On appeal from the Superior Court of New Jersey, Law Division, Hudson County.
J. H. Coleman, Havey and Stern. The opinion of the court was delivered by Stern, J.A.D.
[223 NJSuper Page 469] We granted plaintiff leave to appeal from the trial court's order granting a new trial on compensatory damages and denying entry of a judgment for punitive damages. We now hold that the proofs did not warrant the verdict on compensatory damages and affirm the order for new trial. We also conclude that the evidence warranted consideration by the jury
of the punitive damage claim. We accordingly remand for a new trial on compensatory damages and for any appropriate post verdict proceedings with respect to the punitive damage verdict.
The complaint alleged that plaintiff, a black, 19-year employee of the defendant and its predecessor, had been discriminated against on the basis of "race and national origin in violation of both state and federal constitutional[,] statutory [and] common law." This discrimination was alleged to have resulted ultimately in plaintiff's discharge from the company. According to the complaint, plaintiff "was caused to suffer severe economic injury and hardship, severe emotional distress, both temporary and permanent in nature and was caused to suffer extreme anguish, embarrassment, shame and humiliation." The complaint sought compensatory damages, punitive damages, attorneys' fees, costs of suit and "[w]hatever conditional relief the court deem[ed] equitable and just." The proofs at trial, to be detailed in Point II infra, substantiated plaintiff's claims. At the conclusion of the plaintiff's case, defendant's motion for directed verdict was denied, and plaintiff moved to introduce into evidence defendant's recent financial records in support of his claim for punitive damages. The judge initially ruled that the financial records were not admissible. He concluded that while punitive damages could be recovered in an appropriate case, as a matter of law they were not available to this plaintiff because plaintiff admitted violation of defendant's work rules. The judge stated:
In the circumstances of this case, we have a situation where the defendant was dismissed, but he admitted that he violated the work rules. He admitted that he lied to the employer regarding the violations during his hearing.
I don't believe that the circumstances of this case show the aggravated malice which would warrant the imposition of punitive damages.
Thereafter, plaintiff suggested that the issue of punitive damages should nevertheless be presented to the jury and a
verdict secured to avoid the time and expense of a new trial in the event the court erred in its ruling. After reserving decision while the parties developed their arguments and after two witnesses testified for the defense, the court acquiesced in the suggestion. The judge concluded:
There will be . . . no punitive damages even after the jury goes out and makes the determination.
They will not be awarded in the judgment.
But, if on appeal, the Appellate Division finds that punitive damages were appropriate in this case as a matter of law, they find that, then it would not possibly be necessary to have to retry the whole matter again.
They can accept this jury's finding with respect to punitive damages.
I believe that was the whole gist of the discussion, the practical way of handling it to obviate the need for a new trial without prejudicing anybody's rights.
Even if this jury comes back with punitive damages, if we do it that way, they will not be awarded in a verdict, absent a determination that as a matter of law, punitive damages are appropriate.
The defendant perceived the following prejudice:
Because the problem we see is that we don't think punitive damages are something that should be awarded in this case.
That is the reason why we don't think punitive damages should be awarded or the jury should award it respectively.
That is the prejudice under any circumstances.
Thereafter, the following colloquy occurred between the court and defense counsel:
[THE COURT:] They will not be awarded by this Court in this case.
The only reason for following that procedure would be in the event, as a matter of law, the higher Court, the Appellate Division or the Supreme Court, finds that as a matter of law, they should have been considered in this case.
Then, if they find that, they would, at least, have the option of adopting the finding of this jury as to the amount of punitive damages.
Rather than having it sent back and have the whole case decided again solely on the issue of punitive damages, you have to go through this whole thing again.
I'm sure Mr. Bernstein understands what the law is.
If you want some time to think about it, think about it.
If you think there's some prejudice to the defendant in proceeding that way, then let me know what it is.
MR. BERNSTEIN: Very good, your Honor.
Although defendant objected to any consideration of punitive damages, the court and counsel subsequently agreed that the case would be presented to the jury on compensatory damages, after which evidence would be presented on punitive damages and the jury would be charged on that subject. Defendant, over objection to consideration of the issue at all, agreed to the procedure to be utilized to preserve the record without entering judgment. The procedure was outlined as follows:
MR. BERNSTEIN [DEFENSE COUNSEL]: . . . I think, just to make sure we're clear on the matter, which we had a discussion about the punitive damages question, maybe you said it, and I didn't catch it; but assuming that the jury were to come back with some award, as I understand what Mr. Van Dorn envisions and as we discussed, I think the thought would be:
There would be a separate charge respecting punitive damages.
Now, the jury could come back with a jury award with respect to punitive damages, assuming we agree on what evidence would even be introduced in that regard, or it comes back with some amount.
That would be struck by you from the record, and then the plaintiff's attorneys, Mr. Van Dorn and Mr. van Schaick, would have the then option of deciding whether they wish to take it upon themselves to appeal that ruling by you, striking from the record punitive damages.
THE COURT: I've already ruled that under the circumstances of this case, I do not believe that punitive damages are appropriate and should be submitted to the jury.
The only reason for this procedure, and I think it's a wise procedure in the interest of both parties and in the interest of conserving time, would be in the event that the Appellate Division or the Supreme Court found that, as a matter of law, the jury should [consider] punitive damages, it would obviate the need for another complete trial if they found that this procedure was proper.
And there was nothing wrong with the verdict returned by the jury, or they would have the option to say this procedure is not proper, and order a new trial anyway.
However, that option would be there.
Judgment would be entered based upon the first verdict returned by the jury.
Punitive damages would not be a part of the final judgment; and that would be ...