January 17, 2012
ABEL ALDAMA, PLAINTIFF-RESPONDENT,
JIFFY TRUCKING, INC., DEFENDANT-APPELLANT, AND GENERAL TRADING CO. AND FRANK COVELLO, INDIVIDUALLY, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-2843-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Telephonically Argued October 31, 2011
Before Judges Messano and Kennedy.
Following a jury trial, final judgment was entered against defendant, Jiffy Trucking Company, in favor of plaintiff, Abel Aldama, in the following amounts: $62,128.11 in compensatory damages; $4377 in pre-judgment interest; and $100,000 in punitive damages. The judge denied defendant's subsequent motion for judgment notwithstanding the verdict (j.n.o.v.), or alternatively, a new trial. This appeal followed.
Defendant raises the following arguments for our consideration:
I. THE PUNITIVE DAMAGES PORTION OF THE TRIAL WAS NOT BIFURCATED AND CONSTITUTES REVERSIBLE ERROR
II. THE JURY'S AWARD OF PUNITIVE DAMAGES WAS AGAINST THE WEIGHT OF THE EVIDENCE
III. THE JURY CHARGES AND THE JURY VERDICT SHEET WERE MISLEADING AND PREJUDICIAL
A. The Failure to Give A Breach of Contract Charge Was Plain Error
B. The Jury Interrogatory on the Conversion Claim Was Erroneous
IV. PLAINTIFF FAILED TO INTRODUCE ANY EVIDENCE TO ESTABLISH THE VALUE OF THE TRUCK FOR HIS BREACH OF CONTRACT CLAIM
We have considered these arguments in light of the record and applicable legal standards. We affirm in part, reverse in part, and remand for further proceedings.
We briefly summarize the procedural history and testimony adduced at trial.
Plaintiff filed an amended seven-count complaint against defendant, its affiliate, General Trading Co. (General), and Frank Covello, vice-president of security for General and defendant's security manager, alleging fraud, embezzlement, conversion, and breach of a lease agreement. Plaintiff sought compensatory and punitive damages. Defendants filed a single answer essentially denying the allegations and asserting various affirmative defenses. The answer incorporated Covello's counterclaim alleging that he acted in his official capacity and any claims against him individually were without merit; he sought damages for legal fees incurred.
Defendant engages independent contractors to deliver goods to area supermarkets and grocery stores on behalf of General, a wholesale food distribution company. From 2003 to 2005, plaintiff drove a truck for one of the independent contractors, Kevin Balsaka.*fn1 Plaintiff would routinely arrive for work in the morning, receive delivery instructions and drive the assigned route in a truck General had loaded with merchandise. On occasion, goods would be missing or damaged, and plaintiff would call General to resolve the problem, if possible. Sometimes this resulted in General taking responsibility, but, on other occasions, an amount reflecting the value of the merchandise would be deducted from plaintiff's check.
When Balsaka decided to sell his truck, plaintiff approached defendant about buying a truck of his own. Through a Spanish interpreter, Covello explained defendant's lease-to-purchase program that would result eventually in the transfer of ownership of the truck to plaintiff. Covello also told plaintiff that he would be charged up to $15,000 as a security deposit. Covello did not provide details as to how these payments would be made to defendant.
On March 22, 2005, as part of the transaction, plaintiff executed a vehicle lease agreement. It provided that plaintiff would pay defendant 182 weekly payments of $160, and the "rent [would] include the cost of insurance on the [v]ehicle." It further provided plaintiff with an option to purchase the truck "upon written notice . . . given . . . at least 180 days prior to expiration of the Term . . . for a purchase price . . . of $100.00 plus additional expenses (see addendum A)." Addendum A provided that plaintiff would be responsible "to pay [certain] expenses outside the purchase price of the vehicle for the period of 182 weeks," including $725 per year for collision insurance and other fees totaling "$49.69 per week." The lease agreement defined certain events of default, none of which are relevant to this case.
Plaintiff signed a second agreement, the owner-operator agreement, that required him "to keep an account with [defendant] in the amount of $15,000[,]" "[a]s security for the protection of the Shipper." Exhibit D of the agreement provided that if plaintiff was "found to have committed theft of any nature, th[e] contract [would] immediately be terminated and [plaintiff] [would] automatically forfeit, in full, [his] remaining security deposit . . . ."
The owner-operator agreement also required plaintiff to pay for and submit proof of "valid insurance coverage" to defendant. Exhibit C stated: "[plaintiff] agrees to participate in the truck liability insurance program sponsored by [defendant]. [Plaintiff] agrees to have the cost of the insurance deducted from [his] compensation on a weekly basis." The space provided for the current annual cost of insurance was left blank. Plaintiff testified there was an insurance card in the truck when he began to use it.
Plaintiff continued to experience problems with lost or damaged goods, and, on occasion, amounts were deducted from his pay as reimbursements to defendant. On July 13, 2007, plaintiff picked up his truck at General's warehouse with merchandise already sealed in the back trailer. At his second delivery to a supermarket in Long Branch, the receiving clerk claimed he was short some merchandise, went onto plaintiff's truck and took several boxes claiming they were his. Plaintiff notified defendant and was instructed to "go to the rest of the stops, and finish off the day."
The following day, Covello accused plaintiff of attempting to steal the merchandise. Plaintiff denied any wrongdoing but was fired several days later. Plaintiff claimed defendant terminated the lease and retained physical possession of the truck.
Plaintiff made a total of 116 payments toward the purchase of the truck, and defendant deducted a total of $25,000 from his weekly pay for insurance.*fn2 Defendant never returned $18,568.11 that was also deducted and placed in plaintiff's security account.
Covello testified that the July 13, 2007 delivery was to a customer participating in the "seal program," i.e., the trailer is loaded, "the door's secured [and] the seal is put on by Security." When told of the circumstances regarding the missing merchandise, Covello went to the Long Branch store to investigate.
Covello admitted that plaintiff did not know where the goods would be delivered or the contents of the trailer when he picked it up in the morning to make the delivery. Covello never spoke to the customer's receiving clerk, who observed plaintiff unload the truck, or to any of the workers who had packed the truck the night before. Nonetheless, Covello concluded plaintiff had attempted to steal the merchandise.
Michael Perri, one of the managers at the supermarket, testified that on the day in question, the delivery was "nine cases" short. Perri went onto plaintiff's truck. On top of items to be delivered elsewhere, Perri located the cases, some of which bore labels for Perri's store. He spoke to plaintiff and Covello about the situation. Perri also supplied a statement regarding the incident to Covello three years later.
Following Covello's testimony, defendant moved to dismiss the punitive damages claim. The judge denied the motion, concluding that with respect to plaintiff's conversion claim, the evidence was sufficient to submit the question to the jury.*fn3
Plaintiff moved for judgment in the amount of $25,000, the amount deducted from his salary for insurance on the truck, claiming that money had been converted by defendant. Plaintiff argued that he had secured a pre-trial discovery order prohibiting defendant from producing any documents at trial "explaining how the funds . . . that were withheld from plaintiff's pay for . . . truck liability insurance" "were used by defendant[.]" The judge denied plaintiff's motion, but agreed to provide the jury with an adverse inference charge in his final instructions.
Plaintiff also sought judgment as to the security deposit monies, claiming that the forfeiture clause in the owner-operator agreement was an illegal "penalty," not a valid liquidated damages provision. The judge agreed, and granted judgment in favor of plaintiff in the amount of $18,568.11.
After summations and charge, the jury returned a verdict in favor of plaintiff by unanimously answering the following questions as indicated:*fn4
1. From the facts and circumstances known at the time, did [defendant] reasonably find that . . . plaintiff attempted theft or committed theft of nine cartons of groceries?
Yes No X
2. What amount of money will fairly compensate plaintiff for the value of the option to purchase the truck, taking into account the value of the truck, the amount of payments made, and the lease payments which were not made? $18,560
3. Did [defendant] convert the $25,000 deducted from plaintiff's pay for insurance? Yes X No
4. If you have answered #3, yes, did . . . plaintiff prove by clear and convincing evidence that defendant's . . . conduct was activated by actual malice or wanton and willful disregard of the probability of harm?
Yes X No The trial proceeded to the punitive damages phase. Before the jury reconvened, the following colloquy occurred:
Defense counsel: Judge, just for clarification, obviously a financial condition is something that the jury is supposed to determine.
Defense counsel: And we're providing this documentation.*fn5
As far as other evidence we're not allowed to rehash what
happened in the main trial. Right?
Judge: The facts, they've already determined the essential questions of fact that have to be determined.
Defense counsel: Right, so this is really just limited to --Judge: What[,] you were wrong ladies and gentlemen, you shouldn't have done that? No. That's been determined. So you can't retry the case. You can say you shouldn't draw the inference that just because that happened this should happen. You can argue what you want, but no you can't rehash the case . . . .. . . .
I'm going to give the model charge, but the part that calls for them to decide whether there was actual malice or willful or wanting [sic] misconduct they've already determined so I'm not going to do that part. . . . That's why we asked it the first time to see whether we would have to go this far.
There was no objection from defendant. Plaintiff introduced defendant's financial statements. Defendant introduced no additional evidence.
Defense counsel started his summation by telling the jury "you've made your initial determination on the questions that were placed to you. And, as the judge indicated, because you found that there was malice . . ., we are going into this second phase where the jury may allow punitive damages." Defense counsel then argued that because the parties' relationship was "over," plaintiff had been adequately compensated for his loss by the jury's award of compensatory damages.
After summations, the judge recharged the jury and provided a verdict sheet that contained two questions which the jury unanimously answered as follows:
1. Is . . . plaintiff entitled to an award of punitive damages in this case?
Yes X No
2. What amount of money will serve to punish and deter . . . defendant . . . from future misconduct? $100,000 Defendant moved for j.n.o.v. or a new trial, arguing many of the same issues now raised before us, and which we discuss in greater detail below. The judge denied those motions and this appeal followed.
Defendant first contends that the judge committed reversible error because it was "inappropriate in the first phase of the trial to submit jury interrogatories that ask[ed] the jury to consider liability under the Punitive Damages Act," N.J.S.A. 2A:15-5.9 to -5.17 (the PDA).
Two days before trial, defendant sent written notice requesting bifurcation of plaintiff's punitive damage claim. See N.J.S.A. 2A:15-5.13(a) ("Any actions involving punitive damages shall, if requested by any defendant, be conducted in a bifurcated trial."); Rusak v. Ryan Automotive, L.L.C., 418 N.J. Super. 107, 118 (App. Div. 2011). "In the first stage of a bifurcated trial, the trier of fact shall determine liability for compensatory damages and the amount of compensatory damages or nominal damages[,]" and "[e]vidence relevant only to the issues of punitive damages shall not be admissible in this stage." N.J.S.A. 2A:15-5.13(b). Only "[i]n the second stage of a bifurcated trial, [shall] the trier of fact . . . determine if a defendant is liable for punitive damages." N.J.S.A. 2A:15-5.13(d).
We therefore agree that a trial court may not conflate the two proceedings by asking the jury to decide, in the liability portion of the trial, whether a defendant acted with the requisite state of mind to support an award of punitive damages under the PDA. See Baglini v. Lauletta, 338 N.J. Super. 282, 304 (App. Div.) (holding that the trial court should not "direct the jury to decide the punitive damage issue during the liability and compensatory damage phase of the proceedings"), certif. denied, 169 N.J. 607, appeal dismissed, 169 N.J. 608 (2001). Inclusion of question 4 on the verdict sheet during the liability portion of the trial, therefore, was error. For the reasons that follow, however, reversal is unwarranted.
"'The doctrine of invited error operates to bar a disappointed litigant from arguing on appeal that an adverse decision below was the product of error, when that party urged the lower court to adopt the proposition now alleged to be error.'" N.J. Div. of Youth & Family Servs. v. M.C. III, 201 N.J. 328, 340 (2010) (quoting Brett v. Great Am. Recreation, 144 N.J. 479, 503 (1996)). In this case, the doctrine clearly applies.
Both before trial and prior to the charge conference, defendant submitted proposed verdict sheets that specifically requested the judge to ask the jury during the first phase of the trial whether it acted with "malice." Defendant never objected to the judge's charge during the liability phase regarding "clear and convincing evidence," "actual malice" and "wanton and willful disregard" as used in the PDA. Defendant never objected to the final form of the verdict sheet.
The Court has noted, however, that "the doctrine of invited error . . . would not automatically apply . . . if it were to 'cause a fundamental miscarriage of justice.'" Id. at 342 (quoting Brett, supra, 144 N.J. at 508). There was no "fundamental miscarriage of justice" in this case.
As we discuss below, there was sufficient evidence to support the jury's verdict on punitive damages. The judge's instructions followed the model jury charges in both the liability and punitive damages phases of the trial.
Defendant contends that because the question of malice was decided in the first phase of the trial, it was denied the opportunity to present evidence on the issue or effectively argue during summation in the punitive damages phase. However, defendant points to no additional evidence it sought to introduce that was not introduced before the jury in the first phase.*fn6 And, as is clear from the exchange quoted above, defense counsel never objected to the limitations placed upon his argument during the second phase of the trial.
Defendant next asserts that "any review of the trial record demonstrates that there is no evidence from which the jury could rationally have concluded that [defendant's] conduct was actuated by actual malice or accompanied by a wanton and willful disregard of [plaintiff]." We disagree.
When deciding a motion for j.n.o.v., a trial judge must accept as true all the evidence which supports the position of the non-moving party, according him the benefit of all legitimate inferences and, if reasonable minds could differ, the motion must be denied. Verdicchio v. Ricca, 179 N.J. 1, 30 (2004). We apply the same standard. Frugis v. Bracigliano, 177 N.J. 250, 269 (2003).
"[A] motion for a new trial should be granted only after 'having given due regard to the opportunity of the jury to pass upon the credibility of the witnesses, it clearly and convincingly appears that there was a miscarriage of justice under the law.'" Risko v. Thompson Muller Auto. Group, Inc., 206 N.J. 506, 521 (2011) (quoting R. 4:49-1(a)). "A miscarriage of justice has been described as a pervading sense of wrongness needed to justify [an] appellate or trial judge undoing of a jury verdict . . . [which] can arise . . . from manifest lack of inherently credible evidence to support the finding, obvious overlooking or undervaluation of crucial evidence, [or] a clearly unjust result." Ibid. (internal quotations omitted) (alteration in original). We apply the same standard of review on appeal. Id. at 522.
In denying defendant's post-verdict motions, the judge concluded that withholding $25,000 from plaintiff without furnishing proof that the money was used to pay for insurance, an inference that any records defendant failed to produce would not support its position and other circumstances were sufficient to prove both conversion and willful and wanton conduct. We agree.
The PDA provides:
Punitive damages may be awarded . . . only if the plaintiff proves, by clear and convincing evidence, that the harm suffered was the result of the defendant's acts or omissions, and such acts or omissions were actuated by actual malice or accompanied by a wanton and willful disregard of persons who foreseeably might be harmed by those acts or omissions. This burden of proof may not be satisfied by proof of any degree of negligence including gross negligence. [N.J.S.A. 2A:15-5.12(a).]
"[A]ctual malice" is defined as "an intentional wrongdoing in the sense of an evil-minded act" and "wanton and willful disregard" means "a deliberate act or omission with knowledge of a high degree of probability of harm to another and reckless indifference to the consequences of such act or omission." N.J.S.A. 2A:15-5.10. Tortious conduct comprising intentional conversion may support an award of punitive damages. See, e.g., Winkler v. Hartford Accident & Indem. Co., 66 N.J. Super. 22, 28 (App. Div.), certif. denied, 34 N.J. 581 (1961).
Defendant argues that it did not act with the requisite state of mind because it "made no attempt to conceal the deductions" and plaintiff "knew of the[m] . . . but never objected to or disputed them." Furthermore, since the agreements "were ambiguous and open to multiple interpretations," defendant "had some basis to believe that it was acting in accordance with its contractual rights, rather than with the evilness or wanton dishonesty required to sustain an award of punitive damages." The argument presents a crabbed interpretation of the evidence.
The jury rejected defendant's claim that it acted reasonably in firing plaintiff because of an attempted theft. That determination is amply supported by the record. The jury further found that defendant deducted $25,000 from plaintiff's pay ostensibly to secure insurance, despite the fact that the lease agreement provided that the costs of insurance were included in the rental payments. The judge instructed the jury that it was permitted to infer from defendant's failure to produce documentation explaining how that money was spent, that any such "documents would not have been helpful to [defendant's] case."*fn7 Defendant forfeited plaintiff's entire security deposit, more than $18,000, based upon the belief that he had attempted to steal approximately $200 in merchandise, when, in fact as Covello was well aware, the merchandise itself was never actually lost or misappropriated.
Under the totality of the circumstances, we find no basis to disturb the jury's determination that defendant acted with a requisite state of mind to support the award of punitive damages.
With respect to the $25,000 admittedly deducted from plaintiff's pay, defendant contends that the jury should have been provided with instructions on the law of contracts and not simply instructions on the tort of conversion. Since defendant failed to object to the charge as required by Rule 1:7-2, we review the claim under the plain error standard. Dynasty, Inc. v. Princeton Ins. Co., 165 N.J. 1, 17-18 (2000). Regarding jury instructions, "[p]lain error is defined as legal impropriety . . . prejudicially affecting the substantial rights of the defendant and sufficiently grievous to justify notice by the reviewing court and to convince the court that of itself the error possessed a clear capacity to bring about an unjust result." Id. at 18 (internal quotation omitted).
In summations, both attorneys clearly focused the jury's attention on the two aspects of plaintiff's claim, i.e., the damages he suffered from the termination of his lease-purchase agreement for the truck, and the deductions of $25,000 from his pay to ostensibly buy insurance. A review of the entire record clearly discloses that the case proceeded under two separate theories of liability regarding the two issues.
Defendant correctly notes that the judge never gave any charge regarding the law of contracts. But, in discussing plaintiff's claim for the $25,000 deducted from his pay, the judge properly instructed the jury on the tort of conversion. Defendant does not contend otherwise.
Instead, defendant now asserts for the first time that had the judge also charged the jury with the basic model jury charges regarding the law of contracts as to the disputed $25,000, the jury would have rejected the conversion claim and found only that defendant had breached the contract. Unfortunately, defendant never clearly expressed this argument to the jury or the trial judge, and never objected to the charge as given. We believe the omission provides no basis to reverse the jury's award of $25,000 on plaintiff's conversion claim, for which the jury received proper instructions and which was otherwise supported by the evidence.
Defendant further argues that jury interrogatory 3 erroneously conflated the conversion liability and damages issues into a single question. While we agree the question should have been asked in two parts, we find no plain error.
Jury "interrogatories, like any other instructions to a jury, [are] 'not grounds for a reversal unless they [are] misleading, confusing or ambiguous.'" Mogull v. CB Commercial Real Estate Group, Inc., 162 N.J. 449, 467 (2000) (quoting Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 418 (1997)). In refusing to find plain error in the jury interrogatories at issue, the Court in Mogull specifically noted that, like the situation at hand, the interrogatories "were presented to both parties' counsel the day before they were given to the jury[,]" "[t]he court went over the interrogatories word by word in a charge conference," and counsel "never objected to them until the post-trial motions for new trial and judgment notwithstanding the verdict." Ibid.
We conclude that interrogatory three did not mislead the jury or lead to an unjust result. R. 2:10-2. It provides no basis to reverse the judgment.
Lastly, defendant argues there was no proof offered as to the value of the truck that was leased to plaintiff, and, therefore, the jury's award of damages in the amount of $18,500 for defendant's breach of the lease agreement was in error. Interrogatory 2 asked:
What amount of money will fairly compensate plaintiff for the value of the option to purchase the truck, taking into account the value of the truck, the amount of payments made, and the lease payments which were not made?
The judge provided no instructions on the law of contracts or the measurement of damages as the result of any breach.
Defendant contends that the value of the truck must be established by an expert. While we disagree that the damages must have been proven through expert testimony, we conclude that the judge's failure to provide any instruction was plain error requiring reversal.
In denying defendant's post-judgment motions on this issue, the judge found "th[e] argument . . . without merit [since] the lease contained an option to purchase which set the price or agreed value of the vehicle at $29,120." That amount reflects the product of 182 weekly payments of $160, but it does not include the $100 price of the purchase option. In awarding plaintiff $18,560, the jury apparently multiplied the number of payments plaintiff actually made, 116, by the monthly payment amount, $160.
However, the judge provided absolutely no instructions whatsoever on the law of contracts or the computation of compensatory damages. Defendant submitted requests to provide various portions of the model jury charges, but never objected during the charge conference to the judge's recitation of the charges he intended to give, which omitted the request. Defendant never objected to the final charge as given.
Nonetheless, defendant argued throughout the trial and during summation that there was no breach of the lease agreement for at least two specific reasons. First, that it justly fired plaintiff for the attempted theft. Second, that plaintiff, after being terminated as an owner-operator, never offered to continue the payments on the truck and, in essence, had terminated the agreement.
Perhaps the jury's answer to interrogatory 1 provided a sufficient rejection of defendant's first argument. But, there was no explanation of how the factual dispute regarding the second contention related to the general law of contracts. See e.g., Model Jury Charge (Civil) 4.10N (d) and (e), "Affirmative Defenses," (approved 4/99) (providing instructions on "Waiver" and "Termination").
Additionally, the judge provided no instructions whatsoever on the law of damages regarding plaintiff's breach of contract claim. While the jury may have made a logical assessment of plaintiff's compensatory damages, defendant was entitled to have the jury consider a number of issues that should have been explained with proper charges. For example, although plaintiff made $18,560 in payments, he obviously obtained some benefit from having the truck and conducting his business during the more than two years that the agreement was in effect.
We conclude that the failure to provide any instructions whatsoever on the law of contracts and damages for breach of contract was plain error and clearly had the capacity to lead to an unjust result. R. 2:10-2; and see, e.g., Ench v. Bluestein, 52 N.J. Super. 169, 176-77 (App. Div. 1958) (In breach of contract action where defendant presented a meritorious defense as to lack of showing of damages, but counsel neither requested such a charge nor objected to the charge as given, trial judge's failure to charge the jury on the issue constituted plain error).
We reverse that portion of the judgment awarding plaintiff $18,560 in compensatory damages and pre-judgment interest on that amount; we remand the matter to the trial court for further proceedings on plaintiff's breach of contract claim regarding the lease agreement. In all other respects, we affirm the judgment. We do not retain jurisdiction.