordingly, defendant
is entitled to a new trial.  The Court of Appeals erred in
holding to the contrary.

		Finally, in the petition for review, plaintiff argues
that a judgment for punitive damages may be entered against the
state in an action for employment discrimination brought under
ORS chapter 659, citing ORS 659.121(2).(4)  Defendant argues to the
contrary, citing ORS 30.270(2),(5) a provision of the Oregon Tort
Claims Act.  As noted, the Court of Appeals agreed with defendant
and held that the trial court had erred in entering a judgment
for punitive damages in favor of plaintiff.  With respect to that
issue, this court is equally divided.  Accordingly, the result
adopted by the Court of Appeals is affirmed by an evenly divided
court.

		The decision of the Court of Appeals is affirmed in
part and reversed in part.  The judgment of the circuit court is
reversed, and the case is remanded to the circuit court for
further proceedings.

1.           Although plaintiff's action against defendant is based
on his allegedly improper termination, plaintiff introduced
evidence at trial of prior acts by defendant to show ongoing
discriminatory or other improper motives that allegedly
manifested themselves later in the termination.  The trial court
refused defendant's request for a limiting instruction, which
would have informed the jury that it could consider the prior
acts only to the extent that such evidence helped the jurors to
decide whether defendant's termination of plaintiff's employment
was substantially motivated by an unlawful purpose.  Plaintiff
asserted that the requested instruction was cumulative of the
instructions given by the trial court and that it also was
partially incorrect.

		The Court of Appeals held that the trial court's
refusal to give the limiting instruction was reversible error. 
143 Or App 388, 393, 923 P2d 1298, adhered to on recons 144 Or
App 399, 927 P2d 623 (1996).  However, because we remand the case
for a new trial, and because we do not believe that the matter is
likely to arise again on remand in the same form, we need not and
do not consider that issue.  The parties and the trial court are
aware of a potential problem with the jury instructions that were
given and are likely to resolve this matter on remand.

2.          As noted in note 1, above, we need not consider the
jury instruction issue.

3.           Plaintiff moved for reconsideration of the Court of
Appeals' holding on the jury instruction issue, arguing that
defendant had not preserved and presented that assignment of
error.  144 Or App at 401.  On reconsideration, the Court of
Appeals explained the basis for its conclusion that the issue had
been preserved and adhered to that conclusion.  Id. at 402.

4.           ORS 659.121(2) provides in part:

		"Any person claiming to be aggrieved by alleged
violations of ORS [659.425] may file a civil action in
circuit court to recover compensatory damages or $200,
whichever is greater, and punitive damages."

5.           ORS 30.270(2) provides:

		"No award for damages on any such claim shall
include punitive damages.  The limitation imposed by
this section on individual claimants includes damages
claimed for loss of services or loss of support arising
out of the same tort."