Before Judges Newman and Collester.
The opinion of the court was delivered by: Newman, J.A.D.
 Argued: April 27, l998
On appeal from Superior Court of New Jersey, Law Division, Middlesex County.
Plaintiffs Ann Baker and Barbara Hausleiter, branch managers with defendant, The National State Bank (the Bank), were terminated in a reduction in force in 1991. Defendants Leo Ahern, the Bank's regional manager, and Arthur Campbell, its vice president in charge of branch operations and community banking, were responsible for choosing plaintiffs for dismissal. Defendant New Jersey National Bank, a/k/a Corestates New Jersey National Bank, is the Bank's successor in interest.
Plaintiffs proved during trial that their dismissals were the result of age discrimination (Baker was fifty-four and Hausleiter was forty-nine), and for Baker, also gender discrimination. A jury awarded Baker and Hausleiter compensatory damages which, with interest, totaled $l55,l33.00 and $l28,235.00, respectively, and punitive damages of $4,000,000.00 which plaintiffs agreed to share evenly. Plaintiffs were awarded attorneys' fees and costs which totaled $338,227.45.
Defendants object to various sections of the jury charge, primarily arguing error in the explanation of preponderance of the evidence, and in failing to charge that plaintiffs were required to prove a prima facie case. Defendants further contend that the award of punitive damages was improper, because (1) there was no malicious or willful conduct; (2) the award was inconsistent because it was against the Bank only, and not the individuals; (3) the successor bank should not be liable for punitive damages; and (4) plaintiffs failed to prove the financial condition of the Bank at the time of the wrongdoing. Finally, defendants argue that evidence of the performance of the employees who replaced plaintiffs should not have been admitted, the verdict was against the weight of the evidence, and the award of counsel fees was excessive.
Plaintiffs cross appeal, contending that the hourly rate used for the counsel fee award should have been the current rate, rather than the rate at the time the services were performed. We are satisfied that the issues raised on the appeal and cross-appeal should be rejected and, therefore, affirm.
These are the relevant facts. Ann Baker began working for the Bank in 1973 as a part-time teller. In 1978, Baker became a full-time teller and was promoted to head teller within a year. By l98l, Baker was an assistant branch manager. After completing a management training program, Baker successfully assisted with a difficult merger.
Baker next served as branch manager at Kenilworth for a few months and in August 1985 was transferred to Rahway, which was experiencing serious difficulties in personnel and audits. An audit in November 1985 showed substantial improvement.
Arthur Campbell, regional administrator at that time, occasionally visited Baker's branch and commented that things were going well. He also sent her several memoranda thanking her for her exceptional work.
Terry Busichio became Baker's regional manager while Baker was in Rahway. In June 1988, Busichio wrote to Campbell recommending Baker for a promotion and a raise because her lending authority had increased and she was successfully managing a portfolio of $3.7 million. In March 1989, Busichio evaluated Baker's overall performance as consistently exceeding expectations, noting her branch's success in deposit growth, loan growth, control of expenses, and outstanding audit rating which was the highest possible. Busichio recommended Baker as "capable of taking on more complex assignments."
In early 1989, Busichio transferred Baker to Perth Amboy, a larger branch than Rahway, which had been experiencing many problems. Indeed, management "had lost control of the branch." Baker was upset, because, after working hard to "turn [Rahway] around," she was finally beginning to enjoy it, and could spend time with customers instead of constantly "putting out fires." In addition, Baker was not looking forward to the overtime required for a problem branch. When Baker protested, however, Busichio insisted that only Baker "could handle the responsibility." On Busichio's recommendation to Campbell, Baker was promoted to assistant vice president when she was transferred to Perth Amboy.
Perth Amboy was Baker's "worst nightmare come true." Every area of the bank was a problem. Morale was low, staff members did not get along, loans were unproductive and not properly documented, and policies and procedures were not followed. Baker worked late many nights, sometimes until 10:00 p.m.
Michael Couch, who supervised branch managers' loans, worked out of the Perth Amboy office and was familiar with its problems. Couch "felt for" Baker when she became manager there because she was "walking into a hornet's nest." Baker's regional manager in Perth Amboy was Joseph Gervasio, who constantly complimented Baker on her efforts to turn the branch around. Gervasio reported to Campbell, who was aware of Baker's success.
Meanwhile, Bill McDowell, a young man in his late twenties or early thirties who managed the Perth Amboy branch before Baker, was assigned to the Pennington branch, which was new, in a nice location, and easier to manage. Baker noted that the Bank had terminated managers for problems less serious than the ones McDowell had created at Perth Amboy. She felt it unfair that she had to "clean up his mess," while he was not held accountable. According to Campbell, however, the Bank terminated the regional manager who was responsible for Perth Amboy's "fairly considerable loan problems," and McDowell's lending authority was suspended.
When Baker began at Perth Amboy on March 28, 1989, she requested an audit to ascertain exactly what needed to be done. The audit, completed on May 5, 1989, rated Perth Amboy as unsatisfactory, which was not surprising. On November 14, 1989, another audit rated Perth Amboy as below average, an improvement over the first audit.
In February 1990, Gervasio recommended and Campbell approved a promotion and raise for Baker because of her successful performance. In Baker's performance appraisal of March 1990, Gervasio rated her overall performance as meeting all expectations. He commented that "a less qualified person could not have survived the operational and human resource issues that confronted Perth Amboy," praised Baker's leadership, and expressed confidence in her "ability to put Perth Amboy back in its rightful place."
An audit of August 7, 1990 again rated the Perth Amboy branch as below average. Baker felt that this was fair, as there were still many things that needed to be done. Nancy Lystash, an audit examiner with the Bank, recalled that when Baker was at Rahway, the audits there were favorable and "very smooth." She explained that even before Baker came to Perth Amboy, there were serious violations of operating procedures, including a lack of separation of duties, unsecured bearer instruments, and excessive teller differences. "[S]erious financial loss to the bank" was a concern because "the controls [were] breaking down."
Prior to Baker's arrival, the Perth Amboy branch was last audited in l988 and was considered "satisfactory." Lystash explained, however, that this audit did not reflect the subsequent problems with teller differences prior to Baker's arrival, which required unofficial audits without ratings. According to Lystash, the unsatisfactory audit of May 3, 1989, was not attributable to Baker because Baker had not been at Perth Amboy for very long. Lystash noted improvement in Perth Amboy between the November 1989 and August 1990 audits performed while Baker was branch manager.
Gervasio again assessed Baker's performance in March 1991, and rated her overall performance as meeting most expectations. He commented:
Perth Amboy is finally turning the corner toward a deposit growth and overall profitability. This in large part is due to Ann's ability to manage both the financial and human resource issues to accomplish the [branch's] expectation. Ann's management expertise are [sic] a good match for what is needed in Perth Amboy. ... [I]n the areas [in which] the branch needs improvement, I am confident Ann has built the foundation to succeed in 1991.
There were two areas in which Baker did not meet expectations:
increasing ATM use and the number of deposits. Baker explained that the ATM was in a remote location where vagrants would congregate, leave beer bottles, and urinate on the machine. Additionally, rather than increasing deposits, customers were closing their accounts because of concern about the Bank's financial condition. Gervasio acknowledged that a branch manager who needed to attend to numerous operational problems would not be able to spend as much time on increasing deposits and obtaining new business.
According to Baker, Gervasio understood these problems and assured her that "meets most is not a bad review." At managers' meetings, Campbell repeatedly explained that an evaluation of "meets most" was not a bad review and should not be a cause for concern. Gervasio corroborated that "meets most" was acceptable, and, generally, a raise accompanied it. He was satisfied with Baker's performance, and could not recall that a branch manager was ever terminated for having a performance review of "meets most." In fact, in July l99l, Campbell visited the Perth Amboy branch and told Baker that he was pleased with the job that she was doing. Barbara Timoni, an assistant vice president of the Bank in human resources, admitted that "meets most" was "not necessarily a poor rating."
In August 1991, Leo Ahern replaced Gervasio as Baker's regional supervisor. At a meeting with the regional managers, Ahern introduced himself and said, "I see I have seasoned mature managers in this region." According to Baker, Ahern continued with a smirk, "I didn't have that privilege in my last region, but of course that's because I terminated them all." Ahern denied making these statements.
On October 29, 1991, Baker was abruptly removed from a meeting and ordered to report to the Bank's headquarters in Linden, where Busichio advised her and several others that, because the Bank had been having problems, it had been ordered to cut its costs and downsize, and their positions had been eliminated. Busichio stressed that the terminations had "nothing to do with job performance." A form letter dated October 29, 1991 from the Bank's senior vice president confirmed that Baker's "position has been eliminated."
Jay Castillo, a younger man who had been employed by the Bank for only two months, replaced Baker in Perth Amboy. Castillo had been manager of the Hillside branch, which was closing. Baker also learned that McDowell, Perth Amboy's previous manager, was still working at Pennington.
Baker filed a complaint in the Division on Civil Rights, and in July 1992, at a fact-finding conference, Busichio asserted that Baker was selected for termination because of her "meets most" performance review in March l99l. Busichio explained that she and Ahern had decided that Castillo would be one of their "go forward players" in Perth Amboy because he spoke Spanish.
Baker insisted that she had been consistently told that "meets most" was not a bad review, and, had she any reason to believe otherwise, she would have objected and asked that it be changed. Moreover, Baker was never told that an ability to speak Spanish was necessary for the position. During trial, Gervasio corroborated that the Perth Amboy branch manager did not need to speak Spanish.
Later, after Baker withdrew her complaint in the Division on Civil Rights and filed her current complaint, defendants, in answers to interrogatories, accused her of having bad loans, audits and overdrafts. According to Baker, none of this was true. Baker noted that Gervasio had commended her for keeping her overdrafts minimal and following up on them. Gervasio corroborated that Baker did not have a problem with unsatisfactory audits or overdrafts. Couch agreed that the portfolio of loans that Baker had made herself was above average, and that she had inherited many delinquent loans at Perth Amboy.
Baker began searching for a new job immediately but was not successful; her family was forced to borrow funds to maintain their household. Baker became depressed and had difficulty sleeping. She had an especially difficult time telling her ninety-year-old father that she had lost her job.
Finally, in March 1993, Baker was able to obtain a position as a manager at Midlantic Bank (Midlantic). She had a difficult time learning new procedures and policies and felt inadequate and frustrated. At the time of trial, Baker was still employed at Midlantic but was earning less than when she worked at the Bank. Assuming a 5% annual increase if she had remained at the Bank, which was below her 8.8% average annual increment, and deducting her unemployment compensation, Baker calculated that her lost earnings totaled $63,704 through June 30, 1996.
Hausleiter began working at the Bank in 1970. After six years as a teller, she became a vault attendant, was later promoted to note and collection person and then became a customer service representative. In 1981, she was promoted to assistant branch manager and later completed the management training program. In January 1986, she was appointed manager of the Fords branch.
Hausleiter's performance reviews were always laudatory. She worked "long hard hours" and took pride in her work. In 1986 and 1987, her managers rated her overall performance as consistently exceeding expectations, the highest rating, noting that her branch had received the highest audit rating. Campbell signed some of Hausleiter's performance reviews, told her she was doing a good job, and encouraged and supported her. A memo from Campbell to Hausleiter in 1988 congratulated her on her second successive outstanding audit. Hausleiter received other memos from Campbell which contained similar content.
In 1990, Gervasio became Hausleiter's regional manager and helped her set up a personal finance center, which was basically personal service for customers with large balances. Gervasio recalled that he chose Fords for this service because of its large deposits, the ratio of larger average-balance customers, and good management. Hausleiter explained that "[t]he customers just loved it," and her branch attracted 150 new accounts with a $5 million increase in the branch's balance in that area. Gervasio was satisfied with the Fords personal finance center.
Gervasio rated Hausleiter's overall performance as meeting all expectations in 1990 and complimented her on achieving a "good year in gathering deposits and increasing [the Bank's] loan portfolio." Gervasio noted that Hausleiter had "the added responsibility of running the branch" in the fourth quarter, since she had no assistant during that time. In 1991, Gervasio again rated Hausleiter's overall performance as meeting all expectations.
Hausleiter recalled that Gervasio consistently praised and commended her work. She explained that in 1990 and 1991 her goals became more difficult "in view of the condition of the bank." She observed that no one could achieve every single goal. She understood that "meets all" was an excellent review, particularly in light of Campbell's statement to the managers in 1991 that "meets most" was "acceptable" and "fine."
In August 1991, Ahern became Hausleiter's regional manager. Hausleiter recalled the introductory meeting, during which Ahern said that he had "the luxury of mature, seasoned managers" in this region, which he did not have before because he had terminated them. Hausleiter remembered that Ahern was grinning and rubbing his hands together when he said this, "like he was just so pleased ... with himself."
On October 29, 1991, Hausleiter, like Baker, was summoned to the Bank's headquarters in Linden where she was terminated by Busichio. Hausleiter corroborated that Busichio emphasized that the terminations had nothing to do with performance, but rather, Busichio announced that "the [B]ank is restructuring and your jobs have been ...