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Judith Carrie Rusak v. Ryan Automotive

February 8, 2011


On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-539-07.

The opinion of the court was delivered by: Messano, J.A.D.



Argued December 14, 2010

Before Judges Graves, Messano and Waugh.

The opinion of the court was delivered by MESSANO, J.A.D.

At trial, the jury awarded plaintiff Judith Carrie Rusak compensatory damages based upon defendants' violation of the Law Against Discrimination, N.J.S.A. 10:5-1 to -49 (the LAD). The sole issue presented on appeal is whether the trial judge erred by not submitting plaintiff's punitive damages claim to the jury. Having considered the arguments raised in light of the record and applicable legal standards, we reverse and remand the matter for a new trial limited to plaintiff's claim for punitive damages.



We briefly summarize the facts adduced at trial in a light most favorable to plaintiff.*fn1 In August 2001, plaintiff began working as a salesperson at Gearhart BMW, an automobile dealership. She continued her employment after the dealership was acquired in 2003 by defendant, Ryan Automotive, L.L.C. (Ryan). The dealership became known as Denville BMW, and plaintiff, the only full-time female salesperson, consistently garnered awards for her work, including the "Ryan Pinnacle Award," recognizing "top sales performers" who also received near perfect scores on customer surveys. Plaintiff also typically ranked first or second in sales volume.

Upon acquiring the dealership in 2003, Ryan issued an anti-harassment and discrimination policy. Among other things, that policy included the following provision:

[H]arassment includes . . . slurs, jokes and other verbal, graphic, or physical conduct relating to an individual's race, color, sex, sexual orientation . . . [and] includes sexual advances, requests for sexual favors, unwelcome or offensive touching, and other verbal, graphic or physical conduct of a sexual nature.

The policy set forth a reporting and investigative mechanism in the event an employee believed a violation had occurred.

In April 2005, Ryan hired co-defendant Nilesh Kotecha as general manager of the dealership.*fn2 Kotecha believed that the "[dealership] was having a lot of problems" and that he needed "help . . . [to] get the store running." He hired a longtime friend, Cyrus Seervai. On June 11, 2005, Kotecha organized a Saturday morning meeting with the sales staff to address his concerns about employee conduct and declining business. Kotecha intended to deliver a stern message.

Plaintiff believed that Kotecha's anger at the meeting was directed entirely at her. Although the two had barely spoken prior to the meeting, upon hearing a question from plaintiff, Kotecha walked to her desk, stood "very close," looked "directly at [her]" and began screaming and cursing. David Elliot, another employee who was at the meeting, witnessed Kotecha "in [plaintiff's] face" screaming at her.

After the meeting concluded, plaintiff sought out Kotecha to determine why he had admonished her. Kotecha handed her his cell phone and told her to call Ryan's owner, Rod Ryan. Kotecha claimed that Rod Ryan would not be upset at his use of foul language and would believe him, not plaintiff.

On the following Monday, plaintiff was called to the office of Michelle Danz, an office manager who had heard about Kotecha's conduct from other employees. Danz authored a memo to plaintiff's file "describing . . . things that had been told to [Danz] about the meeting." Danz also acknowledged that plaintiff wanted to "give[] two weeks notice" because she was outraged by Kotecha's conduct. Danz brought her concerns to one of Ryan's vice-presidents, "Mr[.] Forcini," and its comptroller, Kathryn Reynolds.

A few days later, Kotecha became irate with Danz over a trivial matter and followed her into her office. Kotecha told her, "don't come back, don't ever come back again," and began "shoving chairs all around, knocking one over." Believing that she was fired, Danz packed her belongings and went home, only to receive a phone call from Forcini "ask[ing] . . . [her] to come back." Concluding that she could never again work in such a "hostile environment," Danz declined the offer and warned Forcini that Kotecha had an "anger problem." She also later advised Rod Ryan that plaintiff "ha[d] a good case down the road."

Soon after Danz's departure, plaintiff received a telephone call from Lisa Cesaro, a representative from human resources who was investigating the complaints regarding Kotecha. Cesaro reassured plaintiff that she would come to the dealership herself to "talk to [plaintiff] privately." However, upon her arrival, Cesaro approached plaintiff and escorted her into a room where Kotecha was present. Cesaro and Kotecha accused plaintiff of trying to bribe Kotecha into giving her boyfriend a job at a new dealership, and scolded plaintiff for repeatedly having a "problem with attendance and punctuality." Plaintiff left the meeting "shocked" and realized that her complaints about Kotecha had "f[allen] on deaf ears."

Kotecha's insults and crude comments escalated. Plaintiff testified he would often mutter vulgarities under his breath, adding they were his "favorite" words. Kotecha would walk by plaintiff's desk and call her a "dumb . . . stupid blonde" all "within ear shot" of other employees. Once, when plaintiff was returning from the bathroom, Kotecha asked if she was menstruating.

Kotecha would often subject plaintiff and another female employee, Carolyn Noce, to explicitly graphic sexual stories about Ryan executives engaging in sexual acts with other executives' wives, claiming some would have "sex on the hood of [a] car." After calling plaintiff a derogatory name, Kotecha dared her to phone "Rod [Ryan]," boasting she would never be believed.

Noce testified that on December 31, 2005, Kotecha removed plaintiff's name from a list of salespersons used to determine who would receive annual awards from the dealership. Names were usually removed from the list only if the salesperson had left employment with the dealership, and Noce knew plaintiff had not been terminated. Kotecha also removed plaintiff's "telephone and computer" after accusing her of not "want[ing] to wait on people," and plaintiff's name was removed from the internal BMW website that was used to transact sales business.

On or about February 23, 2006, Seervai showed plaintiff and Noce graphic pictures of female genitalia, leaving a copy of the pornography on plaintiff's desk. He subsequently e-mailed the pictures to plaintiff's and Noce's office and home computers. Seervai asked plaintiff and Noce "which one [was] [theirs]." Plaintiff told Kotecha outside the dealership that Seervai "had sent [her] some porn on the [I]nternet during work hours." Kotecha told plaintiff to "shut the fuck up," walked inside, and told other employees that "he was going to fire [her]."

Plaintiff did not return to work after February 25, 2006.*fn3 She experienced "anxiety attacks," "was under a doctor's care for quite some time," and was "taking Xanax and Prozac." Plaintiff remained unemployed until October 2007.

On February 21, 2007, plaintiff filed her complaint alleging three causes of action: a violation of the LAD in that she was discriminated against and harassed on the basis of her gender; retaliation in violation of the LAD; and the common law tort of intentional infliction of emotional distress. She sought compensatory damages ...

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