Smith v. Brown-Forman Distillers Corp.

196 Cal. App. 3d 503, 241 Cal. Rptr. 916, 2 I.E.R. Cas. (BNA) 1516, 1987 Cal. App. LEXIS 2346
CourtCalifornia Court of Appeal
DecidedNovember 23, 1987
DocketB021226
StatusPublished
Cited by27 cases

This text of 196 Cal. App. 3d 503 (Smith v. Brown-Forman Distillers Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Brown-Forman Distillers Corp., 196 Cal. App. 3d 503, 241 Cal. Rptr. 916, 2 I.E.R. Cas. (BNA) 1516, 1987 Cal. App. LEXIS 2346 (Cal. Ct. App. 1987).

Opinion

*509 Opinion

LILLIE, P. J.

Defendants 1 appeal from a judgment on special verdict in favor of plaintiff and against defendant Brown-Forman Distillers Corporation (Brown-Forman) for $230,562 compensatory damages plus $250,000 punitive damages upon findings that plaintiff resigned from employment with Brown-Forman as a result of defendant’s requirement that he commit a crime as a condition of employment. On appeal from the judgment, Brown-Forman challenges the sufficiency of the evidence to support the jury’s findings on liability and damages, and claims the court erred in instructing the jury on constructive wrongful discharge and in admitting evidence.

Facts

In February 1984 plaintiff filed a complaint for damages against defendants asserting, inter aha, claims for constructive wrongful discharge from employment and intentional infliction of emotional distress. After a lengthy jury trial, the jury rendered a special verdict finding that defendants required plaintiff to commit a crime as a condition of his employment; that plaintiff resigned as a result of the requirement that he commit a crime; that plaintiff suffered damages of $230,562 as a proximate result of his constructive discharge; and defendants did not engage in outrageous conduct with intent to cause plaintiff severe emotional distress. The jury found defendants guilty of oppression or malice and assessed punitive damages of $250,000 against Brown-Forman and zero punitive damages against Gold and Hutchins. Judgment on the above verdict was entered only against BrownForman for the total sum of $480,562.

Because the parties on appeal each accuse the other of inadequate presentation of the facts in the briefs, we have read the record and present the following facts favorable to the respondent, giving him the benefit of every reasonable inference and resolving conflicts in support of the judgment. (Vernon Fire Fighters Ass'n v. City of Vernon (1986) 178 Cal.App.3d 710, 718-719 [223 Cal.Rptr. 871].)

*510 In February 1983, at the age of 66, plaintiff resigned from employment with Brown-Forman under circumstances which plaintiff claims constitute a constructive wrongful discharge. In 1963, when he was 45 years old, plaintiff was hired by Brown-Forman as a sales trainee and was assured then that he could work until the mandatory retirement age, then age 65 and later changed to age 70. Brown-Forman was and is a distiller of various liquor products. In California, the liquor industry is structured in a three-tiered system pursuant to which the distiller or supplier sells to the wholesaler (or distributor), and only the distributor is allowed to sell to the retailer. The Federal Alcohol Administration Act passed in 1933 and regulations promulgated under the act and administered by the Bureau of Alcohol, Tobacco and Firearms (B.A.T.F.) govern the industry and prohibit a distiller from giving away to the retailer anything of value, including goods and services, causing an exclusion of a competitor’s products. Under the federal laws, furnishing free labor to a retailer to get prime shelf space belonging to another distiller is illegal. The California Alcoholic Beverage Control Act also regulates the liquor industry and pursuant to regulations enforced by the Department of Alcoholic Beverage Control (A.B.C.), a distiller is allowed to have displays in retail stores, move its own products on the retailer’s shelves at the request of the retailer, and rotate brands in the storeroom so the product does not get old. A distiller, however, is forbidden under California law to move other companies’ products or to even price mark its own brands on the retailer’s premises; handling other companies’ products is a misdemeanor punishable by fine or six months in jail.

In 1971 plaintiff was promoted to chain store manager in Southern California. From 1976 to April 1981, his immediate supervisor was Tom West, the state sales manager of Southern California. West told all his employees to carry with them a September 1976 letter from the company’s president, Mr. Brown, in which Brown directed all employees to comply with all federal and state regulations and laws relating to pricing and trade practices upon penalty of being terminated from employment. No specific laws were set out in the letter, but employees were invited to address questions about a particular law to the company’s legal department in Louisville, Kentucky. Before 1983, Brown-Forman had no manual that set out what its employees could or could not do under the laws.

Under West, plaintiff never attended “sets” or “resets” at retail stores because West believed they were illegal. At a set, a retailer would place liquor on the shelves of a new store according to a schematic and at a reset, the retailer would change the schematic and move products to different locations. At a set or reset, an employee of the retailer would usually be the leader or person in charge and he would direct the employees of the various *511 distillers and distributors attending the set/reset. The distillers had no control over their activities when they attended a set or reset and the retailers would have them sweeping floors, loading beer boxes and pricing items. It was common knowledge in the industry that at a set or reset, everybody did everything, including handling other companies’ products, although it was also common knowledge that such conduct may be a violation of law.

In late 1980, Brown-Forman developed a five-year plan for its Southern California area pursuant to which one of plaintiff’s key tasks was to attend sets and resets in order to ensure that defendant’s products would get prime positions on the store shelves. At that time other distillers were contacting the chain stores and going to sets and resets. West refused to direct his employees to attend and one of his reasons for resigning from Brown-For-man in April 1981 was because he was opposed to sets and resets. In 1981, Charles Hutchins replaced West. Hutchins told plaintiff to go out and contact all chain store managers and offer them merchandisers to do sets, resets, and displays. When plaintiff presented the program to the liquor buyer from Lucky Markets, he told plaintiff that it was illegal and he would have no part of it. In May 1982, plaintiff reported the comment to Hutch-ins’s supervisor, Mr. Gold, regional sales director and vice-president of B-F Spirits Limited, a division of Brown-Forman. In July 1982, Felix Lopez became chain store manager and supervised Jim Riggio and plaintiff, whose title became chain store supervisor. In July, at the request of Hutchins, plaintiff and another Brown-Forman employee attended a reset at a Von’s store in Tarzana where they set up and priced the beer box section in the liquor department. Brown-Forman does not sell beer. Plaintiff reported these activities to his supervisor in his weekly report. On October 6, 1982, Lopez directed plaintiff to attend a reset in Lancaster, where he tore down and washed shelves, took various brands of liquor off the .shelves, priced them, and swept up the floor. Believing that the reset in Lancaster was illegal, plaintiff told Hutchins, who responded that it was included in his key tasks, he had to attend, and that Gold was very high on sets and resets.

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Bluebook (online)
196 Cal. App. 3d 503, 241 Cal. Rptr. 916, 2 I.E.R. Cas. (BNA) 1516, 1987 Cal. App. LEXIS 2346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-brown-forman-distillers-corp-calctapp-1987.