Longo v. Pleasure Productions, Inc.

71 A.3d 775, 215 N.J. 48, 36 I.E.R. Cas. (BNA) 283, 2013 WL 3811800, 2013 N.J. LEXIS 783
CourtSupreme Court of New Jersey
DecidedJuly 24, 2013
StatusPublished
Cited by17 cases

This text of 71 A.3d 775 (Longo v. Pleasure Productions, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Longo v. Pleasure Productions, Inc., 71 A.3d 775, 215 N.J. 48, 36 I.E.R. Cas. (BNA) 283, 2013 WL 3811800, 2013 N.J. LEXIS 783 (N.J. 2013).

Opinion

Judge RODRÍGUEZ

(temporarily assigned) delivered the opinion of the Court.

In this appeal, we address the adequacy of a jury instruction on punitive or exemplary damages in the context of a claim pursuant to the New Jersey Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8. Specifically, we address the necessity of an “upper management” jury instruction as defined in Cavuoti v. New Jersey Transit Corp., 161 N.J. 107, 122-28, 735 A.2d 548 (1999), in order to sustain such an award. Our analysis leads to the conclusions that: (1) an upper management jury instruction was necessary in this case to support such an award; and (2) the same standard for awarding punitive damages that applies to claims pursuant to the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, applies to CEPA claims. There[52]*52fore, we vacate the punitive damages award and remand for a new trial solely on such damages.

I.

Plaintiff Doreen Longo sued her former employer, East Coast News Corp. (East Coast) and several former co-employees, some of whom could be part of East Coast’s upper management echelon. Her complaint alleged that she was terminated from her position by East Coast management because she had complained of acts of sexual harassment and intimidation by former co-employee Marc Kercheval. East Coast answered the complaint and counterclaimed.

Longo testified that she was hired by East Coast in March 2002 to work in the sales department. Defendant David “Bo” Pezzullo was her direct supervisor. He reported to defendant Michael Savage, East Coast’s general manager. East Coast is owned by two brothers, Frank and Michael Koretsky,1 who are its co-presidents and owners of Pleasure Productions, Inc. (Pleasure Productions) and International Video Distributors, L.L.C. (International Video), which are involved in the adult entertainment business.

Longo and many of her co-workers attend annual shows at East Coast’s New Jersey warehouse where individual buyers purchase adult products. At these shows, there are live performances of sexual acts to entertain the customers. At one show, Longo was shown photographs of Pezzullo receiving oral sex while at a company dinner. In a separate incident, Pezzullo exposed himself to her after taking an overdose of a drug used to promote an erection. Longo was not upset by the East Coast working environment. She “thought it was funny.”

Kercheval began working with Longo in 2005 in the sales department. Initially, they had an amicable relationship. Howev[53]*53er, a year later, their relationship deteriorated. Longo testified that Kercheval threatened to “knock everything off [her] desk” and sexually assault her. He suggested that Longo should trade sexual favors with a potential client in order to obtain new business. During an incident with another co-worker, Kercheval threw everything off his desk and threw a chair across the room. On another occasion, Kercheval put a fork to Longo’s face and told her that he wanted to gouge out Pezzullo’s eyes. Longo became “terrified” of Kercheval. She expressed her fear to Pezzullo several times. Nothing was done.

In January 2006, because Kercheval’s aggression continued, Longo sent an e-mail to Pezzullo describing Kercheval’s various outbursts of violent behavior. She requested Pezzullo, via e-mail, to “[p]lease help us.” There was no response to this e-mail message.

On February 1, 2006, Longo wrote a second e-mail to Pezzullo, reiterating that Kercheval’s behavior was continuing, and expressing her fear that “this is getting to be a dangerous situation.” Longo sent a copy of the e-mail to General Manager Savage, with an explanation that she and Pezzullo had spoken to Kercheval, but the problems continued. There was no response to this second email. She went to see Savage to make sure he received her email. He acknowledged getting it but said he was busy at the moment.

One week later, Longo was called into a meeting with Kercheval, Koretsky, and Sue Gliek, the head of Human Resources. Koretsky screamed expletives at Longo and Kercheval, and called them “idiots,” “liars,” and “lousy sales reps.” He then said, “I don’t need to put up with this [expletive] from either one of youse.” On February 8, 2006, Kercheval and Longo received identical employee warming notices for poor sales and inappropriate remarks about East Coast and fellow employees. Kercheval signed the notice, and apologized for “any distress caused by [his] actions.” Longo wrote a rebuttal stating that she was “hurt that she was receiving a warning notice in response for [her] reporting [54]*54to [her] manager Bo Pezzullo & General Manager Mike Savage a situation of Sexual Harassment & Hostile Work Environment.” She said that she “never [made] and would never ma[k]e any disparaging remarks about the company.”

A short time later, Kercheval was fired. Then, Longo was called into a meeting with Savage and Christopher J. Curylo, an in-house attorney for East Coast. Savage said, “Doreen, we really like you. You’re a great sales rep, and I hate to do this, but I got to let you go.” Savage then said, “your complaints about [Kereheval] caused a commotion and we like a nice, laid back environment around here.”

Longo sued East Coast, its related companies Pleasure Productions and International Video, Koretsky, Curylo, Savage, Pezzullo, and Kercheval. The complaint initially alleged violations of CEPA and LAD, East Coast counterclaimed alleging that Longo had violated a non-competition and non-solicitation agreement. Prior to trial, Longo withdrew the LAD claim.

At trial, April Demarest testified on behalf of Longo. She related that her supervisor sexually harassed her immediately after she began working at East Coast in June 2002. She testified that after she complained to Pezzullo and Koretsky, she was transferred to another department. In late 2002, a dispute arose between Demarest and Savage. Demarest testified that when she went to meet with Savage in his office, he locked his door and told her “You know, if you’d sleep with me, things would go a lot smoother.” She refused, and as she left the office, he told her “I’m going to make your life a living hell now.” About eight months later, she gave a three-week resignation notice. Before the three weeks expired, she was fired.

At the close of Longo’s case, the trial judge dismissed her complaint against Pleasure Productions, International Video, Curylo, and Kercheval. The judge also dismissed East Coast’s counterclaim. The jury returned a no-cause verdict in favor of Savage and Pezzullo but found East Coast and Koretsky in his [55]*55individual capacity liable to Longo in the amount of $120,000 for economic loss and $30,000 in emotional distress damages.

A second phase of trial began to consider punitive damages against East Coast only. During the punitive damages phase, Longo’s counsel argued to the jury:

East Coast News operates not just through Frank Koretsky. It operates through all of its employees and it is responsible for the behavior of all of its employees.... East Coast News is also responsible for the behavior of Pezzullo and it’s also responsible for the behavior of Savage. In each case you have people who recklessly disregarded the plaintiffs rights. When Savage got his complaint, he said I just didn’t believe it.

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71 A.3d 775, 215 N.J. 48, 36 I.E.R. Cas. (BNA) 283, 2013 WL 3811800, 2013 N.J. LEXIS 783, Counsel Stack Legal Research, https://law.counselstack.com/opinion/longo-v-pleasure-productions-inc-nj-2013.