Terrell v. OTS, Inc. et al
Filing
171
ORDER denying 149 Defendant's Motion for Renewed Judgment as a Matter of Law or alternatively, New Trial. GRANTS 170 Defendants' Motion to allow the withdrawal of Attorneys, Louis R. Cohan and Matthew Robert Rosenkoff. Signed by Judge Richard W. Story on 7/1/11. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CANDACE TERRELL,
Plaintiff,
v.
OTS INC., D/B/A ,OMNITECH
SOLUTIONS AND OMNITECH
INSTITUTE, et al.,
Defendants.
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CIVIL ACTION NO.
1:09-CV-626-RWS
ORDER
This case comes before the Court on Defendants Charles Lester
(“Lester”) and OTS, Inc.’s (“OTS”) (collectively, “Defendants”) Motion for
Renewed Judgment as a Matter of Law, or in the Alternative, a New Trial [149]
and the Defendants’ Consent Motion to Allow Withdrawal of Counsel [170].
After a review of the record, the Court enters the following Order.
I. Background
This case was tried March 28-April 1, 2011. At the time the trial began,
Plaintiff pursued Title VII, battery, and negligent retention claims. However, at
the close of the Plaintiff’s case, Defendants moved for and were granted
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judgment as a matter of law on Plaintiff’s Title VII claims. Following the close
of the evidence, the jury found Lester liable for battery in the amount of
$100,000 and OTS liable for negligent retention in the amount of $200,000.
Defendant now moves to set aside this verdict.
II. Preliminary Matters
This Court GRANTS Defendants’ Motion to Allow the Withdrawal of
Attorneys Cohen and Rosenkoff of the firm Weinstock & Scavo, P.C. [170].
III. Discussion
Defendants make a renewed motion for judgment as a matter of law or,
alternatively, for a new trial on all of Plaintiff’s tried claims. Namely,
Defendants argue that: (1) to allow Plaintiff to recover individually against
Lester for battery and separately against OTS for negligent retention is an
improper double recovery; (2) neither the battery nor negligent retention claims
were supported by sufficient evidence; and (3) alternatively, Defendants should
be granted a new trial on any and all remaining claims due to the prejudicial
“me too” evidence at trial which did not involve a touching component. Def.
Mot., Dkt. No. [149-1] at 1-2.
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A. Renewed Judgment as a Matter of Law
Federal Rule of Civil Procedure 50 permits a district court to grant
judgment as a matter of law when, after a party has been fully heard on an issue
during a jury trial, “the court finds that a reasonable jury would not have a
legally sufficient basis to find for the party on that issue.” FED. R. CIV. P.
50(a)(1). Following trial, the non-prevailing party may renew its motion under
Rule 50(b). FED. R. CIV. P. 50(b). Under both of these motions–whether
judgment as a matter of law or its renewed variety–the district “court must
evaluate all the evidence, together with any logical inferences, in the light most
favorable to the non-moving party.” Beckwith v. City of Daytona Beach Shores,
Fla., 58 F.3d 1554, 1560 (11th Cir. 1995) (citing Walker v. NationsBank of Fla.
N.A., 53 F.3d 1548, 1555 (11th Cir. 1995)).
1. Double Recovery
Defendants first argue that to allow Plaintiff to recover against Lester
individually for battery and against his alter ego corporation–OTS–for a
derivative negligence claim is an impermissible double recovery. Defendants
maintain that holding Lester liable for not firing or appropriately supervising
himself is nonsensical. However, first, Lester was not held liable for failing to
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fire himself–OTS was found liable for that failure. See Jones v. Major, 55
S.E.2d 846, 848 (Ga. Ct. App. 1949) (“Though one person owns the entire stock
of a corporation, still, in law, the corporation and the individual are separate
entities.”). Second, this is not a case where OTS and Lester are the same
entity–this not a sole proprietorship. Rather, Lester has chosen to shield his
personal assets from the corporation and the corporation’s assets from himself
by incorporating OTS, creating two distinct legal entities. To not allow this
type of recovery would effectively shield a corporation from a state-law claim
when the tort-causing owner/employee refuses to control his or her own
conduct and hire an outside manager.
This Court does not find that a solely-owned corporation is exempt from
a state-law negligent retention claim because it is owned by the tortfeasor.
Georgia law puts an affirmative duty on employers to avoid the negligent
retention of known tortfeasors. O.C.G.A. § 34-7-20 (“The employer is bound to
exercise ordinary care in the selection of employees and not to retain them after
knowledge of incompetency”). Defendants have not pointed this Court to any
decision in which a court applying Georgia law has held that while the language
of the statute covers all employers, an exception exists when a derivative tort
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claim is sustained against a corporation which is solely owned by the offending
tortfeasor.1 Lester chose to enjoy the separate corporate form when he
incorporated OTS and should not be allowed to receive all the benefits of that
arrangement without the corresponding legal consequences. To allow anything
else would skirt Georgia’s policy in allowing civil recovery for such injuries.
2. Negligent Retention
Defendants also argue that Plaintiff’s negligent retention claim was not
supported by a legally sufficient basis. Namely, Defendants assert that OTS
was not on notice of Lester’s tendency to batter his employees as OTS’
1
Defendants make much of Forsberg v. Pefanis, 2009 U.S. Dist. LEXIS 114144,
*46 (N.D. Ga. Dec. 8, 2009). There, defendants argued that an “award against both the
[employer] corporations for negligent retention of the [alter ego employee] cannot be
supported if judgment is also entered against the [employee] personally for the underlying
conduct. In short, [the employee as an alter ego] may not be held liable for failing to fire
himself.” Id. Judge Forrester rejected that argument, finding that there was not a double
recovery because only the corporations were held liable for negligent retention–not the
individual employee. Following that determination, Judge Forrester then stated: the
employee “is not the sole owner of [the defendant corporations].” Id. From this
statement, Defendants read that when the employee is the sole owner, the employer
corporation cannot be liable.
First, the Court notes that this statement is only dicta. Moreover, Judge Forrester
grounded his decision on the fact that the defendant corporations were held liable for the
negligent retention–not the employee. And, the better rationale for that statement is to
show that the defendants’ arguments were particularly baseless when all agreed the
employee was not the sole owner–meaning that their own argument could not apply to
their situation as there were others available to fire that employee. The Court does not
read Judge Forrester’s opinion to declare that when a situation like this one occurs a
corporation will not be held liable for the acts of its owner employee.
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attorney–Cohen–completed investigations as to each complaint and determined
that Lester’s conduct was appropriate. Defendants argue that they should be
able to rely on Cohen’s determinations.
In support of their argument, Defendants point to Equal Employment
Opportunity Commission v. Total System Services, Inc., 221 F.3d 1171, 1176
(11th Cir. 2000) for the proposition that internal investigations are business
decisions which the courts should not “second-guess as a kind of super
personnel department.” However, the Eleventh Circuit goes on to state while
the employer can accept one employee’s version of facts over another’s, that
choice must be an honest one. Id.
Here, the jury had sufficient evidence from which to conclude that
Cohen’s investigation did not deserve any credence. First, the jury heard
testimony from Lester himself that he denied all of the battery-based
allegations. And, since Lester was the alter ego of the corporation, the jury was
permitted to find that OTS would not have made an honest choice in failing to
believe the prior complainants over Lester when Lester–as the alter ego of the
corporation and the batterer–knew what events actually occurred.
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Since Lester did not admit to pressing his genitals up against any
woman’s buttocks or any other battering conduct, the jury could find from the
evidence presented that Lester lied, and that Cohen’s investigation was not
based upon the truth. Consequently, the investigation was tainted.2 And,
Lester–in his role as CEO of OTS–could then not have made the honest choice
when he accepted his own false version of the facts over the facts of the
complainants. Clearly, a knowing falsity is not protected simply because it is
told to an investigator. Therefore, evaluating all inferences in the light of the
Plaintiff, Defendant OTS had sufficient notice to predicate a negligent retention
claim.
2
As well, the Court does not find merit in Defendants’ Reply Brief footnote 9.
Defendants there allege that because the Plaintiff moved to suppress the audiotapes of the
investigations, Plaintiff should be estopped from asserting the investigations were flawed.
However, the reason that the Court granted Plaintiff’s motion was because the Defendants
did not even make reference to the fact that such tapes existed until the Pre-Trial
Conference–well after discovery had closed. This was also after the Plaintiff clearly
requested such media, and the Defendants produced a privilege log that did not make
reference to any tapes. The Court does not take such “litigation by surprise” lightly and
finds it disingenuous that Defendants would argue their own discovery abuses should be
used against the Plaintiff–even if those abuses occurred before present Defense Counsel
took over representation.
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3. Battery
Defendants also assert that the jury was not presented with sufficient
evidence to support the battery claim because Lester obtained permission to hug
Terrell and Terrell did not complain. However, taking all inferences in the
Plaintiff’s favor, the jury was presented with evidence that while Plaintiff
consented to a friendly hug, she did not consent to the type of full-body caress
that she received. As well, the Plaintiff stated that she received a massage in
which no permission was sought or given. Further, Terrell testified that she was
scared to report the battery as she was afraid she would lose her job. And, the
Plaintiff presented evidence that the Defendants’ reporting scheme was flawed.
All of these facts support a reasonable finding that the Plaintiff was battered.
As well, Defendants also argue that judgment as a matter of law is
warranted because Terrell perjured herself. They argue that: (1) Plaintiff did
not include OTS on her application to her current job; (2) Plaintiff omitted
collection lawsuits in her interrogatories; (3) Plaintiff stated in her EEOC
charge that Lester had asked her for oral sex when he did not; (4) Plaintiff
stated in her EEOC charge that her pay was reduced after refusing Lester’s
sexual advances when it was not; (5) Plaintiff lied about the timing of when she
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questioned Edwards about Lester’s actions; and, (6) what the Court reads as an
allegation that her claims were fabricated after talking to an attorney and
learning about a prior employee’s harassment suit.
However, the Defendants confirm that they cross-examined Terrell about
these inconsistencies at trial. The jury heard this impeachment testimony–as
well as the inconsistencies of any other witness–and chose to believe Terrell’s
version of the facts. As “[t]he credibility of a witness is in the province of the
factfinder,” this Court will not overturn the jury’s verdict when such
inconsistences were aired in open court. Crystal Entm’t & Filmworks, Inc. v.
Jurado, __ F.3d ___, 2011 WL 2449016, * 5 (11th Cir. 2011). Therefore,
Defendant’s Motion for Renewed Judgment as a Matter of Law is DENIED.
B. New Trial
A litigant renewing a motion for judgment as a matter of law may also
request a motion for a new trial under Federal Rule of Civil Procedure 59. FED.
R. CIV. P. 50(b). While the considerations governing the resolution of such a
motion are analogous to those that dictate the disposition of a motion for
judgment as a matter of law, the showing a moving party must make to obtain a
new trial is less arduous than that required in the context of Rule 50:
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specifically, unlike a motion for judgment as a matter of law, the trial judge is
free to independently weigh the evidence when deciding a motion for new trial.
Williams v. City of Valdosta , 689 F.2d 964, 973 (11th Cir. 1982). In doing so,
the trial court is to view not only that evidence favoring the jury verdict but also
the evidence in favor of the party seeking a new trial. Id. Indeed, a trial judge
may grant a new trial for reasons which would not support judgment as a matter
of law. O'Neil v. W.R. Grace and Co. , 410 F.2d 908, 913 (5th Cir. 1969).
A judge should grant a motion for a new trial when "the verdict is against
the clear weight of the evidence or will result in a miscarriage of justice, even
though there may be substantial evidence which would prevent the direction of
a verdict." Lipphardt v. Durango Steakhouse of Brandon, Inc., 267 F.3d 1183,
1186 (11th Cir. 2001). Rule 59(a) allows for a new trial "on all or part of the
issues." FED. R. CIV. P. 59 (a). However, a motion brought pursuant to Rule 59
may not "relitigate old matters, raise arguments or present evidence that could
have been raised prior to the entry of judgment." Linet, Inc. v. Village of
Wellington, 408 F.3d 757, 763 (11th Cir. 2005) (stating that motion to amend
or alter judgment was essentially a motion to reconsider the district court's prior
summary judgment order and should be examined under similar standard).
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Here, Defendants allege that a new trial is warranted to remedy the
allegedly irrelevant and prejudicial “me too” evidence which related solely to
the sexual harassment claim and did not have a touching component to
predicate a battery. However, at the time this evidence was presented,
Plaintiff’s Title VII claims and related negligent retention claim based upon her
federal claims were still viable. It was only after this evidence was presented
that Defendants moved for directed verdict and the claims were dismissed.3 As
the “me too” evidence was appropriately admissible at the time the evidence
was given, the Court does finds that there was no miscarriage of justice. See
Goldsmith v. Bagby Elevator Co., Inc., 513 F.3d 1261, 1286 (11th Cir. 2008)
(holding that “me too” witnesses who offered evidence of discrimination by the
same supervisor were admissible under Federal Rule of Evidence 404(b) to
show evidence of motive, intent, or plan). This is especially true when the
Plaintiff had to prove that OTS knew Lester had harassed and battered before to
substantiate its negligent retention claim. See Fed. R. Evid. 404(b) (stating that
character evidence is admissible to prove “knowledge”).
3
While they raised other grounds, the Court also notes that Defendants did not
raise the 15 employee ground at the summary judgment stage.
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As well, the Court notes that essentially Defendants have repackaged
their motion in limine to exclude the “me too” witnesses, which is not
appropriate under Rule 59. Therefore, Defendants’ Motion for New Trial is
DENIED.
III. Conclusion
Defendant’s Motion for Renewed Judgment as a Matter of Law or,
alternatively, New Trial [149] is DENIED. However, this Court GRANTS
Defendants’ Motion to Allow the Withdrawal of Attorneys [170].
SO ORDERED this 1st day of July, 2011.
_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
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