Title: Martha Mogull v. CB Commercial Real Estate Group, Inc., et als.
Citation: N/A
Docket Number: a-107-98
State: new-jersey
Issuer: new-jersey Supreme Court
Date: February 16, 2000

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). GARIBALDI, J., writing for a unanimous Court. This appeal presents the issue whether jury instructions, jury interrogatories, and a verdict sheet regarding a defendant employer's burden of production in a sex discrimination case under the New Jersey Law Against Discrimination ( LAD ) so confused the jury that a reversal of plaintiff's verdict was required. Martha Mogull worked in the Hackensack office of CB Commercial Real Estate Group, Inc. ( CB ) for more than a decade. After a number of disputes about commissions allegedly owing to her, CB discharged her. Mogull subsequently filed suit alleging that CB and a number of its employees had discriminated against her in her employment and in the termination of her employment on the basis of her sex, in violation of the LAD. In its answer, CB denied the material allegations of Mogull's complaint and alleged that she was terminated for legitimate business reasons. The matter was tried before a jury over approximately seven weeks. At the close of all evidence, and after giving its jury instructions, the trial court submitted specific interrogatories to the jury to be used in reaching its determination. CB did not object to the instructions or to the interrogatories at any point before the jury retired to consider its verdict. In response to the interrogatories, the jury found that Appel (the only remaining individual defendant) was liable to Mogull for breach of contract and awarded her over $87,000 on that claim. In addition, the jury determined that Mogull had been denied benefits (commissions) relating to three separate transactions, and awarded her $500,000 on those claims. Finally, the jury found that Mogull was performing her job at a satisfactory level when she was terminated; that male employees with comparable work records were retained; and that CB had failed to articulate any legitimate, non-discriminatory reason for its termination decision. The jury awarded $1,000,000 on that claim. CB moved to dismiss the claim for punitive damages, arguing that there was no evidence of any ill will or evil intent on its part. The court denied that motion, reasoning that it was up to the jury to make that determination. After a separate proceeding, the jury awarded Mogull $5,000,000 in punitive damages. CB moved for a new trial, for judgment notwithstanding the verdict, and for remittitur (reduction in the amount of the jury award), arguing that the interrogatory asking whether CB had articulated legitimate nondiscriminatory reasons for its actions should not have been submitted to the jury, and that the charge on that point was confusing in that it led the jury to believe that CB was obligated to prove its articulated nondiscriminatory reasons by a preponderance of the evidence. CB also argued that punitive damages should not have been awarded, there having been no egregious conduct. The trial court denied the motion, concluding that the evidence supported the jury's verdict. The court further upheld the award of punitive damages, finding that there was evidence of egregious conduct in which CB's upper management participated. CB raised several issues on appeal, including the accuracy of the jury instructions and the propriety of the special interrogatories or verdict form submitted to the jury. The Appellate Division held that the jury instructions together with the interrogatories and verdict sheet regarding CB's burden of going forward with nondiscriminatory legitimate reasons for the challenged employment actions contained such fundamental error that reversal of the entire verdict was required. The court reversed and remanded for a new trial only against CB, instructing that if CB presented the same evidence at the new trial, the LAD liability portion of the jury charge and the corresponding jury interrogatories as to denial of employment benfits and discharge based on sex, should focus solely on the pretext and intent analysis. The Supreme Court granted Mogull's petition for certification. HELD: Although the trial court erred in submitting interrogatories to the jury that essentially required CB to prove its reason for discharging Mogull, that error did not produce an unjust result inasmuch as the jury instructions conveyed the clear message that Mogull bore the ultimate burden of proof, thus curing whatever defect the interrogatories may have introduced. 1. Under the McDonnell Douglas/Peper test for indirectly proved cases of unlawful discrimination under the LAD, once a prima facie case is established by the employee, then the burden of going forward shifts to the employer to rebut the resulting presemuption of undue discrimination by articulating some legitimate, nondiscriminatroy reason for the employee's rejection. The employee then must prove by a preponderance of the evidence that the legitimate nondiscriminatory reason advanced by the employer was merely a pretext for discrimination. (pp. 16-18) 2. Because CB made no objection to the jury instructions or to the verdict sheet incorporating the description of its burden of production at any time before the jury retired for its consideration, to justify reversal, any error on the part of the trial court in that respect must constitute plain error. (p. 20) 3. There is no reversible error where the jury charge, considered as a whole, adequately conveys the law and is unlikely to confuse or mislead the jury, even though part of the charge, standing alone, might be incorrect. (p. 20) 4. Although the trial court's charge in respect of CB's responsibility to go forward and articulate a nondiscriminatory reason for the employee's discharge could have been more artfully drafted, the charge, which closely tracked the Model Charge, conveyed the clear message that Mogull and not CB bore the ultimate burden of proof. Therefore, any error on the part of the trial court in that respect did not constitute plain error. (pp. 21-23) 5. Interrogatories, like any other instructions to a jury, are not grounds for reversal unless they are misleading, confusing or ambiguous. Because CB did not object to the interrogatories at any relevant time, they must be evaluated in terms of whether they produced an unjust result. (pp. 23-26) 6. Although the trial court errred in requiring CB to prove, instead of produce, its reason for the employee's discharge, for the result to be unjust, there must be a determination that the jury would have found that Mogull failed to prove her case by a preponderance of the credible evidence, a finding not compelled by this record. (pp. 26-29) 7. The jury's responses on the verdict sheet fairly reflect its conclusion, consistent with the court's charge, that Mogull sustained her burden of proving intentional discrimination based on her gender. (pp. 29-31) 8. Given the confusion that often results when the first and second stages of the McDonnell Douglas test goes to the jury (that is, the establishment of a prima facie case and the burden of producing or articulating a legitimate, nondiscriminatory reason for discharge), it is recommended that the court should decide both those issues. (pp. 31-34) 9. To sustain an award of punitive damages, it must be established that upper management participated in or was wilfully indifferent to the wrongful conduct and that the the offending conduct is especially egregious. (p. 34) 10. In examining the size of punitive awards, courts must consider the degree of reprehensibility of the conduct involved; the disparity between the harm or potential harm suffered by the injured party and the punitive damages award; and the difference between the remedy of punitive damages and the civil penalties authorized or imposed in comparable cases. (pp. 34-36) 11. Because the trial court did not give the upper management charge, on remand, the Appellate Division will have to determine whether omission of that charge was clearly capable of producing an unjust result and whether the substantive standards in respect of punitive damages were fully and completely addressed by the trial court. (pp. 36-37) 12. The trial court's dismissal of the discrimination claims against the individual defendants did not constitute an abuse of discretion. (pp. 37-38) Judgement of the APPELLATE DIVISION reversing Mogull's award of compensatory damages is REVERSED, and the trial court's verdict of compensatory damages is REINSTATED. The case is REMANDED to the Appellate Division for further proceedings in accordance with this opinion. CHIEF JUSTICE PORITZ and JUSTICES O'HERN, STEIN, COLEMAN, LONG, and VERNIERO join in JUSTICE GARIBALDI's opinion. MARTHA MOGULL, Plaintiff-Appellant, v. CB COMMERCIAL REAL ESTATE GROUP, INC., GARY BEBAN, FRED SCHMIDT, JOHN FOSTER, JAMES J. DIDION, BOYD VAN NESS and STEVEN FLEMING, Defendants-Respondents, and HAROLD APPEL, EDWARD HIGHERS and JOHN DOES 1-5, (said names being fictitious and unknown), Defendants. ___________________________________ Argued November 30, 1999 -- Decided February 16, 2000 On certification to the Superior Court, Appellate Division, whose opinion is reported at 319 N.J. Super. 53 (1999). Bruce L. Atkins argued the cause for appellant (Contant, Scherby &amp; Atkins, attorneys; Andrew T. Fede, on the briefs). Donald P. Jacobs argued the cause for respondents (Budd Larner Gross Rosenbaum Greenberg &amp; Sade, attorneys; Carl Greenberg, of counsel). The opinion of the Court was delivered by GARIBALDI, J. Rule 1:7-2 provides that no party may urge as error any portion of the charge to the jury or omissions therefrom unless objections are made thereto before the jury retires to consider its verdict. CB made no objection during the charge conference or at any other time before the jury retired either to the jury instructions or the verdict sheet incorporating the description of its burden of production. Accordingly, we must determine whether the trial court's decision was plain error, error of such a nature as to have been clearly capable of producing an unjust result. R. 2:10-2. The jury charge should set forth an understandable and clear exposition of the issues. Campos v. Firestone Tire and Rubber Co., 98 N.J. 198, 210 (1984). There is no reversible error where the charge, considered as a whole, adequately conveys the law and is unlikely to confuse or mislead the jury, even though part of the charge, standing alone, might be incorrect. Fischer v. Canario, 143 N.J. 235, 254 (1996). The court repeatedly instructed the jury that Mogull, to prevail, had to prove all her allegations and so adequately conveyed the law of the ultimate issue to the jury. The court's charge tracks the language of the Model Jury Charge with near exactitude. See Model Jury Charge (Civil), 2.21-2.23. That model, like the court's charge, repeatedly assigns the ultimate burden of proof to the plaintiff, and leaves no doubt that a plaintiff who fails to prove discrimination by a preponderance of the evidence loses. In concluding that the jury might have been misled into believing that CB had to prove that its reasons were true, the Appellate Division quotes, for example, the trial court's statement that all parties in this case have the burden of proving their allegations at trial. Mogull, supra, 319 N.J. Super. at 68. The Appellate Division also found fault with the trial court's direction that CB's articulated reasons for its actions with respect to the three transactions if true [would] constitute a legitimate, nondiscriminatory basis for defendant's actions. Id. at 69.See footnote 22 Those statements did not manifestly overcome the court's insistence that Mogull bore the burden of persuasion. Specifically, on the burden of persuasion, the court said: the burden is on the plaintiff in a civil action such as this to prove every essential element of her claim or claims by a preponderance of the credible evidence. . . . If yes, proceed to #2(d). If no, proceed to #2(e). 2.(d) Do you find by a preponderance of the evidence that plaintiff, Martha Mogull, has proved by a preponderance of the evidence that defendant's legitimate, non-discriminatory reasons were a pretext or cover-up for sex discrimination relating to the event(s) checked off in #2(b) above? If no, proceed to #3. If yes, proceed to #2(e). 2.(e) What amount of money would fairly and reasonably compensate the plaintiff for damages proximately caused by denial of benefits relating to the event(s) checked off in #2(b) above which may include emotional distress? $ 500,000 Interrogatory 3(c) is identical to 2(c), referring to defendant's alleged retaliatory discharge of defendant. This Court considered the application of the Fischer standard that a charge, to be reversible error, must inadequately state the law and tend to confuse or mislead the jury, see supra at ___ (slip op. at ___), to interrogatories in Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396 (1997), and found that interrogatories, like any other instructions to a jury, were not grounds for a reversal unless they were misleading, confusing or ambiguous. Id. at 418. The interrogatories that CB urges as error here were presented to both parties' counsel the day before they were given to the jury. The court went over the interrogatories word by word in a charge conference that appears from the record to have lasted an entire afternoon. Both parties objected to other material in the interrogatories, but, despite having had the interrogatories for their consideration overnight, CB's lawyers never objected to them until the post-trial motions for new trial and judgment notwithstanding the verdict. Accordingly, we may only reverse the verdict if the trial court's actions in phrasing the interrogatories the way it did constituted plain error. R. 1:7-2. Thus, we must determine whether the interrogatories were so misleading, confusing, or ambiguous that they produced an unjust result. In asking the jury whether CB had articulated or advanced one or more legitimate, non-discriminatory reasons for its decision(s) after the standard [d]o you find by a preponderance of the credible evidence, the court led the jury to consider CB's submissions under the standard of preponderance of the evidence. Because a LAD defendant, like a Title VII defendant, does not have to prove stage two of the McDonnell Douglas test by a preponderance of error, the special interrogatories were erroneous. Mogull admitted as much in her brief to the Appellate Division. In McDonnell Douglas, the Supreme Court described the burden the employer faces after the plaintiff has established a prima facie case as that of articulat[ing] some legitimate, nondiscriminatory reason for the employment action. 411 U.S. at 802, 93 S. Ct. at 1824, 36 L. Ed. 2d at 678. Further cases have amplified the Supreme Court's holding. In Furnco Constr. Corp. v Waters, 438 U.S. 567, 578, 98 S. Ct. 2943, 2950, 57 L. Ed. 2d 957, 968 (1978), the Court held that [t]o dispel the adverse inference from a prima facie showing under McDonnell Douglas, the employer need only 'articulate some legitimate, nondiscriminatory reason.' (emphasis added). Three years later, in Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct 1089, 67 L. Ed. 2d 207 (1981), the Supreme Court stated that the defendant met its burden if its evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff. Id. at 254, 101 S. Ct. at 1094, 67 L. Ed. 2d at 216. According to the Court, the deciding factor in the analysis of the defendant's proffered reasons was whether they were legally sufficient to justify a judgment for the defendant. Id. at 255, 101 S. Ct. at 1094, 67 L. Ed. 2d at 216 (emphasis added). The Supreme Court clarified this position in Saint Mary's Honor Center v. Hicks, 509 U.S. 502, 113 S. Ct. 2742, 125 L. Ed. 2d 407 (1993), saying that the defendant must 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. Id. at 507, 113 S. Ct. at 2747, 125 L. Ed. 2d at 416. The Hicks Court held that defendants met their burden [b]y producing evidence (whether ultimately persuasive or not) of non-discriminatory reasons. Id. at 509, 113 S. Ct. at 2748, 125 L. Ed. 2d at 417. The resulting burden has been described as so light as to be little more than a mechanical formality; a defendant, unless silent, will almost always prevail. Developments in the Law--Employment Discrimination: Shifting Burdens of Proof in Employment Discrimination Litigation, 109 Harv. L. Rev. 1579, 1590 (1996). The court thus erred in requiring CB to prove, instead of produce, its reasons. For CB to prevail on appeal, however, it must demonstrate that the error was plain error that produced an unjust result. The unjust result alleged by CB to have occurred was the jury's verdict in favor of Mogull. We must consider what would have happened had the jury properly found that CB had met its burden of production. The jury, then in stage three of the McDonnell Douglas procedure, would have been free to consider the credibility of CB's evidence in determining whether its asserted reasons were pretextual excuses for intentional discrimination. For the result to be unjust, then, we must find that in the third stage, the jury would have found that Mogull failed to prove her case by a preponderance of the credible evidence. This record does not compel such a finding. We agree with CB's contention, quoting Hicks, that [i]n the nature of things, the determination that a defendant has met its burden of production . . . can involve no credibility assessment, 509 U.S. at 509, 113 S. Ct. at 2748, 125 L. Ed. 2d at 417, and therefore in most circumstances, a finding that a defendant had failed to meet its burden of production would not equate to a plaintiff's proving that the defendant had discriminated. In this case, however, the interrogatories invited the jury to consider credibility and, therefore, pretext, at the second stage. This was a long trial. It lasted from September 30 to November 20, 1996. The jury heard twenty-eight days of argument and testimony. In response to the questions on the jury verdict sheet concerning whether defendant articulated non-discriminatory reasons for its decisions, the jury answered no. In accordance with the verdict sheet instructions, the jurors omitted to answer the question whether plaintiff sustained the burden of proving that defendant's reasons were a cover-up for gender discrimination, and proceeded instead to determine the amount of damages that would fairly compensate plaintiff. We are persuaded that the jury's recorded determinations on the verdict sheet, including the ultimate award of damages, necessary reflected the jury's conclusion not only that defendant's proffered reasons were pretextual, but also that plaintiff sustained her burden of proving intentional discrimination based on her gender. We note that the trial court repeatedly instructed the jury that in order to return a verdict in plaintiff's favor the plaintiff must prove by a preponderance of the credible evidence that the stated reason or reasons was not the true reason but is only a pretext or excuse for discriminating against the plaintiff because of her gender. Instructions communicating that burden of proof permeated the trial court's charge to the jury. In our view, the jury clearly understood that plaintiff could not prevail in this litigation unless she proved intentional discrimination because of gender, notwithstanding defendant's asserted reasons for its action. In that context, the jury's responses on the verdict sheet - specifically, its responses to questions 2(c) and 2(e), and to questions 3(c) and 3(e) - fairly reflect its conclusion, consistent with the court's instructions, that plaintiff sustained her burden of proving intentional discrimination based on her gender. In Sons of Thunder, supra, the Court determined that a correct jury charge can cure an ambiguity in a jury interrogatory. 148 N.J. at 415-20. The interrogatory there asked whether defendant breached its obligation of good faith and fair dealing . . . in terminating the Contract. Id. at 412. In view of the pre-charge conference and the instructions to the jury, the Court was satisfied that the jury understood that this question referred to a breach of the covenant of good faith and fair dealing in performing the contract. Id. at 420. Similarly here, the correct and thorough charge prevented any misunderstanding regarding plaintiff's burden to prove intentional discrimination. The trial court had repeatedly (more than twenty times) instructed the jury that the burden of proof lay with Mogull. That insistence in the court's instructions cured whatever defect the interrogatories may have introduced. Moreover, the jury's decision and the verdict in favor of plaintiff were supported by the evidence and did not constitute a miscarriage of justice. Defendant's motion for a new trial was thus properly denied. [i]n future LAD cases, courts reviewing punitive damages awards should apply both the requirements of the PDA (with the exception of the statutory cap) and the substantive standards of BMW v. Gore in order to ensure that any award of punitive damages bears some reasonable relation to the injury inflicted. In this case the jury awarded substantial punitive damages to Mogull. Without objection, the trial court submitted the case to the jury without a specific instruction that jurors were required to find that upper management had actually participated in, or been willfully indifferent to, the wrongful conduct. Such a charge is particularly important when the wrongful conduct, as here, was committed allegedly by many different employees, with varying titles in CB, a large commercial real estate corporation, where there are brokers, agents, and many supervisory personnel. See Re/Max of New Jersey v. Wausau Ins. Co., etc. (discussing whether licensed real estate salespersons should be considered employees or independent contractors for purposes of computing workers' compensation insurance premiums). Because the Appellate Division found that the entire case had to be retried, it did not decide defendant's punitive damage claim, but specifically observed that on retrial, we assume the punitive damage jury charge will reflect our decision in Maiorino v. Schering-Plough Corp. , 319 N.J. Super. at 57. In that case punitive damages could not be assessed against the employer because the jury had not been given an upper management charge. Maiorino v. Schering Plough Corp., 302 N.J. Super. 323, 355 (App. Div.), certif. denied, 152 N.J. 189 (1957). Because the trial court did not give the upper management charge, that issue arises as plain error under Rule 2:10-2. Therefore, the Appellate Division on remand will have to determine whether the omission of the Lehmann upper-management charge was clearly capable of producing an unjust result. The Appellate Division also will have to determine whether the substantive standards of BMV v. Gore were fully and completely addressed by the trial court. NO. A-107 MARTHA MOGULL, Plaintiff-Appellant, v. CB COMMERCIAL REAL ESTATE GROUP, INC., et al., Defendants-Respondents, and HAROLD APPEL, et al., Defendants. DECIDED February 16, 2000 Chief Justice Poritz