(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).
CANDY RENDINE, ET AL. V. EDWARD PANTZER, d/b/a PANTZER MANAGEMENT COMPANY
(A-105-94)
(NOTE: This is a companion case to Szczepanski v. Newcomb Medical Center, Inc., et al. also
decided today.)
Argued March 13, 1995 -- Decided July 24, 1995
STEIN, J., writing for a unanimous Court.
Candy Rendine and Bernadette Lorestani (plaintiffs) brought an action pursuant to the New Jersey
Law Against Discrimination (LAD), seeking damages primarily on the basis that their employment was
wrongfully terminated by Pantzer because they had become pregnant. Plaintiffs claims were tried jointly and
the jury found that Pantzer had violated the LAD. Both Rendine and Lorestani recovered substantial
judgments, consisting of compensatory and punitive damages, prejudgment interest, counsel fees and costs.
Under the LAD's fee-shifting provision, the losing party must pay reasonable attorney's fees to the
attorney for the prevailing party. In February 1988, plaintiffs had entered into a retainer agreement with
their attorney that provided for a fee that was the greater of: 1) a specific hourly billing plus twenty-five
percent of plaintiffs' recovery; or 2) the amount of attorney's fees awarded by court pursuant to the fee-shifting provision of the LAD. In support of an application for counsel fees, plaintiffs' counsel certified that
the total hours expended on the litigation was 646.65, which was multiplied by the reasonable hourly rates of
the participating attorneys, resulting in a "lodestar" fee of $114,334.25. Counsel also set a fee of $28,634 for
post-judgment services and reimbursement for out-of-pocket disbursements.
To support the reasonableness of the lodestar fee, plaintiffs' counsel submitted certifications by
several lawyers in the firm to attest to the fact that the hourly rates used to calculate the lodestar were
consistent with the standard hourly rates for the participating lawyers. In addition, plaintiffs' counsel
submitted certifications from three experienced employment-law practitioners who provided estimates of the
hours required to litigate a plaintiff's employment-discrimination case. Those estimates either exceeded or
approximated the hours expended by plaintiffs' counsel.
The trial court found counsel's lodestar fee reasonable. In addition, the trial court determined that
plaintiffs had established their entitlement to enhancement of the lodestar fee, based on Lorestani's affidavit
concerning plaintiffs' difficulty in finding counsel, the affidavits of three unaffiliated attorneys attesting to the
need for contingent-fee enhancement, and the affidavit of plaintiffs' retained expert. Accordingly, the trial
court applied a multiplier of 2.0 to the lodestar fee, resulting in a prejudgment counsel-fee award of
$228,668.50.
Defendant moved for reconsideration of the trial court's decision to enhance the lodestar fee, relying
on the U.S. Supreme Court decision in City of Burlington v. Dague, which held that enhancement for a
contingency is not permitted under fee-shifting statutes. The trial court denied defendant's motion, declining
to adhere to Dague. The court reasoned that this Court, if presented with the same issue, would adopt the
reasoning of Justice Blackman's dissenting opinion in Dague that asserted that a statutory fee may include
additional compensation for contingency and still qualify as reasonable.
The Appellate Division affirmed the judgment of the trial court, although one member of the panel dissented only from the court's affirmance of the portion of the judgment reflecting the jury's award of
punitive damages. The Appellate Division affirmed the counsel fee award, agreeing with the trial court's
conclusion that the reasoning of Justice Blackman's dissent in Dague was more consistent with the objectives
of the LAD.
Pantzer appeals as of right from the judgment awarding punitive damages to Lorestani and Rendine.
The Court also granted Pantzer's petition for certification on the issues of joinder, adequacy of jury
instructions, emotional-distress damages, and the counsel-fee award.
HELD: In determining a reasonable fee under a fee-shifting statute, a trial court, after having carefully
established the amount of the lodestar fee, properly may enhance the lodestar fee in cases in which
the prevailing party's attorney's fee arrangement was predominantly contingent on a successful result.
1. The trial court's determination to deny severance of Lorestani's and Rendine's claims was a reasonable
exercise of its discretion; the jury charge, considered as a whole, constitutes a clear, understandable and
correct explanation of the applicable legal principles; and the Appellate Division properly concluded that the
trial court's evaluation of the compensatory damage award should not be disturbed since the emotional-distress-damage award was not excessive. (pp. 17-25)
2. In a discrimination suit under the LAD, to obtain a punitive damage award, plaintiff must prove actual
participation in or willful indifference to the wrongful conduct on the part of upper management; and proof
that the offending conduct was especially egregious. In this case, the trial court adequately charged the jury
with regard to punitive damages and the proofs were sufficient to sustain the punitive-damages award.
(pp. 25-30)
3. Under the LAD and other fee-shifting statutes, the most important step in the fee-setting process is to
determine the lodestar, which is the number of hours reasonably expended, multiplied by a reasonable hourly
rate. That requires the trial court to carefully evaluate the aggregate hours and specific hourly rates
advanced by counsel for the prevailing party to support the fee application, and in its discretion to exclude
excessive hours from the lodestar calculation. In addition, federal fee-shifting statutes do not require
proportionality between damages recovered and counsel fee awards, although damages recovered are a factor
bearing on the reasonableness of counsel fee awards. (pp. 35-60)
4. As a matter of economic reality and simple fairness, a counsel fee award under a fee-shifting statute
cannot be "reasonable" unless the lodestar, calculated as if the attorney's compensation were guaranteed
regardless of result, is adjusted to reflect the actual risk that the attorney will not receive payment if the suit
does not succeed. The Court adopts standards to guide the award of contingency enhancements that will
address concerns about overpayment and double counting. Those standards will serve as a limit on the
amount of contingency enhancements and will require a relationship between the amount of the
enhancement awarded and the extent of the risk of nonpayment assumed by counsel for the prevailing party.
(pp. 60-64)
5. The trial court must determine whether a case was taken on a contingent basis, whether the attorney was
able to mitigate the risk of nonpayment in any way, and whether other economic risks were aggravated by
the contingency of payment. It is the actual risk or burden that the lawyer bears that determines whether an
upward adjustment is called for. Attorneys who are paid a portion of their reasonable hourly fee irrespective
of the result, as well as attorneys who entered into contingency fee agreements with clients, have partially
mitigated the risk of non-payment. The trial court may take into account the likelihood of success and, if the
likelihood of success is unusually strong, a court may properly consider the inherent strength in the prevailing
party's claim in determining the amount of contingency enhancement. Moreover, there need not be evidence
in the record that without risk enhancement plaintiff would have faced substantial difficulties in finding
counsel in the local market. (pp. 64-68)
6. Contingency enhancements in fee-shifting cases ordinarily should range between five and fifty-percent of
the lodestar fee, with the enhancement in typical contingency cases ranging between twenty and thirty-five
percent of the lodestar. Here, the Court exercises original jurisdiction and modifies the counsel-fee award.
The lodestar fee is reasonable but the award of double the lodestar is excessive. Strong evidence supported
the jury's finding of unlawful discrimination, suggesting that the risk of non-payment was also somewhat
mitigated by the strength of plaintiffs' case. Thus, a contingency enhancement equal to one-third of the
lodestar fee is appropriate. (pp. 68-72)
As MODIFIED, judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and
COLEMAN join in JUSTICE STEIN's opinion.
SUPREME COURT OF NEW JERSEY
A-
105 September Term 1994
CANDY RENDINE and
BERNADETTE LORESTANI,
Plaintiffs-Respondents,
v.
EDWARD PANTZER, d/b/a
PANTZER MANAGEMENT COMPANY,
Defendant-Appellant.
Argued March 13, 1995 -- Decided July 24, 1995
On appeal from and on certification to the
Superior Court, Appellate Division, whose
opinion is reported at
276 N.J. Super. 398
(1994).
Paul A. Rowe argued the cause for appellant
(Greenbaum, Rowe, Smith, Ravin & Davis,
attorneys; Harriet F. Klein and Bruce D.
Greenberg, on the briefs).
Nancy Erika Smith argued the cause for
respondents (Smith Mullin, attorneys; Ms.
Smith, Christopher P. Lenzo, and Jon W.
Green, on the briefs).
Matthew R. Gabrielson, Deputy Attorney
General, argued the cause for amicus curiae,
Attorney General of New Jersey (Deborah T.
Poritz, Attorney General, attorney; Joseph L.
Yannotti, Assistant Attorney General, of
counsel).
The opinion of the Court was delivered by
STEIN, J.
Plaintiffs, Candy Rendine and Bernadette Lorestani, brought
this action pursuant to the Law Against Discrimination (LAD),
N.J.S.A. 10:5-1 to -42, seeking damages primarily on the basis
that their employment wrongfully was terminated because they had
become pregnant. Their claims were tried jointly. See R. 4:29-1. After a jury verdict, Rendine recovered a judgment of
$460,000, consisting of $225,000 in compensatory damages and
$250,000 in punitive damages; Lorestani's judgment of $475,000
consisted of $225,000 in compensatory damages and $250,000 in
punitive damages. Both plaintiffs also recovered prejudgment
interest, counsel fees, and costs. The Appellate Division
affirmed the judgment in all respects,
276 N.J. Super. 398
(1994), one member of the panel dissenting only from the court's
affirmance of the portion of the judgment reflecting the jury's
award of punitive damages. Defendant, Edward Pantzer, owner and
president of Pantzer Management Company, appeals as of right from
the judgment awarding punitive damages to plaintiffs. R. 2:2-1(a)(2). We granted Pantzer's Petition for Certification raising
issues concerning joinder, adequacy of jury instructions,
emotional-distress damages, and counsel fees.
138 N.J. 272
(1994).
We adopt and set forth the comprehensive summary of the trial testimony included in the Appellate Division opinion:
Plaintiff Rendine earned a degree in accounting in 1979 and then worked as an
auditor and financial analyst with a bank for
four years. In 1983 she accepted a position
with defendant as assistant controller.
Defendant Edward Pantzer was the president
and owner of the company and Michael Pantzer
(Michael), his brother, was the executive
vice-president. In 1985 they hired Steve
Weinerman as controller; he was Rendine's
immediate superior.
When defendant first interviewed
Rendine, he asked her if she had plans to
marry and have children "within five years of
being married." Rendine answered that she
"hoped to be married," but had no plans for
children. As assistant controller of
residential properties, Rendine supervised "a
staff of accountants for accounts receivable,
accounts payable, security refund ... [and]
payroll." There were about twenty employees
at the central office in Tenafly, plus others
who worked at the various properties.
Rendine was a member of the executive
committee, which met weekly and made "all the
major decisions of the company." The other
members of the committee were the defendant
Edward Pantzer, Michael Pantzer, Weinerman,
who was Michael's assistant, and Bill Bodger,
head of acquisitions.
When Rendine began work, her first
assignment was to revamp a six-month old
computer system, verifying information about
thousands of tenants at numerous properties.
She spent some three months visiting the
properties in New Jersey, Pennsylvania and
Delaware, collecting the information, and
then entering it into the computer. She
worked every evening until six or seven and
sometimes until nine. Rendine also prepared
a manual explaining the procedure for
entering information into the computer.
In 1984, after Rendine announced her
engagement to marry, she said that defendant
called her into his office and asked her to
polish some silver for him. "[H]e said that
since I was getting married and probably
going to have silver once I was married, that
it would be good practice for me to polish
his silver." Rendine politely declined.
Defendant denied that this occurred.
With her November annual performance
reviews, Rendine received a fourteen-percent
salary increase in 1984, fourteen percent in
1985, and eleven percent in 1986. She also
received Christmas bonuses for these years of
$2500, $1500, and $2500. In January 1986
Michael wrote Rendine a letter, thanking her
for doing a good job. Suzanne Rivera, one of
the employees whom Rendine supervised,
corroborated her competence and ability, and
her patience and fairness in dealing with
those who worked under her.
Lorestani was hired as a staff
accountant to assist Rendine in June 1984.
She had five years' experience in bookkeeping
or accounting and she earned an accounting
degree in 1985. In her job interview,
defendant asked her whether she was married,
and she said she was engaged. He also asked
if she planned to have children. She
answered that she "wasn't really thinking at
that point about children." Rivera, who was
hired in June 1987, was also asked in her job
interview about plans to have children.
Lorestani monitored the apartments
occupied by defendant's employees, met with
Michael each month to review them, and
assisted Rendine with the preparation of
financial reports. Rendine, who trained
Lorestani, thought she was "a very good
employee.... She executed all her functions
well." Rivera corroborated Lorestani's
competence and excellent job performance.
Weinerman was also very happy with
Lorestani's job performance. Five months
after she was hired, Lorestani, whose
starting salary was $19,000 a year, received
an eleven-percent increment. The following
year, 1986, she again received an eleven-percent increment, and in 1987 she received a
twelve-percent increment. She also received
Christmas bonuses in the amounts of $500 in
1984, and $1000 in 1985 and 1986.
Lorestani's responsibilities increased during the time she worked for defendant. She assumed responsibility for dealing with
the managers in the field and took over the
cash reconciliations and money-market account
activity on about twenty properties. She
worked long hours, arriving early in the
morning, frequently staying until 7 p.m., and
also working on weekends when needed.
Plaintiffs were "inundated" with work,
including new properties, and Rendine decided
that a bookkeeper should be hired. After
consultations with Weinerman and defendant,
the bookkeeper position was created. Pam
Gaetano was hired in 1987; she worked under
Lorestani, who trained her. Rendine
evaluated Gaetano, and found her to be "an
okay employee." With no math or accounting
background, Gaetano "continually had problems
understanding ... a bank reconciliation,
doing anything that really had to do with
math." Although both Rendine and Lorestani
"kept on trying to train her extensively,"
Rendine felt that Gaetano was unable "to take
on staff accountant responsibilities."
Another staff accountant, Dominic
Battista, was hired in 1985 or 1986 but he
left after about a year. When Lorestani
began working with defendant, she was assigned to clean the kitchen. However, when
Battista was hired, she "noticed that he did
not have kitchen duty. So, I talked to Mr.
Michael Pantzer and I asked why that was, and
he took me off of the kitchen duty instead of
putting Dominic on."
Before Battista was hired, Weinerman
told Rendine that "he wanted to hire a male
for that position, that they really would not
consider a female at that time." He told her
that:
[I]t would be in the best interests
of the company to look for a male
because Bernadette and I had
recently been married and we were
of child bearing age and our, what
do they call it, our biological
clock was ticking to have children,
our time was running out because we
were getting older.
The issue of the gender of the new
accountant was discussed at an executive
committee meeting, where everyone except
Rendine agreed with Weinerman's theory.
Weinerman denied making this comment.
Rendine was married in December 1984 and
purchased a home with a substantial mortgage
in October 1985. Her husband's salary was
about the same as hers. Both salaries were
needed to carry the home. Lorestani was
married in May 1985, and purchased a home,
with a mortgage, in November 1985. Both
Lorestani and her husband had substantial
student loans to repay and were supporting
her husband's younger sister. Lorestani and
her husband were both earning the same
salary; both incomes were needed for their
support.
In late December 1986 or early January
1987 Lorestani told Michael Pantzer that she
was pregnant. She told him that she planned
to return to work, and that her sister would
take care of her child. "He was very happy
for me. He congratulated me." When asked
when she would return, Lorestani answered in
four or five weeks with a regular delivery,
or six to eight weeks if she needed a
Caesarean. Lorestani discussed her maternity
leave many times with defendant, his brother,
Michael, and Weinerman. She repeatedly told
each that she planned to return to work when
she was physically able. They each assured
her that her job would be available on
return. Rendine also announced her pregnancy
in January 1987 and defendant, Michael and
Weinerman all "appeared to be happy for me."
She advised them from the outset that she
planned to take at least three months'
maternity leave, and then return to work. On
several occasions, she was assured that "your
job will be waiting for you." Rendine
testified about an executive committee
meeting while she was pregnant, at which her
colleagues said that she looked like a
"beached salmon." However, defendant and
Michael denied that they or anyone else made
any jokes or comments about pregnancy in
general or about Rendine in particular.
Defendant said that he would not tolerate any
such remarks, or discrimination in his
company.
Dean Delianites, a CPA as of 1985, with
four years' experience in public accounting,
was hired as commercial accounting manager in
November 1986. Rendine saw him leave work
early, at 4 p.m. every day, to attend law
school. Rivera corroborated that Delianites
left work early, adding that Delianites told
the staff that he would make up the time "by
working through his lunch hour," but Rivera
saw him studying law while eating at his
desk.
Rendine's duties were divided between
Delianites and Weinerman while she was on
maternity leave. She had attempted to train
Delianites but he was "too busy" and
uninterested. Rendine worked with
residential buildings, an area in which
Delianites had no experience or training.
Lorestani and Rendine trained Gaetano to take
over Lorestani's duties but Gaetano had
difficulty learning the work.
Lorestani started her maternity leave on
June 15, 1987, on the advice of her doctor.
This was two weeks earlier than planned
because she developed toxemia. On her last
day of work, she talked to defendant "and he
wished me luck, he said he hoped everything
worked out fine and he gave me a hug and he
told me my job would be waiting for me."
Lorestani delivered by Caesarean on July
13, 1987. Her husband called her office that
day, and she called a few days later.
Weinerman congratulated her and told her to
take as much time off as she needed and said
her job would be waiting. Michael also
congratulated her, told her that a return to
work in six to eight weeks would not be a
problem, and also said her job was waiting
for her.
Weinerman called her at home the day she
was discharged from the hospital, and asked
her for a date of return. She told him it
would be six to eight weeks, and "[h]e said
fine and when I was ready, my job was there
for me." Lorestani talked to someone in the
office at least once a week during her
maternity leave. Weinerman always asked her
when she would return, and she always told
him six to eight weeks.
In August, when eight weeks passed,
Lorestani arranged an appointment with
Weinerman to discuss her return. She had
made her child-care arrangements, was excited
about returning, and brought her baby with
her for the appointment with Weinerman.
Weinerman "told me that things were running
very smoothly and that there was no longer a
place for me and he was firing me."
Weinerman denied terminating Lorestani on
this particular day; rather, when she called
in early September to say she was ready to
return, he told her on the telephone that he
had no job for her. However, Rivera saw
Lorestani that day at the office, arriving
happy and showing off her new baby. When she
left Weinerman's office, she approached
Rivera; she was upset and crying, and "she
told me she had just been fired."
Meanwhile, Rendine's last day of work
was July 24, 1987, and she gave birth early,
on July 26. About a week later, Weinerman
called and told her that they were promoting
Gaetano from bookkeeper to staff accountant.
In August 1987 Rendine received a memo from
Michael, dated August 19, to all defendant's
personnel, advising that as of August 12
Delianites was promoted to the position of
assistant controller, and Gaetano was
promoted to the position of staff accountant.
The memo also announced that Rendine had
given birth to a baby girl, and Lorestani to
a baby boy. "As soon as their maternity
leaves are over, we enthusiastically welcome
the return of both Candy and Bernadette to
the accounting department."
Rendine was shocked. In her
conversation with Weinerman a week before, he
had not mentioned Delianites's promotion.
She felt that her position with the company
was endangered, since there was no need for
two assistant controllers. "I was being
replaced and I had only been out of work for
three weeks." She immediately called Weinerman, who "said that they felt the need to
promote these two people."
About a week later Rendine called the
office "just to see how everything was going,
if anybody needed me." She discovered that
"Dean had taken over my desk," including
"access to all my personal belongings." She
then called Michael, who was "very cold."
She was upset because she had always had a
fine relationship with Michael, who attended
her wedding with his wife.
In October 1987 Rendine met with Michael
and Weinerman to discuss her return; she was
given a memo entitled "Candy's
Responsibilities." She was told that she
would retain her title but would no longer
have the responsibilities and authority she
had before. Her new job was to work on
special projects. However, she had already
worked on the special projects listed, and
they required very little time. Rendine's
new job duties were "practically nothing"
compared to "the responsibilities I had
before I went on maternity leave" and would
have taken her about three days a month to
complete.
Rendine returned to work on November 11,
1987, after an absence of thirteen or
fourteen weeks. Her desk was "isolated from
the other employees." It was "right next to
the men's bathroom," noisy and filthy dirty.
She spent the first day cleaning it. There
were no office supplies and no access to the
computer. Her "personal belongings were
scattered all over the office." No work was
assigned to her the first day.
Defendant, who had expressed appreciation for her work just a month before she left, was now very cold toward her, "and I felt like a stranger." Michael, with whom
she had worked closely and had a "wonderful
working relationship," was also cold.
Weinerman, with whom she had had "a friendly,
amicable working relationship," was now "very
short," talking to her only when necessary.
The people in the office whom Rendine had
supervised, and whose questions she spent
most of her day answering, "wouldn't even
talk to me."
Rivera corroborated Rendine's account of
her return to work. According to Rivera,
Rendine had more knowledge about the
residential accounting functions, but
Weinerman and Delianites told the staff that
Delianites would be handling their questions.
Delianites admitted that in November 1987,
when Rendine returned from maternity leave,
he was still learning her job. Nevertheless,
Weinerman reprimanded Rivera and two others
for taking their questions to Rendine rather
than Delianites.
According to Weinerman, Delianites
complained about Rendine's socializing and
her job performance. Once, Rendine went onto
the computer without checking first, "and it
caused a minor problem." On another
occasion, when Delianites asked her to
correct some journal entries that she had
worked on, "she told him she was too busy."
Rendine explained that routine office
procedure, to return journal entries to the
person who wrote them, to review for
accuracy, had not been followed.
Early the following week, Weinerman called Rendine into his office. He told her that he had complaints about her, that she had a bad attitude, and that she had better change. He told her that "things ran smoothly when I wasn't there" and that "people were complaining that I was socializing." He talked for five minutes, refusing to listen to anything Rendine had to say. Rendine became angry, because "people had a bad attitude toward me." Weinerman "kept on yelling." Rendine said "I can't take this any more," and "this is not fair." She got up and walked out. Weinerman "told me that if I left, that would be it." When Rendine asked, "does this mean you're firing
me?" Weinerman answered "yes," and
discharged her.
Weinerman basically corroborated
Rendine's account of their verbal encounter,
and asserted that he terminated her because
she was insubordinate. Defendant, Michael
and Weinerman denied any prior discussion,
plans or intent to terminate Rendine.
Weinerman and Michael denied that their
attitude toward Rendine was cold when she
returned from her leave, and denied telling
staff not to speak with her.
Defendant, Michael and Weinerman all
considered Rendine a valuable employee.
However, they said she lacked supervisory
experience; her interpersonal skills were
mediocre; she had difficulty dealing with
people; she was unnecessarily "demanding and
short with her people," and had conflicts
with them.
According to Weinerman, when Delianites
took over Rendine's job, the situation in the
office improved. Delianites was capable of
handling Rendine's responsibilities and did
so effectively. "People started working more
closely together without problems.... [A]
very good working rapport developed in the
office. Everybody respected Dean"
Delianites.
However, on cross-examination Weinerman
admitted that in his last evaluation of
Rendine, in 1986, he rated her above average
in effectiveness in dealing with others, and
in all of the other specific review factors.
In contrast, Delianites was not rated any
higher than Rendine, and was rated lower than
her in leadership. Rivera, who worked under
Delianites for four months, thought that "he
did not have enough knowledge to run the
department well," and she "had to train him"
in her field, security deposit refunds.
Weinerman admitted that he agreed to
keep Rendine's job open for her, but never
"discussed a time frame," and never promised
her that her responsibilities would be the
same. According to Weinerman, Rendine told
him that she was having difficulty finding
child care.
Defendant and Michael Pantzer said that
the company had a maternity leave policy
providing twenty-eight days with pay. The
policy was "flexible enough" to allow for a
longer leave, but it would be without pay. A
maternity leave "would never be open-ended."
The employee must advise the company of the
date of her return. Defendant was "certain
that either Michael Pantzer and Steve
Weinerman and or myself made it clear to
Candy that she was going to get a paid four
weeks maternity leave and we expected her to
be back at the end of that." Rendine denied
that she was ever told about this policy.
According to Weinerman, if both Rendine
and Lorestani had returned to work within
thirty days, they would have been given their
prior jobs. However, Weinerman did not
intend to demote Delianites and Gaetano.
Weinerman explained that since defendant
acquired four commercial properties in 1987
and wanted "to bring all of our accounting
and management in-house," he determined to
create a second assistant controller
position, with one assistant responsible for
commercial and the other for residential.
Rendine and Delianites would be the two
assistants. However, Weinerman admitted that
he never told Rendine about this plan; he
only told her that she would be working on
"special projects." Weinerman originally
testified that his plan was never implemented
because Rendine was terminated. On cross-examination, he said that he abandoned this
plan before his meeting with her in October.
Weinerman admitted that he had
supervised Delianites elsewhere before coming
to work for defendant, that they had stayed
in touch, that he brought Delianites into the
company, and wanted a chance to promote him.
He also admitted that he kept Delianites's
promotion a secret from Rendine, that
Delianites and Gaetano were the only two
people who worked for defendant who were
promoted before their annual performance
reviews, and that Rendine's job functions
were so small when she returned from leave
that "it was not a hardship" for the company
to discharge her.
As to Lorestani, Weinerman admitted
promising her that her job would be kept open
but never mentioned any particular period of
time, and never promised that it would be
kept open indefinitely. Weinerman complained
that Lorestani would not give a definite date
for her return to work, since she was "still
working on" child care.
Weinerman explained that Gaetano was
doing both Lorestani's accounting job and her
own bookkeeping job, so that there was no
need for Lorestani to return. However, he
admitted that he hired a new bookkeeper, Lynn
Rochford, just days after he discharged
Lorestani. Weinerman rated Lorestani higher
than Gaetano in their performance reviews,
explaining that this was only because
Lorestani had more experience.
However, Rivera, who helped train
Gaetano, found that she had difficulty with
simple bookkeeping and accounting concepts.
Gaetano "constantly needed assistance ... to
do her job." Gaetano had difficulty dealing
with the property managers, and Rivera
frequently took their calls and corrected
Gaetano's mistakes. Rochford also criticized
Gaetano's job performance. Weinerman
nevertheless concluded that Gaetano "was as
good or better as the staff accountant" than
Lorestani.
Defendant claimed Rendine was an
insubordinate and unsuitable employee.
Defendant claimed that Lorestani was not
reinstated because her services were not
needed, failed to inform defendant of the
time of her planned return, delayed coming
back to work, and the operation ran more
smoothly without her because of "bad
relations with her coworkers."
The defense contended, through defendant Edward Pantzer and Weinerman, that its unwritten policy fixed the length of paid maternity leave at four weeks (plus sick and vacation days) but that it did not limit the allowable length of unpaid leave. In
contrast, defendant gave no paid leave for
disability beyond sick and vacation days.
Weinerman testified that exceptions for
unpaid maternity leave were "invariably
granted," if an employee provided defendant
with a return date and kept him advised of
developments.
Defendant produced as witnesses four of
his resident managers and three of his
leasing agents who took maternity leaves of
absence and successfully returned to their
positions with defendant. Although three
took their maternity leaves after defendant
was served with the summons and complaint in
July 1989, the other four took their leaves
earlier. All seven of these women took no
more than six weeks leave, consisting of
thirty days with pay plus accrued vacation or
personal leave, and all seven worked at the
sites of defendant's properties; none worked
in the central office. Jeanette Croce, an
assistant controller, who did not work in the
central office, was allowed to take a
maternity leave of eleven weeks in 1991,
which included five weeks of unpaid leave.
In contrast, plaintiffs' witness, Rivera,
took a five-month maternity leave in 1988.
Upon her return she found she had much less
responsibility than before, and she resigned
after two weeks.
Defendant also admitted that he
terminated his personal secretary, Kathy
Rega, in part because she was unable to work
after 5 p.m. Defendant explained that Rega
could not work later because she had a part-time job in the evenings. However, at a
prior deposition, defendant testified that
Rega was unable to work after 5 p.m. because
of her family obligations. Defendant's
current personal secretary, Mary Beth
Chvisuk, had one child when he hired her, and
discovered she was pregnant some sixty days
later. Nevertheless, he wanted her to return
to work after a maternity leave. On cross-examination, he admitted that this occurred
after he was served with the summons and
complaint in the present case.
The defendant company had four employees in the past few years who were injured or
ill; defendant held their jobs open for them,
one as long as six months, and did not
require them to specify their dates of
return. Michael admitted that the difference
between defendant's policies for maternity
leave and sick leave was that those out on
sick leave were not required to come back at
a specific time but those on maternity leave
were. Also, the employees who were allowed
extended sick leave were treated differently
from Rendine, in that they were allowed to
return to their same positions, with their
same responsibilities and authority.
Rendine applied for unemployment
compensation benefits. Defendant contested
her application. Unrepresented by counsel,
she attended a short hearing on her claim.
She did not raise her discrimination claim at
that hearing because "I didn't think that
that was the place to discuss it." The
hearing dealt only with her dispute with
Weinerman resulting in her termination. The
decision was adverse to Rendine, and she took
an administrative appeal but lost. She did
not appeal further because it would have cost
her more than the value of the six weeks of
benefits at stake.
Michael refused to give Rendine a reference because she was terminated. Nevertheless, she began looking for a new accounting position immediately after her discharge. She described an extensive job search, consisting of contacting employment agencies, sending out thirty resumes in 1987 and one hundred in 1988, making telephone calls, responding to want ads, and using personal contacts. She was looking for any reasonable salary, including one lower than her earnings from defendant. In 1988 she became pregnant again and stopped looking for work in October of that year. She resumed her job search in January 1989 sending out sixty or seventy resumes, contacting employment agencies, and reviewing want ads. She would have accepted around $25,000 per year, down from the $38,000 she had earned with defendant. Finally, in February 1991, she stopped looking for work, frustrated that she could not find anything. The employment agencies "said the economy was bad, there
weren't jobs." Rendine could not afford to
accept the minimum wage, because of her child
care and other expenses. She intended to
resume her job search when her children, ages
four-and-a-half and three at the time of
trial, went to school.
Rendine described the hardship of losing
fifty percent of her family's income. She
and her husband had to refinance their
mortgage with an adjustable rate. They could
no longer pay their bills. Their social
life, entertainment, vacations and clothing
purchases were adversely affected. They
depleted their savings, and borrowed money
from Rendine's parents. Rendine said that
she changed from "laid back" and "relaxed"
to "uptight." She was always worried about
paying bills. She and her husband constantly
had fights about money. She was sometimes
unable to sleep, and had nightmares about her
employment experience. She was frustrated,
angry and depressed. Rendine lost her self-confidence and self-esteem, and was unable to
face her friends. Even at the time of trial,
she was still "having a very difficult time
just coping with the situation."
Weinerman provided Lorestani with an
"okay" but not "great" letter of
recommendation and she immediately began
looking for work after her termination. She
registered with employment agencies, sent out
about twelve resumes each month, and looked
at the want ads every day. In 1987 she had
three or four interviews, but was not offered
any work. She became pregnant again in late
1987, but continued to look for work until
May 1988. She resumed her job search about
two months after her delivery; she again had
a Caesarean, and gave birth to twins. Later
in 1988 she was hospitalized and unable to
look for work. She did not claim lost
earnings in this case for her periods of disability.
In 1990 she turned down a job offer for $7 per hour. Later in 1990 she accepted a position as a part-time bookkeeper with a law firm, for $13,000 a year. However, she encountered difficulties there with a hostile co-worker and was forced to resign. In late
1991 Lorestani began working thirty hours per
week for $4.50 an hour, and continued at that
job through trial.
Lorestani's husband took a second job as
a waiter, Monday through Friday nights, and
Saturday and Sunday. He went directly from
his full-time job, as an engineer, to the
second job, arriving home after midnight.
Lorestani "felt like I was a single mother"
but "was very thankful that he was willing to
work that hard." Lorestani's family members
purchased clothes and shoes for the children.
She was embarrassed and humiliated, "but we
needed it." She gained a lot of weight and
lost her self-confidence. Before she lost
her job, she and her husband frequently
entertained in their home. She explained:
"After I was fired ... I was just very bitter
and very angry and I resented our friends.
They all worked and they had kids and they
weren't fired.... I became ... not a nice
person to be around...."
The jury obviously resolved the
conflicting evidence about whether
defendant's sick and maternity leave and
employment policy was discriminatorily
administered in plaintiffs' favor.
Both before trial, and in his motion for a new trial, defendant contended that prejudicial error had been committed because of the denial of his motion to sever the claims of the two plaintiffs. In denying defendant's new-trial motion, the trial court rejected the claim that the joint trial had prejudiced defendant, observing that except for two witnesses, all of the other witnesses' testimony had been relevant to the claims of both plaintiffs and, accordingly, the jury would have
heard their testimony whether the trials had been joint or
separate. The Appellate Division agreed with the trial court's
conclusion that defendant had not demonstrated that joinder of
the claims had resulted in undue prejudice, noting that the trial
court had carefully admonished the jury "that each plaintiff had
a separate complaint," which the jury must consider "on its own
merits." 276 N.J. Super. at 425. Before us, defendant
acknowledges that if the cases had been tried separately each
plaintiff would have attempted to offer evidence of the
circumstances surrounding the other plaintiff's termination,
although contending that such evidence would not necessarily have
been admissible. Essentially, defendant argues that irrespective
of the likelihood that separate trials would result in virtually
the same evidence being twice presented to two juries, the
prejudice that resulted from a joint trial of plaintiffs' claims
was irremediable, denying defendant a fair trial.
Rule 4:29-1(a), which authorizes joinder of claims asserted
by multiple parties, provides in part:
[A]ll persons may join in one action as
plaintiffs or be joined as defendants
jointly, severally, in the alternative, or
otherwise, if the right to relief asserted by
the plaintiffs or against the defendants
arises out of or in respect of the same
transaction, occurrence, or series of
transactions or occurrences and involves any
question of law or fact common to all of
them.
The Rule's objective has been described as intending
(1) to foster the virtually unrestricted joinder of persons interested in any capacity in the same claim, whether as plaintiffs or
defendants, and (2) to license the joinder of
multiple claims, by or against multiple
parties, where the claims have the requisite
common origin and the necessary common issue
of law or fact.
[Morris M. Schnitzer & Julius Wildstein, New
Jersey Rules Service 1954 to 1967 AIV-1037
(special reprint ed. 1982).]
Defendant does not appear to challenge the trial court's
conclusion that plaintiffs' claims satisfy the Rule's requirement
of a common origin, and the involvement of common issues of law
and fact. Both plaintiffs informed defendant's management that
they were pregnant at approximately the same time, Lorestani in
late December 1986 or early January 1987, and Rendine in January
1987. Their maternity leaves overlapped, Lorestani remaining at
home from June 15 to late August 1987, and Rendine's leave
extending from July 24 to November 11, 1987. Rendine was
terminated approximately one week after returning to work;
Lorestani was terminated in early September 1987, according to
her testimony on the day she visited the office to make
arrangements to return to work. Both plaintiffs alleged that
they had been terminated because defendant had discriminated
against female employees who became pregnant.
Defendant contends that the trial court should have granted
his motion to sever to avoid the risk of prejudice, relying on
Rule 4:29-2 and Rule 4:38-2(a). We do not underestimate the
concern that the joint trial of similar claims asserted by
several parties against the same defendant can present a risk
that the jury might use the evidence cumulatively, reaching
conclusions from the aggregate of the evidence that it might not
have reached in assessing the claims separately. We have noted
that potential for prejudice in considering the question of
severance in the context of criminal prosecutions involving
multiple offenses allegedly committed by one defendant. See
State v. Pitts,
116 N.J. 580, 600-03 (1989). As with civil
joinder, our resolution of severance issues in criminal trials is
informed by considering whether "assuming the charges were tried
separately, evidence of the offenses sought to be severed would
be admissible under [N.J.R.E. 404(b)] in the trial of the
remaining charges." Id. at 601-02.
Both the trial court and the Appellate Division addressed
the severance issue preliminarily by considering whether
severance would result in excluding evidence relating to the
severed claim, and both courts concluded that virtually the same
evidence would have been proffered whether the cases had been
tried separately or jointly. 276 N.J. Super. at 425, 428. As
noted by the Appellate Division, a number of federal courts have
ruled that testimony by employees about discriminatory actions by
the defendant-employer similar to those alleged by the plaintiff
is admissible to prove the employer's motive or intent to
discriminate. See Spulak v. K Mart Corp.,
894 F.2d 1150, 1156
(10th Cir. 1990); Estes v. Dick Smith Ford, Inc.,
856 F.2d 1097,
1102-05 (8th Cir. 1988); Conway v. Electro Switch Corp.,
825 F.2d 593, 597-98 (1st Cir. 1987); Hunter v. Allis-Chalmers Corp.,
797 F.2d 1417, 1423-24 (7th Cir. 1986); Stumph v. Thomas & Skinner,
Inc.,
770 F.2d 93, 97 (7th Cir. 1985); Phillips v. Smalley
Maintenance Servs., Inc.,
711 F.2d 1524, 1532 (11th Cir. 1983);
Morris v. Washington Metro. Area Transit Auth.,
702 F.2d 1037,
1045-46 (D.C. Cir. 1983).
Defendant relies on federal court decisions that have
excluded testimony of other employees claiming discriminatory
treatment analogous to that asserted by the plaintiff. Schrand
v. Federal Pac. Elec. Co.,
851 F.2d 152, 155-56 (6th Cir. 1988);
Haskell v. Kaman Corp.,
743 F.2d 113, 120-22 (2d Cir. 1984);
Moorhouse v. Boeing Co.,
501 F. Supp. 390, 393-94 (E.D. Pa.),
aff'd,
639 F.2d 774 (3d Cir. 1980). We are in accord with the
Appellate Division's observations that the testimony in Haskell
and Schrand was held inadmissible because it lacked relevance.
276 N.J. Super. at 427. In Haskell, testimony of former officers
of the defendant was offered to prove a pattern and practice of
age discrimination, but was held inadmissible because the
evidence was statistically insignificant. 743 F.
2d at 121. In
Schrand, testimony alleging age discrimination by two officers of
the defendant was held to be irrelevant because they had worked
in offices distant from the plaintiff and under different
managers. 851 F.
2d at 156. In Moorhouse, the trial court
exercised its discretion to exclude age-discrimination testimony
by five former employees of the defendant, who were plaintiffs in
separate actions, on the grounds of prejudice and possible
confusion, noting that had the cases been consolidated the trial
would have involved six plaintiffs and sixteen individual
defendants, as well as the corporate defendant. 501 F. Supp. at
392.
Prejudice to a defendant resulting from the joint trial of
claims by multiple plaintiffs cannot easily be quantified,
particularly if separate trials would not materially alter the
evidence offered to support and defeat the claims. Accordingly,
our Rules vest the determination whether or not to sever claims
to the sound exercise of a trial court's discretion. See R.
4:38-2(a). Other courts, confronted with the issue, have
determined that the advantages of a joint trial outweigh the risk
of undue prejudice. Duke v. Uniroyal Inc.,
928 F.2d 1413, 1420-21 (4th Cir.), cert. denied,
502 U.S. 963,
112 S. Ct. 429,
116 L. Ed.2d 449 (1991); Mosley v. General Motors Corp.,
497 F.2d 1330, 1334 (8th Cir. 1974); Blesedell v. Mobil Oil Co.,
708 F. Supp. 1408, 1422 (S.D.N.Y. 1989); cf. Hammons v. Adams,
786 F.2d 1253, 1253 (5th Cir. 1986) (finding no abuse of discretion
in serving claims of three plaintiffs involving different
incidents of discrimination as well as different pretexts for
discharge).
We are fully in accord with the Appellate Division's
conclusion that the trial court's determination to deny severance
was a reasonable exercise of that court's discretion. 276
N.J. Super. at 431.
Defendant contends that errors in the jury charge, although not objected to at trial, are sufficiently prejudicial as to constitute plain error, requiring reversal of the judgments. See R. 2:10-2. Specifically, defendant argues that the jury charge misstated the standard of illegality by which plaintiffs' claims were to be evaluated; that the trial court's instructions erroneously shifted the burden of proof of "pretext" from plaintiffs to defendant; and that the jury charge explaining the mixed motives defense was erroneous. We have carefully reviewed the trial court's instructions to the jury, and are persuaded by the Appellate Division's careful analysis that the jury charge considered as a whole constitutes a clear, understandable, and correct explanation of the applicable legal principles. 276 N.J. Super. at 431-38.
Defendant contends that the portion of the jury's compensatory-damage award that represents emotional-distress damages to plaintiffs is so lacking in evidential support as to be excessive as a matter of law. Defendant acknowledges that the jury's allocation of compensatory damages between economic loss and emotional-distress damages cannot be ascertained. Nevertheless, the Appellate Division opinion assumed that Rendine's award included approximately $105,000 in emotional
distress damages, and Lorestani's award approximately $125,000 in
such damages, based on the difference between the jury's total
compensatory damage awards and the claimed economic damages of
each plaintiff. 276 N.J. Super. at 439.
Defendant contends that the absence of expert testimony and
other independent evidence corroborating the claimed emotional
distress damages demonstrates the excessiveness of the jury
award. The Appellate Division specifically rejected the
contention that expert testimony or independent corroboration was
a prerequisite to a pain and suffering award in a discrimination
case, characterizing defendant's assertions as unsupported. 276
N.J. Super. at 442; see also Bolden v. Southeastern Pa. Transp.
Auth.,
21 F.3d 29, 34 (3d Cir. 1994) (agreeing "that the approach
taken by our sister circuits [that] have dispensed with a
requirement of expert testimony to corroborate a claim for
emotional distress is more consistent with the broad remunerative
purpose of the civil rights laws").
We also note that a 1990 amendment to the LAD, L. 1990, c.
12, § 51, specifically authorized recovery of emotional-distress
damages, and the accompanying Committee Statement noted that the
amendment emphasized that the LAD is to be liberally construed so
that all common-law remedies are available to persons protected
by the LAD. Assembly Judiciary, Law & Public Safety Committee,
Statement to Bills Nos. 2872, 2118 & 2228 (1990) (reprinted at
N.J.S.A. 10:5-3).
Essentially, defendant contends that the trial court's
failure to find the emotional-distress-damage award excessive was
an abuse of discretion. However, the general principle that
trial courts should not interfere with jury-damage awards unless
so disproportionate to the injury as to shock the conscience,
Baxter v. Fairmont Food Co.,
74 N.J. 588, 596-97 (1977), applies
with equal force to awards of emotional distress damages in LAD
cases. We find unassailable the Appellate Division's conclusion
that the trial court's evaluation of the compensatory damage
award should not be disturbed:
Although defendant's discriminatory
treatment did not cause plaintiffs to
relocate or suffer illness or homelessness,
both plaintiffs described in detail their
inconvenience and economic loss, physical and
emotional stress, anxiety in searching for
reemployment, uncertainty, career and family
disruption and other adjustment problems.
Plaintiffs' problems seem precisely the type
for which the Legislature intended
compensation.
. . . The trial judge here was not
shocked by compensatory awards; he did not
consider them excessive in view of the
evidence. His determination as well as that
of the jury, are entitled to considerable
appellate deference.
Defendant asserts that the trial court erred in submitting the issue of punitive damages to the jury, contending that to sustain an award of punitive damages on this record would be
tantamount to adopting a rule that punitive damages may be
awarded in every case in which a violation of the LAD has been
established. Defendant observes that "[t]he worst interpretation
that can be placed upon defendant's actions is that he desired to
avoid disruptions to his business caused by absences due to
pregnancy, particularly in positions that were critical to the
daily functioning of the company," arguing that such conduct does
not rise to the level of willfulness, malice, or reckless
disregard for consequences required to sustain an award of
punitive damages.
Our case law has established two distinct conditions that
must be met as prerequisites to the award of punitive damages in
a discrimination suit under the LAD. The first was recently set
forth in Lehmann v. Toys 'R' Us, Inc.,
132 N.J. 587 (1993), to
distinguish punitive damage awards from our holding that in the
context of a sexual harassment claim an employer will be liable
in compensatory damages for a supervisor's sexual harassment of
another employee if the employer "contributed to the harm through
its negligence, intent, or apparent authorization of the
harassing conduct . . . [or] if the employer negligently or
recklessly failed to have an explicit policy that bans sexual
harassment." Id. at 624. However, with respect to punitive
damage awards, we held that "a greater threshold than mere
negligence should be applied to measure employer liability.
Punitive damages are to be awarded 'when the wrongdoer's conduct
is especially egregious.' Hence, the employer should be liable
for punitive damages only in the event of actual participation by
upper management or willful indifference." Id. at 624-25
(citation omitted).
In addition to the requirement of actual participation in or
willful indifference to the wrongful conduct on the part of upper
management, we also impose a requirement of proof that the
offending conduct be "especially egregious." Leimgruber v.
Claridge Assocs.,
73 N.J. 450, 454 (1977). Our cases have
attempted to describe conduct that is sufficiently egregious to
warrant a punitive-damage award. In Nappe v. Anschelewitz, Barr,
Ansell & Bonello,
97 N.J. 37 (1984), we observed:
To warrant a punitive award, the defendant's conduct must have been wantonly reckless or malicious. There must be an intentional wrongdoing in the sense of an "evil-minded act" or an act accompanied by a wanton
and wilful disregard of the rights of
another. . . . The key to the right to
punitive damages is the wrongfulness of the
intentional act.
. . . Moreover, it is especially fitting
to allow punitive damages for actions such as
legal fraud, since intent rather than mere
negligence is the requisite state of mind.
Similarly, we noted in Berg v. Reaction Motors Division, 37 N.J. 396, 414 (1962): "Our cases indicate that the requirement [of willfulness or wantonness] may be satisfied upon a showing that there has been a deliberate act or omission with knowledge of a high degree of probability of harm and reckless indifference to consequences." In Herman v. Sunshine Chemical Specialties, Inc., 133 N.J. 329, 337 (1993), we stated that proof of actual malice
was "[a] condition precedent to a punitive-damages award." We
also note that the Third Circuit in reviewing our LAD and
punitive-damages decisions has expressed its certainty that this
Court "would in some cases find that employment discrimination
was wantonly reckless or malicious conduct reflecting intentional
wrongdoing in the sense of an evil-minded act or a disregard of
the rights of another, the type of conduct [that] it has held may
justify an award of punitive damages." Levinson v. Prentice-Hall, Inc.,
868 F.2d 558, 562 (1989); see also Weiss v. Parker
Hannifan Corp.,
747 F. Supp. 1118, 1135 (D.N.J. 1990) ("Under New
Jersey law, the exceptional nature of a given case and the wanton
or malicious nature of the defendant's conduct are questions for
the finder of fact.").
As the Appellate Division noted, the trial court's
instruction to the jury, consistent with our decisions, used the
terms "actual malice . . . intentional wrongdoing, and evil
minded act . . . wanton and willful disregard of the rights of
others" in characterizing the findings required of the jury as a
condition to imposing a punitive damage award. 276 N.J. Super.
at 444. In addition, the trial court "carefully