Court Opinion

ID: 9561729
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:14:53.295837+00
Date Added: 2024-06-11T09:14:19.333580
License: Public Domain

CAMERON, Justice.
This is a petition for review of a memorandum decision of the court of appeals which reversed a trial court judgment in petitioner Leta Fay Ford’s favor. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3), A.R.S. § 12-120.24 and Rule 23, Ariz.R.Civ.App.P., 17A A.R.S.
We granted the petition for review to consider three questions raised by Ford. Because of the disposition of the case, we find we need consider only two of these questions:
1. May an employer be held independently liable when its supervisor is found not guilty of intentional infliction of emotional distress?
2. May the failure of an employer to take appropriate action in response to an employee’s complaints of sexual harassment by a supervisory employee constitute the tort of intentional infliction of emotional distress?
Although not considered by the court of appeals because its disposition made it unnecessary, the following questions were raised by the parties and briefed by them. We consider them now.
3. Is this matter controlled by Arizona’s Workers’ Compensation Act?
4. Is Ford entitled to attorney’s fees?
FACTS
Leta Fay Ford worked for the purchasing department of Revlon, Inc. (Revlon) in Phoenix, Arizona. She began her employment in 1973 as a secretary. She worked her way up to junior buyer and buyer positions over the ten years of her employment at Revlon. In October 1979, Revlon hired Karl Braun as the new manager for the purchasing department, which made him Ford’s supervisor.
On 3 April 1980, Braun invited Ford to a dinner ostensibly to discuss business away from the office. Ford agreed and met Braun at a Phoenix restaurant. The business discussion, however, turned to more personal topics. At the end of the dinner, Ford started to leave. Braun told her that she was not going anywhere and to sit down because he planned to spend the night with her. When Ford rejected his advances, Braun told her, “you will regret *40this.” Ford testified at trial that after this incident her working relationship with Braun was strained and uncomfortable. Ford did not report the dinner incident nor the adverse working atmosphere to Revlon management.
On 3 May 1980, Revlon held its annual service awards picnic. Braun followed Ford for most of the day. At one point, Braun approached Ford as she was sitting on a picnic table with friends and put his face next to hers and said, “I want to fuck you, Leta.” Ford replied, “never in a million years” to which Braun continued, “I am going to fuck you if it takes me ten years.” Later that afternoon, as Ford and a friend were leaving the ladies room, Braun grabbed Ford and restrained her in a chokehold with his right arm, pulling Ford back a few steps. Braun ran his left hand over Ford’s breasts, stomach, and between her legs. Braun repeatedly told Ford, “I want to fuck you. I am going to fuck you.” As the struggle continued, Ford’s friend intervened by yanking Braun’s arm away which loosened his hold enough so that Ford could wrench herself free and run away.
Later in May of 1980, Ford began a series of meetings with various members of Revlon management to report her complaints. Ford first spoke with the Phoenix Revlon comptroller, Robert Lettieri, who had authority to recommend hiring, firing, discipline, and promotions. Ford told him about the incidents with Braun and that she was afraid of Braun and wanted help. Lettieri said that he would speak to someone in personnel about her complaint and that she also should talk to personnel.
In early June of 1980, Ford spoke to Cecelia Domin, the personnel manager for the clerical and technical group in the Phoenix plant. In the Revlon management hierarchy, Domin reported directly to the director of personnel and worked with the plant manager of executives. When meeting with Domin, Ford was very emotional, her hands were shaking, and she was crying. Ford told Domin about the incidents and said that she was afraid of Braun. On 23 June 1980, Ford spoke to Robert Kosciusko, the personnel manager for executives. Ford also told him about the incidents, that she was afraid of Braun, and that the strain was making her sick.
In August of 1980, Ford met again with Domin and additionally with Martin Bur-stein, the director of personnel at the Phoenix plant. Again Ford complained about the incidents and told them that she was afraid of Braun. Burstein told Ford that he would talk to a Revlon vice president and that he would get back to her. Also in August, Ford spoke to John Maloney, a manager in receiving and stores. Maloney suggested that Ford contact Marie Kane at Revlon headquarters in New Jersey. Kane, a manager of human resources, was a “trouble shooter” and a veteran of the Phoenix personnel department.
In November of 1980, Ford telephoned Kane in New Jersey to report her concerns about Braun and her frustrations about the work situation. At this time, it had been six months since Ford first complained of Braun’s conduct and no action had been taken. Kane then reported the details of her conversation with Ford to her boss, David Coe, the vice-president of industrial relations and operations. Kane also informed Coe that Ford was becoming ill because of the problem. Coe’s response was that the matter was not their concern at the corporate level and that the matter should be sent back to the local level and handled in Phoenix. Coe instructed Kane to telephone Burstein so that he could solve the problem. Kane did speak to Burstein, who promised to take care of the problem immediately.
When, as of December 1980, no action had been taken on Ford’s complaint, Ford telephoned Kane again and informed her that Braun was continuing his harassment by calling her into his office and telling her that he wanted to destroy her, that she made him nervous, and that so long as she worked for him she was never going to go anywhere. He also called her into his office and did not allow her to sit down and would stare at her and not speak to her. According to Ford, Kane responded that it was a lot to absorb and that she would *41have to talk with someone else about it and that she would get back to Ford. After a few days had elapsed and Kane had not telephoned Ford, Ford again called Kane, who was out, and left a message. It was January 1981 before Kane returned Ford’s call. Kane told Ford that the situation was too hot for her to handle and that she did not want to be involved. Kane suggested that Ford put the matter in the back of her mind and try to forget the situation.
Around this time, Ford also contacted Gene Tucker, a corporate Equal Employment Opportunity (EEO) specialist, and asked him for help. Tucker said that he would have to talk to Harry Petrie, the vice-president of industrial relations and personnel in New York. Tucker did not get back to Ford.
During the time of the harassment, Ford developed high blood pressure, a nervous tic in her left eye, chest pains, rapid breathing, and other symptoms of emotional stress. Ford felt weak, dizzy, and generally fatigued. Ford consulted a physician about her condition.
On 23 February 1981, Ford submitted a written request for a transfer out of the purchasing department. On 24 February 1981, Braun placed Ford on a 60-day probation because of her allegedly poor work performance. On 25 February 1981, a meeting finally was held in personnel at Ford’s demand so she could have something done about her situation with Braun. Ford was able to have Tucker arrange a meeting with them and with Domin and Burstein. Ford again gave the details of her complaint against Braun and her fear of him. Ford also submitted a handwritten complaint which read in part:
I want to officially register a charge of sexual harassment and discrimination against K. Braun.
I am asking for protection from Karl Braun. I have a right to be protected.
I am collapsing emotionally and physically and I can’t go on.
At this meeting on 25 February 1981, Braun was called in and confronted. After the meeting, Burstein and Domin told Ford that Braun would be closely monitored. Burstein also testified that he investigated Ford’s allegation, which he said took him about three weeks.
Not until three months later, on 8 May 1981, however, did Burstein submit a report on Ford’s complaint to Vice-President Coe; the report confirmed Ford’s charge of sexual assault and recommended that Braun be censured. On 28 May 1981, a full year and one month after Braun’s initial act of harassment, Braun was issued a letter of censure from Revlon.
In October of 1981, Ford attempted suicide.
On 5 October 1981, Revlon terminated Braun. Braun testified at trial that the reason given him for his termination was that he did not fit into the Revlon organization, partially because of the way he handled the “Ford situation.”
In April of 1982, Ford sued both Braun and Revlon for assault and battery, and for intentional infliction of emotional distress. At trial, two written personnel policies were admitted as evidence. One policy concerning employee complaints, which became effective as of 1 July 1976, provided in part the following:
I. Policy
Any employee who has a complaint about any aspect of his or her employment is entitled to have the complaint heard, investigated and, if possible, resolved.
******
II. Procedure
******
C. Legitimate complaints are to be satisfied as promptly and as fully as possible. When a complaint is not valid, or when the resolution would require an unwarranted breach of company policy or precedent, then the employee must nevertheless be given a prompt explanation of the circumstances which make it impossible for the company to satisfy the complaint.
The second policy, effective as of 16 April 1981, defined sexual harassment in accordance with the Equal Employment Opportu*42nity Commission (EEOC) guidelines and provided that personnel executives who were made aware of allegations of sexual harassment
are responsible for investigating the allegations promptly, fully and with the highest degree of confidentiality and for taking other appropriate personnel actions to deal with alleged violations or for referring them to higher authority for disposition.
The jury found Braun liable for assault and battery but not liable for intentional infliction of emotional distress. The jury found Revlon liable for intentional infliction of emotional distress but not liable for assault and battery. Damages awarded to Ford by the jury were assessed against Braun in the amount of $100 compensatory damages and $1,000 punitive damages, and assessed against Revlon in the amount of $10,000 compensatory damages and $100,-000 punitive damages. Only Revlon appealed. Therefore, the only issue on appeal was whether Revlon was liable for intentional infliction of emotional distress. The court of appeals in a memorandum decision reversed the judgment of the trial court, holding that since Braun (as agent) was found not guilty of intentional infliction of emotional distress, then Revlon (as principal) could not be found guilty. We granted review because we disagreed with this limitation on the liability of Revlon.
INDEPENDENT TORT LIABILITY OF THE EMPLOYER
The court of appeals held that Revlon could not be liable for intentional infliction of emotional distress if Braun was not liable. The court of appeals stated:
Even though the jury found Braun did assault Ford on May 3, 1980, it found that the assault and his subsequent acts, whatever they were found to be, were insufficient to hold him liable for intentional or reckless infliction of emotional distress. Revlon’s liability is inextricably tied to the acts of Braun. Since Braun’s acts did not constitute intentional or reckless infliction of emotional distress, then the inaction of Revlon on Ford’s complaint certainly could not reach that level.
We disagree. Admittedly, when the master’s liability is based solely on the negligence of his servant, a judgment in favor of the servant is a judgment in favor of the master. DeGraff v. Smith, 62 Ariz. 261, 157 P.2d 342 (1945). When the negligence of the master is independent of the negligence of the servant, the result may be different. As noted by the court of appeals:
We recognize that where there is independent negligence on the part of the master, the master may be liable, apart from his derivative liability for his servant’s wrongful acts. Siebrand v. Gossnell, 234 F.2d 81 (9th Cir.1956); First National Bank v. Otis Elevator Co., 2 Ariz.App. 80, 406 P.2d 430 (1965), opinion on rehearing, 2 Ariz.App. 596, 411 P.2d 34 (1966). In such a case, a judgment in favor of the servant will not ordinarily bar a recovery against the master. However, the master must have “ ‘been guilty of acts on which independently of the acts of the servant, liability may be predicated.’ ”
(Emphasis supplied). DeGraff v. Smith, 62 Ariz. 261, 266, 157 P.2d 342, 344 (1945).
Torres v. Kennecott Copper Corporation, 15 Ariz.App. 272, 274, 488 P.2d 477, 479 (1971).
We believe that the analysis should be the same in intentional tort cases. In a case factually similar to this one, the U.S. Court of Appeals for the Fourth Circuit recognized that a corporation could be liable for intentional infliction of emotional distress because its supervisor was aware of the sexual harassment of an employee by a manager and failed to stop it even though the underlying harassment might not rise to the level of either assault and battery or intentional infliction of emotional distress. Davis v. United States Steel Corp., 779 F.2d 209, 211 (4th Cir.1985). The Fourth Circuit held that although the acts and behavior of the manager were despicable, they did not rise to the level of providing a basis for recovery by the com*43plainant against the corporation for assault and battery or intentional infliction of emotional distress. The court went on to say, however, that “the situation is otherwise with respect to [the employer] and [its] failure to take any action.” Id. at 212. We believe that Revlon’s failure to investigate Ford’s complaint was independent of Braun’s abusive treatment of Ford. Annotation, Liability of Employer, Supervisor, or Manager for Intentionally or Recklessly Causing Employee Emotional Distress, 86 A.L.R.3d 454, 457 (1978).
IS REVLON LIABLE FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS?
The Restatement of Torts recognizes that conduct which is extreme and outrageous may cause severe emotional distress for which one may be subject to liability. Restatement (Second) of Torts § 46(1) (1965). The Restatement also states that the tort of emotional distress inflicted intentionally or recklessly is recognized as a separate and distinct basis of tort liability. There is no need to show elements of other torts such as assault and battery. Restatement (Second) of Torts § 46 comment b (1965). A comment to § 46 states that there is liability:
where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community ... in which ... an average member of the community would ... exclaim, “Outrageous!”
Id. comment d. We have followed this standard for liability. See, e.g., Continental Life & Acc. Co. v. Songer, 124 Ariz. 294, 603 P.2d 921 (App.1979); Rosales v. City of Eloy, 122 Ariz. 134, 593 P.2d 688 (App.1979); see also Watts v. Golden Age Nursing Home, 127 Ariz. 255, 619 P.2d 1032 (1980); accord Stewart v. Thomas, 538 F.Supp. 891 (D.D.C.1982).
More specifically, intentional infliction of emotional distress is often based upon claims of sexual harassment, 1 L. Larson, Employment Discrimination § 41.67(b), at 8-148 (1984). The failure of an employer to promptly investigate complaints of sexual harassment is significant in making a determination to impose liability on an employer for its supervisors’ acts of sexual harassment. B. Schlei & P. Grossman, Employment Discrimination Law 427 (2d ed. 1983).
Elements of the tort of intentional infliction of emotional distress have been set out by this court, relying upon the language of the Restatement of Torts. Savage v. Boies, 77 Ariz. 355, 272 P.2d 349 (1954). The three required elements are: first, the conduct by the defendant must be “extreme” and “outrageous”; second, the defendant must either intend to cause emotional distress or recklessly disregard the near certainty that such distress will result from his conduct; and third, severe emotional distress must indeed occur as a result of defendant’s conduct. Watts v. Golden Age Nursing Home, 127 Ariz. at 258, 619 P.2d at 1035. Accord Lucchesi v. Stimmel, 149 Ariz. 76, 78-9, 716 P.2d 1013, 1015-16 (1986).
We believe that the conduct of Revlon met these requirements. First, Revlon’s conduct can be classified as extreme or outrageous. Ford made numerous Revlon managers aware of Braun’s activities at company functions. Ford did everything that could be done, both within the announced policies of Revlon and without, to bring this matter to Revlon’s attention. Revlon ignored her and the situation she faced, dragging the matter out for months and leaving Ford without redress. Here is sufficient evidence that Revlon acted outrageously.
Second, even if Revlon did not intend to cause emotional distress, Revlon’s reckless disregard of Braun’s conduct made it nearly certain that such emotional distress would in fact occur. Revlon knew that Braun had subjected Ford to physical assaults, vulgar remarks, that Ford continued to feel threatened by Braun, and that Ford was emotionally distraught, all of which led to a manifestation of physical problems. Despite Ford’s complaints, Braun was not confronted for nine months, *44and then only upon Ford’s demand for a group meeting. Another three months elapsed before Braun was censured. Revlon not only had actual knowledge of the situation but it also failed to conduct promptly any investigation of Ford’s complaint.
Third, it is obvious that emotional distress did occur. Ample evidence, both medical and otherwise, was presented describing Ford’s emotional distress. Ford testified about her emotional distress and her development of physical complications caused by her stressful work environment. The evidence convinced the jury, which found that emotional distress had occurred.
We also note that Revlon had set forth a specific policy and several guidelines for the handling of sexual harassment claims and other employee complaints, yet Revlon recklessly disregarded these policies and guidelines. Ford was entitled to rely on the policy statements made by Revlon. Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 383, 710 P.2d 1025, 1038 (1985). Once an employer proclaims a policy, the employer may not treat the policy as illusory. Leikvold v. Valley View Community Hosp., 141 Ariz. 544, 548, 688 P.2d 170, 174 (1984) (suit by at-will employee against employer for breach of employment contract and defamation). We hold that Revlon’s failure to take appropriate action in response to Ford’s complaint of sexual harassment by Braun constituted the tort of intentional infliction of emotional distress.1
ARIZONA WORKER’S COMPENSATION LAW
Revlon contends that this matter is controlled by Arizona Workers’ Compensation laws and not by tort law. We disagree. Ford’s severe emotional distress injury was found by the jury to be not unexpected and was essentially nonphysical in nature. As the trial court stated:
Evidence established that this tort was committed through defendant’s action and inaction to plaintiff’s complaints made over a period in excess of eight months. Such action and inaction and the resulting emotional injury to the plaintiff were therefore not “unexpected,” accidental, or physical in nature so as to limit plaintiff’s recovery to the workmen’s compensation claim under A.R.S. §§ 23-1021(B) and 1043.01(B).
Ford v. Revlon, Inc., No. C-457854, slip op. at 15 (Super.Ct. Maricopa County, June 15, 1984). A.R.S. § 23-1021(B) provides, in relevant part, that
Every employee covered by insurance in the state compensation fund who is injured by accident arising out of and in the course of employment ... shall be paid such compensation____
(Emphasis added). A.R.S. § 23-1043.01(B) sets forth the limiting standard for compensation under the statute for physiological injury. This section states: “A mental injury ... shall not be considered a personal injury by accident ... and is not compensable ... unless ... unexpected, unusual or extraordinary stress ... or some physical injury ... was a substantial contributing cause.”
The acts by Braun and Revlon were not “accidents.” Indeed, the jury found both parties liable for the intentional offenses in which they engaged: Braun for assault and battery and Revlon for emotional distress. An injured employee may enforce common-law liability against his or her employer if not encompassed by statute. Twohy Bros. Co. v. Rogers, 293 F. 566 (9th Cir.1923).
ATTORNEY’S FEES
Cases which involve extreme and outrageous intentional invasions of an individual’s “mental and emotional tranquility” allow recovery solely for the emotional distress absent any consequential physical in*45juries. Alcorn v. Anbro Engineering Inc., 2 Cal.2d 493, 499, 468 P.2d 216, 218, 86 Cal.Rptr. 88, 90 (1970). In Arizona, an action in tort for personal injuries may be brought where a complainant can establish a breach of a duty and injuries proximately caused by the breach. Maldonado v. Southern Pacific Transp. Co., 129 Ariz. 165, 629 P.2d 1001 (App.1981). The jury in the instant case properly decided and awarded damages and costs.
The trial judge awarded attorney's fees to Ford pursuant to statute, which reads:
§ 12-341.01. Recovery of attorney’s fees
A. In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney’s fees.
* * * * * *
D. Reasonable attorney’s fees awarded under the provisions of this section shall be awarded by the court and not by a jury.
This statute allows attorney’s fees only in the case of breach of contract, express or implied. In the instant case, the tort of intentional or reckless conduct was based in part on the violation of the policies and procedures concerning employee complaints adopted by Revlon and which amounted to an implied contract between Revlon and its employees.
Our court of appeals has stated:
In our opinion this issue is controlled by Sparks v. Republic National Life Ins. Co., 132 Ariz. 529, 647 P.2d 1127 (1982). In Sparks an action was brought by an insured against their insurer alleging in part a bad faith denial of insurance coverage, a tort. After specifically disavowing the holding in Amphitheater Public Schools v. Eastman, 117 Ariz. 559, 574 P.2d 47 (App.1977), the court held that the test to be applied in determining whether the “arising out of contract” language of A.R.S. § 12-341.01 is applicable is whether the “action in tort could not exist but for the breach of the contract.” 647 P.2d at 1141. (emphasis in original). If this test is met, attorney’s fees are awardable under the statute.
Trebilcox’s cause of action in tort was for breach of a fiduciary relationship arising out of an attorney-client contract. Implicit in that action was the existence of an attorney-client relationship based upon the contract and a breach of the contractual duty to exercise the utmost honesty, good faith, fairness, integrity and fidelity to the client. Parsons v. Continental National American Group, 113 Ariz. 223, 550 P.2d 94 (1976). It is thus clear that the Trebilcox cause of action for tort could not exist but for the breach of the attorney-client contract. Under such circumstances attorney’s fees are available under A.R.S. § 12-341.01.
Trebilcox v. Brown & Bain, 133 Ariz. 588, 591, 653 P.2d 45, 48 (App.1982).
In the instant case, the tort of intentional infliction of emotional distress could not exist but for the breach of the contract implied by the policies and procedures announced by Revlon. The breach by Revlon of its own policies and procedures was part of the basis for the tort.
We concur with the trial court on the issue of attorney’s fees:
[T]he award of attorney’s fees to the plaintiff was based on the breach of an implied contract between the plaintiff and defendant, but for which the tort would have not occurred ... the award of attorney’s fees is authorized pursuant to A.R.S. § 12-341.01(A), Rule 54(d), Rules of Civil Procedure, and Trebilcox v. Brown and Bain, 133 AZ 588 [653 P.2d 45] (1982).
We agree. See also Wagenseller, supra.
The decision of the court of appeals is vacated. The judgment of the trial court is reinstated.
GORDON, C.J., and JACK D.H. HAYS, Retired J., concur.

. Concurrent with her state tort claim, Ford filed a federal Title VII claim based upon the same facts; Revlon contends that the dual filing is inappropriate. As the trial court noted, the exercise of dual jurisdiction in federal Title VII and state tort claims is entirely appropriate. Guyette v. Stauffer Chemical Co., 518 F.Supp. 521 (D.N.J.1981); Stewart v. Thomas, supra. We find no error in bringing the action in both state and federal courts based upon two separate and distinct causes of action.