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Novey v. Heartland Home Finance

March 10, 2008

RITA NOVEY, PLAINTIFF,
v.
HEARTLAND HOME FINANCE, INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Marcia S. Krieger

ORDER DENYING MOTION UNDER FED. R. CIV. P. 59

THIS MATTER comes before the Court on the Plaintiff's Motion to Amend Judgment or Grant New Trial (#100) filed pursuant to Fed. R. Civ. P. 59, to which the Defendant responded (#103) and the Plaintiff replied (#106). Having considered the same, the Court FINDS and CONCLUDES that:

I. Background

The Plaintiff, Rita Novey, commenced this action in January 2006 against Defendant Heartland Home Finance, Inc. ("Heartland"). In her original and amended complaints (#1, #6), she asserted the following claims: (1) wrongful discharge in violation of public policy premised upon violation of the Colorado Anti-Discrimination Act, § 24-34-402, et seq. (in other words, age discrimination); (2) wrongful discharge in violation of public policy premised upon Ms. Novey's refusal to violate federal and state law;*fn1 and (3) outrageous conduct. She later filed a second amended complaint (#24). In it, she asserted the same three claims but added a fourth claim of age discrimination.

Shortly before Ms. Novey filed her second amended complaint, the Court issued a Pre-Trial Preparation and Trial Setting Order (#20). The Court set a 5-day jury trial and final pretrial conference, and prescribed the required format for the final pretrial order and the witness and exhibit lists.

Before the final pretrial conference, the parties submitted a proposed final pretrial order which did not comply with the Pre-Trial Preparation and Trial Setting Order in that it failed to identify the facts which would support the elements of their claims and defenses. Consequently, the parties were required to prepare and submit a revised final pretrial order. In addition, the witness list estimated 31 hours of testimony, which exceeded the time allotted for trial.

Subsequently, Ms. Novey voluntarily dismissed her outrageous conduct claim. The parties also submitted a revised final pretrial order, which the Court issued (#62). In it, Ms. Novey identified her claims as follows: (1) wrongful discharge in violation of public policy for age discrimination, retaliation, and hostile work environment; (2) wrongful discharge in violation of public policy for refusal to commit illegal acts; and (3) age discrimination in violation of the Age Discrimination in Employment Act ("ADEA").*fn2

The Court later vacated (#74) the trial date for circumstances beyond the Court's control and set a law and motion hearing for purposes of resetting the trial. At that hearing, the Court and the parties discussed possible trial dates. The parties agreed that the matter could be tried in 4 days, and the trial was reset.

The trial occurred October 9 through 12, 2007. Based upon the evidence presented at trial, as well as the statement of claims in the final pretrial order, there were three discernible claims: (1) age discrimination; (2) wrongful discharge in violation of public policy based upon Ms. Novey's refusal to commit illegal acts; and (3) retaliation for Ms. Novey's complaints of disparate treatment. The jury was instructed as to these claims and found in favor of Heartland on all claims. Judgment entered in favor of Heartland.

II. Issue Presented

Post-trial, Ms. Novey asks the Court to either enter judgment in her favor, or to grant her a new trial, on her age discrimination claim.*fn3 She contends that the verdict was not supported by the evidence, an incomplete pretext instruction was given, and that the trial was conducted in a manner prejudicial to her. Heartland opposes Ms. Novey's motion

III. Analysis

A. Weight of the Evidence*fn4

Ms. Novey contends that the verdict on her age discrimination claim was against the weight of the evidence. Heartland disagrees.

Under Rule 59(a), a court may grant a new trial on all or some of the issues "for any reason for which a new trial has heretofore been granted in an action at law in federal court[.]" A motion under Rule 59(a) can be premised upon the argument that the verdict is against the weight of the evidence. See Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1284 (10th Cir. 1999). A court must not disturb the verdict "unless it is clearly, decidedly, or overwhelmingly against the weight of the evidence." Id. (citations and quotations omitted). In reviewing the verdict, a court must consider the record in the light most favorable to the prevailing party. Id.

To prove her claim of age discrimination, Ms. Novey was required to prove that Heartland terminated her employment because of her age. At trial, Joshua Nielsen-Mayer of Heartland testified that he terminated Ms. Novey's employment due to her negative attitude and gossiping in the Heartland office.

Ms. Novey contended that Mr. Nielsen-Mayer's proffered justification was pretextual and was being used to cover up a discriminatory motive. However, Ms. Novey offered no evidence that her attitude was not negative, nor that she did not gossip. Indeed, it was unrebutted that Ms. Novey frequently gossiped at Heartland's Aurora office. All of the witnesses who worked with Ms. Novey at the Aurora office testified either about Ms. Novey's negative attitude, or that Ms. Novey gossipped at the office, often about the personal business of other employees and how it angered the other employees.*fn5

To establish that Mr. Nielsen-Mayer's stated reason was pretextual, Ms. Novey instead relied upon the following evidence: (1) the fact that Mr. Nielsen-Mayer, who was younger than Ms. Novey, had lunch and otherwise socialized with younger employees; (2) the statement made by Mr. Nielsen-Mayer's supervisor, Eric Meyer, about his wish to hire younger employees to staff the new Heartland office; and (3) that Ms. Novey was fired by Mr. Nielsen-Mayer the Friday before the office was scheduled to move to two new locations, approximately one month after Mr. Meyer made his statement.

Construing the evidence in the light most favorable to Heartland, the verdict was not clearly, decidedly, or overwhelmingly against the weight of the evidence. There was little (and arguably no) evidence that Mr. Nielsen-Mayer had any discriminatory motive for terminating Ms. Novey's employment. As for Mr. Nielsen-Mayer's socializations with other young employees, the jury could rationally treat them as harmless and nondiscriminatory. Indeed, if a discriminatory inference could be drawn from these social interactions, then a discriminatory animus might be deemed to exist in virtually every workplace in which younger people socialized together.

Arguably, a jury could have inferred discriminatory intent from the statement made by Mr. Meyer, and could have imputed such intent to Mr. Nielsen-Mayer.*fn6 However, the jury chose not to draw this inference, perhaps because of the evidence of gossiping, or perhaps because Mr. Meyer did not state any desire to fire existing employees in order to attain the objective of hiring younger employees.*fn7 Because the Heartland Aurora office was splitting into two new offices, the jury could only speculate as to whether Heartland intended to expand its workforce, or whether the hiring of new employees necessitated the firing of existing employees. Thus, the verdict was not against the weight of the evidence.

B. Pretext Instruction

Ms. Novey contends that the Court erred in failing to give her third and fourth tendered instructions with regard to "pretext". Heartland argues that the tendered instructions were redundant, the other instructions correctly stated the law, and the proffered instructions pertained to the McDonnell Douglas*fn8 shifting burden framework which is not applicable at trial.

Pursuant to Rule 59(a), a court may order a new trial when it erroneously instructed the jury or refused to give an instruction it was required to give. See Allen v. Wal-Mart Stores, Inc., 241 F.3d 1293, 1298 (10th Cir. 2001). Under Rule 59(e), a court can alternatively amend the judgment on one of three grounds: (1) an intervening change in controlling law, (2) new evidence which was previously unavailable, or (3) the need to correct clear error or prevent manifest injustice. See Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). Here, Ms. Novey's motion appears to be based upon the third category. In considering whether there was clear error or manifest injustice, a court may reconsider its prior ruling if it has misapprehended the facts or a party's position, but it is not appropriate to revisit issues that have already been addressed or for a party to advance arguments that could have been raised previously. Id.

In her third tendered instruction, Ms. Novey asked that the jury be instructed that: "In determining whether the Defendant's stated reasons for the decision are genuine or pretextual, you must examine the facts as they appeared to the person making the employment decision (Mr. Joshua Nielsen-Mayer) at the time the decision was made." Heartland objected to the giving of this or any pretext instruction on the basis that there was no evidence to support it. In her fourth tendered instruction, she asked that the jury be instructed that: "If you do not believe the reason the Defendant Heartland has offered for Plaintiff's termination then you may, but are not required to, presume that the employer was motivated by age discrimination." Heartland also objected to this latter instruction on the basis that it was duplicative of earlier instructions. Neither instruction was given, in toto, to the jury.*fn9

Ms. Novey contends that failure to give these two instructions was contrary to the Tenth Circuit's opinion in Townsend v. Lumbermens Mut. Cas. Co., 294 F.3d 1232 (10th Cir. 2002) (Judge Broby dissenting). In Townsend, the Tenth Circuit considered a circumstance in which the district court gave no pretext instruction. Relying on several cases which applied the McDonnell Douglas burden shifting framework, the Tenth Circuit held that although a court is not always required to give a pretext instruction, it must give such an instruction when a rational factfinder could reasonably find that the defendant's explanation was false and could also infer from the falsity that the defendant is hiding a discriminatory purpose. Id. at 1241. It stated: "[W]e hold that in cases such as this, a trial court must instruct jurors that if they disbelieve an employer's proffered explanation they may -- but need not -- infer that the employer's true motive was discriminatory."*fn10 Id.

The decision in Townsend has not been expressly overruled, but in subsequent cases, the Tenth Circuit has suggested that giving the Townsend instruction is improper to the extent that it requires burden shifting under McDonnell Douglas. The shifting-burden analysis of McDonnell Douglas drops out at trial, and the burden of proving discriminatory intent remains at all times with the plaintiff. See Whittington v. Nordam Group Inc., 429 F.3d 986, 997-98 (10th Cir. 2005). For this reason, a court should not instruct a jury on the intricacies of the McDonnell Douglas framework. Id. at 993, 997-98 (disapproving use of an instruction which included the Townsend instruction, post-Townsend). "Because the employer will present evidence of a proper motive in almost every case, the ultimate question for the jury simply becomes 'which party's explanation of the employer's motivation it believes.'" Id. at 993.

Here, Ms. Novey did not request the precise language authorized in Townsend that the jury "may -- but need not -- infer that [Heartland's] true motive was discriminatory." Instead, she requested the following language: "In determining whether the Defendant's stated reasons for the decision are genuine or pretextual, you must examine the facts as they appeared to the person making the employment decision (Mr. Joshua Nielsen-Mayer) at the time the decision was made." Townsend requires no such instruction.

Ms. Novey also requested the following language: "If you do not believe the reason the Defendant Heartland has offered for Plaintiff's termination then you may, but are not required to, presume that the employer was motivated by age discrimination." This is similar to that described in Townsend, but differs in a key respect. It created a presumption, rather than allowing the jury to draw an inference. Although a presumption involves the making of an inference, it is a legal construction which "shifts the burden of production or persuasion to the opposing party[.]"

Black's Law Dictionary (8th ed. 2004).*fn11 The language proposed by Ms. Novey in her fourth tendered instruction was legally incorrect because the burden of proof remained at all times with Ms. Novey.

At Ms. Novey's request, the jury was given a pretext instruction (Concluding Instruction No. 16),*fn12 which stated:

Heartland claims that it had legitimate reasons for terminating Ms. Novey's employment. If you find that Ms. Novey's termination was for a legal, non-discriminatory business reason, even if you do not agree with Heartland that the reason justifies termination, you must find for Heartland. Ms. Novey, on the other hand, claims that Heartland's asserted reasons are a mere pretext to cover up a discriminatory motive.

Ms. Novey may show that Heartland's stated reasons for its decisions are pretextual in several ways:

1. Evidence that the stated reasons for the decisions are false;

2. Evidence that Heartland acted contrary to a written company policy prescribing the action to be taken by Heartland under the circumstances; or

3. Evidence that Heartland acted contrary to an unwritten policy or contrary to established company practice when it terminated Ms. Novey's employment.

This pretext instruction immediately followed two other instructions (Concluding Instruction Nos. 14 & 15) which described the elements of Ms. Novey's claim. Concluding Instruction No. 14 stated:

For Ms. Novey to establish her claim of age discrimination, she must prove, by a preponderance of the evidence, all three of the following elements:

1. Heartland terminated Ms. Novey's employment.

2. At the time Heartland terminated her employment, Ms. Novey was over the age of 40.

3. Ms. Novey's age was a motivating factor in Heartland's decision to terminate her employment.

The parties have stipulated to elements 1 and 2, and you must accept these ...


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