Lead Opinion
The issue before the Court on this appeal is whether the trial court erred in granting defendant judgment notwithstanding the verdict as to punitive damages. For the reasons stated herein, we conclude that the trial court did not err, and the decision of the Court of Appeals is reversed.
This case arises out of an action for malicious prosecution instituted by plaintiff Bernard Scarborough as the result of his having been indicted, tried, and acquitted of embezzlement from his employer, defendant Dillard’s, Inc. At the outset, we note that the sufficiency of the evidence to support the underlying tort of malicious prosecution is not before the Court in that defendant did not cross appeal the trial court’s denial of its motion for judgment notwithstanding the verdict (JNOV) as to the jury’s determination of liability for malicious prosecution.
The evidence presented at trial tended to show that on 27 October 1997, plaintiff worked in the ladies’ shoe department at Dillard’s, where he had been employed part-time for approximately two years. Around 8:00 p.m., plaintiff waited on two women for approximately thirty-five to forty minutes, showing them about twenty pairs of shoes. When one of the women decided to purchase two pairs of shoes, plaintiff took the shoes to the register, scanned the shoes, and placed them in a bag. Before plaintiff completed this transaction, the other woman came to the register and asked him about trying on a pair of shoes. Plaintiff voided the first transaction so he could check the price of the shoes for that customer and to prevent his employee number from remaining in the register when he went into the stockroom to look for the shoes. Plaintiff was unable to find shoes in the width the woman needed but agreed to stretch the shoes for her. The two women stated that they would return for the third pair. The women then left Dillard’s with two pairs of shoes for which no payment had been made.
The women later returned and asked plaintiff if he could hold the third pair of shoes until the next day. Plaintiff agreed, and the woman who wanted the shoes wrote her name, Betty Jordan, on a piece of paper which plaintiff attached to the shoe box. Plaintiff also wrote his employee number on the piece of paper so he could receive credit for the sale.
After the women left, two other shoe department employees, Lynette Withers and Selma Brown, who had watched the transaction,
When plaintiff arrived at Dillard’s the next evening, he met with Mr. Hicklin, Kevin McCluskey, the store manager, and Sergeant Cullen Wright, a Dillard’s loss prevention employee, who also worked full time as an officer for the Charlotte-Mecklenburg Police Department (CMPD). During the two-hour interview, plaintiff explained that he had made a mistake, took responsibility for the incident, and offered to pay Dillard’s for the shoes. Plaintiff also offered to submit to a polygraph exam. Mr. McCluskey accused plaintiff of knowing the two women and threatened to have him prosecuted for embezzlement and ruin his full-time job at First Union National Bank if he did not provide the names of the women. Plaintiff told Mr. McCluskey that he did not know the women and could not provide their names. Sergeant Wright also participated in questioning plaintiff about the incident and took a written statement from him. At the end of the interview, Mr. McCluskey terminated plaintiff for embezzlement.
After plaintiff’s termination, Sergeant Ken Schul, another Dillard’s security guard who was employed full time as an officer for the CMPD, took statements from four Dillard’s employees, Ms. Withers, Ms. Brown, Mr. Gainsboro, and Mr. Hicklin, about plaintiff’s failed transaction. On 12 November 1997, Sergeant Schul met with Assistant District Attorney (ADA) Nathaniel Proctor to present a case against plaintiff. Upon review of the information presented, Mr. Proctor authorized the prosecution of plaintiff for embezzlement. Mr. Proctor did not ask for additional information or investigation. Thereafter, Sergeant Schul obtained a warrant for plaintiff’s arrest.
Approximately two weeks after his termination from Dillard’s, plaintiff was arrested in the atrium of One First Union Center in Charlotte while on his way to his office. Uniformed police officers, one of whom was Sergeant Wright, handcuffed plaintiff and escorted him outside to a police car. Upon his release from jail, plaintiff returned to First Union to find that his employment was suspended
Plaintiff was subsequently indicted by the grand jury for embezzlement. Plaintiff was tried for embezzlement in Superior Court, Mecklenburg County. On 27 May 1998, a jury found plaintiff not guilty.
On 4 April 2001, plaintiff initiated this action for malicious prosecution. Following a trial in January 2005, the jury returned a verdict in plaintiffs favor, awarding him $30,000 in compensatory damages and $77,000 in punitive damages for malicious prosecution. On 24-February 2005, the trial court granted Dillard’s motion for JNOV as to punitive damages and entered an order setting aside that award. Plaintiff appealed to the Court of Appeals, which remanded the case because, contrary to N.C.G.S. § ID-50, the trial court’s 24 February 2005 order contained no reasons why the trial court set aside the jury verdict as to punitive damages. Scarborough v. Dillard’s, Inc.,
The Court of Appeals reversed the trial court’s entry of judgment notwithstanding the verdict as to punitive damages. The Court of Appeals’ majority reviewed the issue under the “more than a scintilla of evidence” standard. Scarborough v. Dillard’s Inc.,
Defendant appealed to this Court based on the dissenting opinion in the Court of Appeals. Defendant contends that the Court of Appeals applied an incorrect standard of review and that the evidence was insufficient to support a jury’s finding of an aggravating factor. We agree.
This Court has stated that “[t]he test for determining the sufficiency of the evidence when ruling on a motion for judgment notwithstanding the verdict is the same as that applied when ruling on a motion for directed verdict.” Northern Nat’l Life Ins. Co. v. Lacy J. Miller Mach. Co.,
“The standard of review of directed verdict is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury.” Davis v. Dennis Lilly Co.,
We must first determine the application of these principles to an award of punitive damages. Our General Assembly has set parameters for the recovery of punitive damages through the enactment of Chapter ID of the North Carolina General Statutes. To recover punitive damages a claimant must prove
that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
N.C.G.S. § 1D-I5(a) • (2007). The statute further provides that a claimant “must prove the existence of an aggravating factor by clear and convincing evidence.” N.C.G.S. § 1D-I5(b) (2007). When punitive damages are sought against a corporation, the claimant must further show that “the officers, directors, or managers of the corporation
The clear and convincing standard requires evidence that “ ‘should fully convince.’ ” In re Will of McCauley,
Plaintiff argues that whether the evidence is clear and convincing is for the jury to decide; and if there is more than a scintilla of evidence from which the jury could infer the existence of the aggravating factor, the determination should be left to the jury. The plain language of the statute, however, does not support this contention in the context of punitive damages.
The statute provides that a trial court in “upholding or disturbing” an award of punitive damages must “address with specificity the evidence, or lack thereof, as it bears on the liability for or the amount of punitive damages, in light of the requirements of this Chapter.” N.C.G.S. § ID-50 (2007) (emphasis added). This language, coupled with that in N.C.G.S. § 1D-I5(b) requiring proof by “clear and convincing evidence,” manifests that the General Assembly intended that the quantum of evidence be more than would be sufficient to uphold liability for the underlying tort and that the trial court have a role in ascertaining whether the evidence presented was sufficient to support a jury’s finding of the factor under the standard established by the legislature. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255,
In light of these principles, we hold that in reviewing a trial court’s ruling on a motion for judgment notwithstanding the verdict on punitive damages, our appellate courts must determine whether the nonmovant produced clear and convincing evidence from which a jury could reasonably find one or more of the statutory aggravating
Having determined the applicable standard of review, we must now determine whether plaintiff presented clear and convincing evidence from which a jury applying that standard could reasonably find that the officers, directors, or managers of defendant Dillard’s participated in or condoned conduct that was (i) malicious or willful or wanton and (ii) was related to the injury for which compensatory damages were awarded.
We initially note that although the dissenting opinion relies on plaintiff’s failure to assign error to the trial court’s findings of fact, defendant does not raise this issue in its new brief to this Court. Normally, when an appellant fails to assign error to findings of fact by the trial court, the findings are binding on the appellate court, Koufman v. Koufman,
We next consider defendant’s contentions that plaintiff failed to present sufficient evidence of willful or wanton conduct or of malice on the part of defendant to support the jury’s award of punitive damages. The General Assembly has defined “willful or wanton conduct” as “the conscious and intentional disregard of and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm. ‘Willful or wanton conduct’ means more than gross negligence.” N.C.G.S. § lD-5(7) (2007).
Plaintiff relies on two cases in support of his contention that defendant’s “superficial and cursory investigation” of the alleged embezzlement evidences “a ‘reckless and wanton disregard of [his] rights’ Jones v. Gwynne,
In Jones this Court determined that the evidence was sufficient for submission to the jury on the issue of punitive damages based on the fact that the investigation conducted by defendant Gwynne, the regional security officer for McDonald’s Corporation, “was conducted ‘in a manner which showed the reckless and wanton disregard of the plaintiff’s rights.’ ” Jones,
In Williams the plaintiff, a part-time employee during the Christmas season, was working in the jewelry department at the defendant department store.
Lynch had the plaintiff transported to the magistrate’s office, where he attempted to have her charged with felonious larceny. Id. The magistrate would only issue a warrant for misdemeanor larceny of two pairs of earrings. Id. The plaintiff was found not guilty of these charges in District Court. Id. On this evidence the Court of Appeals concluded that the jury could find that the plaintiff “was treated rudely and oppressively.” Id. at 320,
Again, in the instant case the evidence is undisputed that plaintiff failed to ring the sale and permitted the customers to leave the store with two pairs of shoes for which payment had not been tendered. The evidence is undisputed that Sergeant Schul presented the results of the investigation to an ADA before obtaining a warrant from the magistrate.
Nevertheless, plaintiff argues that as in Jones and Williams, defendant acted willfully and wantonly in reckless disregard of his rights in its investigation of the incident by failing to inquire into his character and employment records, as well as failing to obtain statements from all possible witnesses, including Betty Jordan, one of the two women who received the shoes. Plaintiff further argues defendant did not divulge exculpatory evidence to the police.
We find these arguments unpersuasive in light of the investigation conducted by Sergeants Wright and Schul before the case was submitted to ADA Proctor. Plaintiff was interviewed by Sergeant Wright, Mr. Hicklin, and Mr. McCluskey the day after the incident and before he was fired. Sergeant Wright took a written statement from
Plaintiff next contends that defendant acted with a conscious and intentional disregard of his rights in procuring his prosecution knowing that it would cause him to lose his full-time job at First Union Bank despite evidence showing that he simply made a mistake in forgetting to charge the women for the shoes. Plaintiff testified that during the meeting the day after the incident occurred, Mr. McCluskey repeatedly accused him of knowing the two women and threatened to “mess up” his job at First Union if he did not tell Dillard’s who the women were. Plaintiff testified that he told Mr. McCluskey that he did not know the women and that he would take a polygraph test to clear his name. At the time of the meeting, Dillard’s was in possession of the piece of paper with the name
While plaintiff’s characterization of Mr. McCluskey’s statements reveals that Mr. McCluskey may have been somewhat intemperate in his interview with plaintiff, interviews such as this one are always stressful. The pertinent question is whether, under the circumstances, Mr. McCluskey’s statements to plaintiff that he was suspected of embezzlement and that if he were charged with embezzlement, it would adversely affect plaintiff’s position at First Union Bank constitutes evidence of reckless disregard for plaintiff’s rights, or whether Mr. McCluskey simply confronted plaintiff with the truth. That being charged with embezzlement would affect a person’s job with a bank is indisputable. The underlying premise of plaintiff’s argument is that Mr. McCluskey acted inappropriately by not merely accepting plaintiff’s explanation that he made a mistake by forgetting to re-ring the sale. Department store managers have an obligation to protect the safety and security of people and property within the store. Common sense dictates that a store manager cannot be precluded from taking investigative measures necessary to fulfill this obligation when confronted with the information Mr. McCluskey had in this instance. Refusing to accept an employee’s explanation and telling an employee the consequences of the situation do not equate with reckless disregard of an employee’s rights.
Plaintiff next argues that he presented sufficient evidence of malice on the part of defendant in procuring his felony prosecution to support the jury’s award of punitive damages. In the context of punitive damages, “[m]alice” is defined as “a sense of personal ill will toward the claimant that activated or incited the defendant to perform the act or undertake the conduct that resulted in harm to the claimant.” N.C.G.S. § lD-5(5) (2007).
Plaintiff argues that malice can be evidenced by his previous reprimand by Mr. McCluskey for referring a customer to another shoe store. Plaintiff testified that at the beginning of his meeting with management the day after the incident, Mr. McCluskey repeatedly said, “I cannot believe you’re [Scarborough] in my office again.” Plaintiff also argues that the prosecution was due to Mr. McCluskey’s belief that plaintiff was so inept that the women were able to dupe him out of the shoes rather than any honest belief that plaintiff had intentionally given away the shoes. These arguments are too speculative and fall well short of constituting clear and convincing evidence from
In conclusion, we hold that the proper standard of review of a trial court’s ruling on a motion for judgment notwithstanding the verdict as to punitive damages is whether the nonmovant produced clear and convincing evidence of one of the statutory aggravating factors for punitive damages.
Inasmuch as we have determined that the evidence in this case is not sufficient to support a jury’s finding of a statutory aggravating factor by clear and convincing evidence, we do not reach the issues of whether the factor “was related to the injury” or whether one of defendant’s “officers, directors, or managers . . . participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.” N.C.G.S. § 1D-I5(c).
For the forgoing reasons, the decision of the Court of Appeals is reversed.
REVERSED.
Dissenting Opinion
dissenting.
The majority conflates the burden of persuasion — the exclusive province of the jury — with the burden of production. In so doing, the majority improperly weighs the evidence and substitutes its own judgment for the jury’s. I therefore respectfully dissent. Because plaintiff presented sufficient evidence to support the jury’s award of punitive damages, the trial court erred in granting defendant’s motion for judgment notwithstanding the verdict.
I. N.C.G.S. § ID-15
Subsections 1D-I5(a) and (b) state that:
(a) Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
*729 (b) The claimant must prove the existence of an aggravating factor by clear and convincing evidence.
N.C.G.S. §§ ID-15 (a),(b) (2007).
To determine the General Assembly’s intent in requiring “clear and convincing” evidence of punitive damages under N.C.G.S. § ID-15 and whether by establishing such burden of proof, the General Assembly intended to alter the trial court’s review of the evidence upon a motion for judgment notwithstanding the verdict, I believe it instructive to closely examine two basic concepts of law: the burden of proof and judgment notwithstanding the verdict.
II. Burden of Proof
The burden of proof in any case includes both the burden of production and the burden of persuasion. Black’s Law Dictionary 209 (8th ed. 2004) [hereinafter Black’s]; see also N.C.G.S. § 8C-1, Rule 301 (2007) (distinguishing between the burden of production and the burden of persuasion); Hunt v. Eure,
The burden of production and the burden of persuasion are distinct concepts. See, e.g., Speas,
“The important practical distinction between these two senses of ‘burden of proof,’ is this: ‘The risk of non[]persuasion operates when the case[s] . . . come into the hands of the jury [] while the duty of producing evidence implies a liability to a ruling [of] the judge disposing of the issue without leaving the question open to the jury’s deliberation[].’ ”
Hunt,
A. Varying Levels of the Burden of Persuasion
The burden of persuasion is “heavier or lighter depending upon the kind of case and the particular issue involved.” Broun § 33; see also Speas,
B. The “Clear and Convincing” Burden of Persuasion
The majority asserts that, as a matter of law, plaintiff failed to present “clear and convincing” evidence in support of his claim for punitive damages. In so concluding, the majority conflates the burden of production with the burden of persuasion. Determining whether a plaintiff has met the burden of persuasion by producing “clear and convincing” evidence is the exclusive province of the fact finder. See, e.g., In re Will of McCauley,
The evidence was sufficient to be submitted to the jury, with the instruction that it must be clear, strong and convincing to warrant a verdict for the plaintiff, but whether it was or was not “strong, clear and convincing” was to be determined by the jury and not by the court; otherwise, the jury would be useless.
“The [j]udge has no more right, when the testimony[,] if believed[,] is sufficient to be submitted to the jury, to determine in the trial of civil actions what is strong, clear and convincing proof[,] tha[n] he has in the trial of a criminal action to express an opinion as to whether guilt has been shown beyond a reasonable doubt.”
Id. (quoting Cobb v. Edwards,
Section ID-15 of the North Carolina General Statutes, like so many statutes, sets forth both the burden of production and the burden of persuasion. To be awarded punitive damages, the plaintiff must meet his burden of production by producing evi
III. Judgment Notwithstanding the Verdict
“A motion for judgment notwithstanding the verdict... is essentially a renewal of an earlier motion for a directed verdict.” Taylor v. Walker,
Contrary to the majority’s assertions, the trial court does not alter its review of the plaintiff’s burden of production upon a motion for judgment notwithstanding the verdict merely because the burden of persuasion is higher or lower in each case. As long as the plaintiff has met his burden of production and the facts in evidence establish a prima facie case, the case belongs with the jury. See, e.g., Millers Mut. Ins. Ass’n v. Atkinson Motors Inc.,
Here, the trial court instructed the jury regarding plaintiff’s “clear and convincing” burden of persuasion on his claim for punitive damages. “This Court presumes that jurors follow the trial court’s instructions.” State v. Cummings,
Taking the case away from the jury, while a duty sometimes unavoidable, is always a delicate task, involving much more than a strong feeling that the plaintiff ought not to recover. The power of the court is limited to the ascertainment whether there is any evidence at all which has probative value in any or all of the facts and circumstances offered in the guise of proof. It is not a matter of passing upon the weight of evidence when it has*734 weight. That power is denied us. It is a matter of dropping the proffered proof into evenly poised balances to see whether it weighs against nothing.
Wall v. Bain, 222 N.C. 375, 378,
TV. Evidence Presented
In the present case, I conclude that plaintiff met his burden of production. Taken in the light most favorable to the nonmovant, the evidence shows that plaintiff, a forty-one year old African-American man, was terminated from his employment as a part-time shoe salesman at Dillard’s after mistakenly allowing two African-American women to leave the store with two pairs of shoes for which they did not pay. When plaintiff realized his mistake, his “hands start[ed] shaking” and he uttered an expletive. Plaintiff immediately reported his mistake to the manager on duty, Steven Gainsboro. Gainsboro took no action to recover the shoes, but merely checked the register tape. Gainsboro believed that plaintiff’s actions were inadvertent rather than intentional. Gainsboro told plaintiff he would speak to his supervisor, shoe department manager David Hicklin, the following day. Although other Dillard’s shoe department employees later observed the two women carrying the bag with the shoes, no steps were taken to approach or apprehend the women.
The next day, plaintiff telephoned Hicklin three times to explain what had happened. When plaintiff finally reached him, Hicklin told plaintiff he didn’t “know what [plaintiff was] talking about” but that they would talk when plaintiff came to work that evening. When plaintiff arrived at Dillard’s that evening, Hicklin summoned him to the manager’s office, where he waited outside for approximately fifteen minutes. Once plaintiff was allowed to enter the office, he was interviewed by Hicklin, store manager Kevin McCluskey, and Officer Cullen Wright of the Mecklenburg Police Department. McCluskey immediately told plaintiff, “I cannot believe you’re in my office again.” McCluskey had formally reprimanded plaintiff the previous week for referring a customer to another store when Dillard’s did not carry the type of shoe the customer desired to purchase.
The “draining]” interview lasted at least two hours, during which the three men repeatedly accused plaintiff of being acquainted with the women and intentionally allowing them to leave with the shoes. McCluskey threatened to charge plaintiff with embezzlement and
V. Punitive Damages Based on Malicious Prosecution
In establishing his malicious prosecution claim, plaintiff here was required to prove that defendant (1) initiated the earlier proceeding, (2) with malice and (3) without probable cause, and (4) that the earlier proceeding terminated in his favor. Jones v. Gwynne,
The majority appears to concede that plaintiff presented evidence of the aggravating factor of malice, but concludes that the evidence falls short of the “clear and convincing” standard required by N.C.G.S. § ID-15. Again, however, whether evidence is clear and convincing is a matter for the trier of fact. The majority’s efforts to rationalize and explain the actions of various persons and events illuminate the difficulty of reviewing a cold record and attempting to assess whether evidence is clear and convincing. For example, the majority characterizes McCluskey’s threat to plaintiff to “mess up” his job at First Union if he did not reveal the names of the women who took the shoes — even though McCluskey possessed the name of one of the women, whom he did not bother to investigate — as “somewhat intemperate” and “simply confronting plaintiff with the truth.” This is indeed one possible inference from the evidence presented. An equally plausible view of the evidence presented is that McCluskey had no intention of conducting a genuine investigation of the incident, that instead, he personally disliked plaintiff and believed him to
In Jones this Court held that the Court of Appeals erred in concluding that the plaintiff’s evidence was insufficient to justify submission of the issue of punitive damages to the jury based on malicious prosecution when there was evidence from which a reasonable juror could conclude that defendant’s investigation of the plaintiff was conducted with reckless and wanton disregard of the plaintiff’s rights.
VI. Conclusion
Taken in the light most favorable to plaintiff, I conclude that plaintiff met his burden of production by presenting evidence from which a reasonable juror could conclude that defendant acted with malice and with reckless and wanton disregard for plaintiff’s rights. Given the various possible interpretations of the evidence, judgment notwithstanding the verdict was improper. Taylor,