Nelson v. Rehabilitation

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
AUG 21 1997
TENTH CIRCUIT
PATRICK FISHER
Clerk

JEANETTE NELSON,

Plaintiff-Appellee,

v. No. 96-8102

REHABILITATION ENTERPRISES
OF NORTH EASTERN WYOMING;
TERRY O'GORMAN,

Defendants-Appellants.

JEANETTE NELSON,

Plaintiff-Appellant,

v. No. 96-8105
(D.C. No. 95-CV-38)
REHABILITATION ENTERPRISES (D. Wyo.)
OF NORTH EASTERN WYOMING;
TERRY O'GORMAN,

Defendants-Appellees.

ORDER AND JUDGMENT *

*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Before BALDOCK, BRORBY, and BRISCOE, Circuit Judges.

Defendant Rehabilitation Enterprises of North Eastern Wyoming (RENEW)

appeals from a jury verdict and subsequent adjusted judgment in favor of plaintiff

Jeanette Nelson, a former RENEW employee, on her claims under Title VII for

retaliatory discharge and hostile work environment sexual harassment. Nelson

cross-appeals the district court's reduction of the jury's damage award in

accordance with the damages cap of 42 U.S.C. § 1981a(b)(3). We modify the

judgment in part and affirm as modified.

I.

RENEW is a private nonprofit corporation which provides services to the

disabled. RENEW hired Nelson in December 1992 as a part-time case manager in

its rehabilitation department. As part of her duties, Nelson worked on a grant

project with Terry O'Gorman, a supervisor and unit director in RENEW's

production department. According to Nelson, O'Gorman made unwelcome sexual

advances and remarks toward her during the course of their working relationship.

Nelson reported the harassment to Elbert Belish, her immediate supervisor, who

eventually reported the harassment to upper management. Based upon the reports,

Larry Samson, who was president of RENEW, met with O'Gorman, Belish, and

Nelson on separate occasions to discuss the accusations. No disciplinary action

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was taken against O'Gorman and no further sexual harassment was committed by

O'Gorman following these meetings.

In separate but related events, Nelson developed a friendship with Kyle

Dittmer, a temporary production worker hired by O'Gorman. Nelson provided

rides to Dittmer to and from work and to and from counseling sessions and the

two shared personal problems. In addition, Nelson at times engaged in sexual

banter with Dittmer. Although Belish allegedly believed Nelson was providing

case management services to Dittmer, Nelson did not view her relationship with

Dittmer as part of her position at RENEW. Dittmer eventually ended the

relationship and informed O'Gorman that Nelson had been sexually harassing him.

O'Gorman reported Dittmer's complaint to upper management and Jim Stewart,

the human resources manager, was assigned to investigate. Samson met with

Nelson after Stewart had completed his investigation and decided to discharge

Nelson.

Nelson filed this action against RENEW and O'Gorman. The jury awarded

Nelson $90,000 on her sexual harassment claim and $100,000 on her retaliatory

discharge claim. The jury rejected Nelson's claim against O'Gorman for

intentional infliction of emotional distress. After apportioning the jury's

retaliatory discharge award into back pay and other components, and after

applying the damages cap set forth in 42 U.S.C. § 1981a(b)(3)(B), the district

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court entered judgment in favor of Nelson in the amount of $139,000.00. In a

separate order, the court also awarded attorney fees and costs to Nelson as a

"prevailing party" under 42 U.S.C. § 2000e-5(k).

II.

A. RENEW's Appeal

1. Sufficiency of evidence to support verdict on retaliatory discharge claim

RENEW argues the district court erred in denying its motion for judgment

as a matter of law on Nelson's retaliatory discharge claim. Although RENEW

does not challenge Nelson's ability to establish a prima facie case of retaliation, it

contends Nelson presented insufficient evidence of pretext to rebut RENEW's

proffered nonretaliatory reason for dismissing her and, accordingly, the evidence

was insufficient to support the jury's verdict in favor of Nelson.

We review de novo the district court's denial of a motion for judgment as a

matter of law, applying the same standard as the district court. Mason v.

Oklahoma Turnpike Authority, 115 F.3d 1442, 1450 (10th Cir. 1997); Considine

v. Newspaper Agency Corp., 43 F.3d 1349, 1363 (10th Cir. 1994). "Under this

standard, judgment as a matter of law is warranted only if the evidence points but

one way and is susceptible to no reasonable inferences supporting the party

opposing the motion." Mason, 115 F.3d at 1450. In conducting our review, "we

can neither assess the credibility of witnesses nor substitute our judgment for that

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of the jury." Considine, 43 F.3d at 1363. "Instead, we must view the evidence

most favorably to [] the party against whom the Rule 50 motion was made, and

give [that party] the benefit of all reasonable inferences from the evidence." Id.

Although it is a close question whether Nelson provided a basis for the jury

to disbelieve RENEW's proffered reasons for discharge, we ultimately conclude

she did. It was uncontroverted that when Samson met with Nelson to discuss

Dittmer's accusations, he was armed with a memorandum from Stewart listing

allegations culled from a tape recording of a conversation between Nelson and

Dittmer. Stewart stated in the memorandum to Samson that "the fact that you

present this type of detail may deter her from further action." Append. II at 74.

Although RENEW's witnesses explained this ambiguous statement alluded to

deterring further sexual harassment by Nelson, we believe it possible that the jury

could interpret the statement as referring to Nelson's complaints against

O'Gorman and any potential legal action she may have contemplated filing as a

result of those complaints. The jury could also arguably have inferred retaliation

from the fact that Nelson and O'Gorman, though similarly situated as accused

sexual harassers, were treated differently by RENEW. See Murray v. City of

Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995) (differential treatment leading to

discharge of only one of similarly situated employees may establish improper

motive). Finally, the record contains ample evidence that, contrary to the

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testimony of RENEW's witnesses, Dittmer was only an employee of RENEW and

not Nelson's client. In light of this evidence, the jury could have concluded

RENEW was attempting to redefine a personal non-working relationship between

Nelson and Dittmer as one involving workplace sexual harassment in order to

discharge Nelson. Such a conclusion is not implausible when one considers the

key piece of evidence purportedly relied upon by RENEW in suspending and

discharging Nelson, i.e., a tape recorded conversation between Dittmer and

Nelson which was admittedly made after hours and away from work. These

inferences, bolstered by the close temporal proximity of Nelson's discharge

(December 21, 1993) to her complaint against O'Gorman (first described to Belish

on November 11, 1993; Samson met with Nelson on December 3, 1993) arguably

support a suspicion of mendacity. For these reasons, we conclude the district

court did not err in denying RENEW's motion for judgment as a matter of law

with respect to Nelson's retaliatory discharge claim. See St. Mary's Honor Center

v. Hicks, 509 U.S. 502, 511 (1993) (factfinder's disbelief of defendant's proffered

reason for discharge, together with elements of the prima facie case, suffice to

show intentional discrimination).

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2. Amount of back pay in jury's compensatory damage award on retaliatory
discharge claim

Although Nelson sought an award of back pay in connection with her

retaliatory discharge claim and the jury was instructed on back pay, the verdict

form did not ask for a specific determination of the amount of back pay damages.

Instead, the verdict form asked the jury to make a general determination of

damages Nelson had suffered in connection with her retaliatory discharge claim,

which under the court's instructions could have included back pay, front pay,

emotional pain and suffering, and loss of enjoyment of life. See Append. I at 120

(verdict form asks jury to determine "what amount of damages, if any, will

adequately compensate Nelson for her retaliatory discharge claim"). In response

to this question, the jury awarded Nelson $100,000 in damages. After trial, at the

urging of Nelson and over RENEW's objection, the court concluded Nelson was

entitled to two years of back pay at an annual salary of $19,500. Specifically, the

court concluded "Nelson asked for backpay, and the jury was instructed on back

pay," and "Nelson's evidence supports a jury finding that Nelson is entitled to two

years of back pay at an annual salary of $19,500." Append. I at 149.

Accordingly, the court found "the jury awarded Nelson a total of $39,000 in back

pay." Id. Although the court's finding is not entirely clear, we presume it

intended to provide that the $100,000 damage award on Nelson's retaliatory

discharge claim included an intended award of $39,000 for back pay.

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 On appeal, RENEW challenges the district court's decision to award

$39,000 in back pay after concluding the jury had made such an award. In

particular, RENEW argues the court could not properly enter judgment on a back

pay award because there is no way to determine whether the jury awarded any

back pay damages.

Because the district court's apportionment of the damage award occurred in

the context of applying the 42 U.S.C. § 1981a(b)(3) damages cap, we construe

RENEW's argument as a challenge to the court's application of the damages cap.

Although we have found no cases indicating what standard of review to apply in

such a case, see Jonasson v. Lutheran Child and Family Services, 115 F.3d 436,

441 (7th Cir. 1997) (affirming application of damages cap without stating

applicable standard of review), we find it unnecessary to decide the controlling

standard of review. Under any conceivable standard of review, it is clear the

court erred in finding the jury's $100,000 damage award included $39,000 for

back pay. At trial, the jury was instructed it could award damages for back pay

(as well as other types of damages), but it was also instructed that Nelson had a

duty to mitigate her damages. In light of these instructions, and in light of the

conflicting evidence concerning whether Nelson was capable of working after her

termination and whether she made reasonable attempts to find work after her

termination, the jury could have reached a variety of conclusions with respect to

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the issue of back pay (e.g., Nelson was entitled to full back pay for the twenty-

nine months between her termination and trial; partial back pay; no back pay). As

the court realized after trial, the verdict form should have asked the jury to

separate the damage components to allow easy and effective application of the

damages cap. Because the court did not do so and neither party objected to the

verdict form, see Kenworthy v. Conoco, Inc., 979 F.2d 1462, 1468 (10th Cir.

1992) (party may not take advantage of ambiguities created by jury instructions or

verdict form if party did not point out ambiguities to court prior to submission to

jury), we conclude the court should have treated the entire award as compensatory

damages subject to the damages cap. It would arguably have been appropriate for

the court to apportion the general award only if the evidence concerning Nelson's

entitlement to back pay, as well as the amount of the back pay, had been

uncontroverted. 1 Accordingly, we exercise our authority under 28 U.S.C. § 2106

to modify the judgment to allow only $100,000 in total damages. 2 See Wilmer v.

1
We do not conclusively decide whether such action on the part of a district court
would be appropriate. We do emphasize, however, that this situation can be avoided
entirely by use of a verdict form that asks the jury to make separate findings with respect
to each damage component.
2
Because of our affirmance of the jury's verdict in Nelson's favor on her Title VII
retaliatory discharge claim, combined with the fact that the jury's award of compensatory
damages on the retaliatory discharge claim is the maximum amount Nelson can recover
for all of her Title VII claims, it is unnecessary to reach the issues raised by RENEW
concerning Nelson's sexual harassment claim. Specifically, even if we were to resolve
these issues in RENEW's favor, it would not affect the compensatory damage award,
(continued...)

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Board of County Com'rs of Leavenworth County, 69 F.3d 406, 410 (10th Cir.

1995) (exercising inherent appellate authority under § 2106 to modify judgment

directly in order to obviate purely ministerial remand).

B. Nelson's Cross-Appeal

1. Application of damages cap to aggregate award of all claims

In her cross-appeal, Nelson contends the district court erred in applying the

damages cap. Specifically, Nelson argues the court erroneously applied the cap

by aggregating her damages and limiting her to $100,000 for all of her Title VII

claims. According to Nelson, the cap should be applied separately to each Title

VII claim and she should be entitled to the full award of $190,000.

We reject Nelson's argument. "[W]hen a statute speaks with clarity to an

issue[,] judicial inquiry into the statute's meaning, in all but the most

extraordinary circumstance, is finished." Estate of Cowart v. Nicklos Drilling

Co., 505 U.S. 469, 475 (1992). Here, the clear and unambiguous language of §

1981a(b)(3) indicates the cap applies "for each complaining party," not to each

(...continued)
2

which is limited to $100,000, and we could not provide any effectual relief. In addition,
because Nelson remains a "prevailing party" under 42 U.S.C. § 2000e-5(k), we find it
unnecessary to address RENEW's challenge to the court's award of attorney fees and
costs, which is based only upon the argument that Nelson should not have prevailed on
either claim and therefore no fees or costs should be awarded.

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claim. Thus, the court properly applied the cap ($100,000 in this case due to the

number of persons employed by RENEW) to the aggregate damages awarded on

both of Nelson's Title VII claims.

III.

The judgment is MODIFIED in part and AFFIRMED AS MODIFIED.

Nelson's motion to strike RENEW's docketing statement is DENIED.

Entered for the Court

Mary Beck Briscoe
Circuit Judge

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