Plaintiff Louis Kestenbaum was awarded damages for breach of
an employment contract. The trial was had before a jury which found by special
verdict that the employment was not terminable at will, but rather was subject
to an implied contract requiring a good reason for termination, and that there
was no good reason to discharge Kestenbaum. We affirm.
Kestenbaum was employed in March of 1977 by defendants
Pennzoil Company and its subsidiary, Vermejo Park Corporation, as the vice
president in charge of guest operations at a secluded ranch in northern New
Mexico. The ranch maintains guest facilities and services for lodging, hunting,
fishing, and other recreational activities.
By anonymous letter in January of 1984, Kestenbaum was
accused of sexual harassment, illegal conduct, and mismanagement of the ranch.
Pennzoil initiated an investigation *282 in which information was gathered
through interviews of Vermejo Park female employees, past and present.
Subsequently, the investigators presented to Pennzoil officials an oral
briefing and a written report that summarized the evidence. On February 13,
1984, Pennzoil summoned Kestenbaum to its headquarters in Houston where he met
with the investigators who confronted him with the allegations concerning
sexual harassment, which he denied. Thereafter, Pennzoil officials informed
Kestenbaum of the names of the persons interviewed and he was given the
opportunity to comment about each. Pennzoil also permitted Kestenbaum to name
witnesses who would speak on his behalf. Kestenbaum met one more time with Pennzoil
vice-president Rundle and again denied the allegations, but to no avail. On
February 17, Kestenbaum's employment was terminated.
Kestenbaum claimed that, without fair investigation and
consideration of the allegations and his response, he was terminated on the
grounds of sexual harassment for which he was innocent. Pennzoil denied
Kestenbaum's claim and affirmatively asserted that Kestenbaum was an employee
at will and was dischargeable for any or no reason. Alternatively, if a good
reason was required to discharge Kestenbaum, Pennzoil asserted that it had
reasonable grounds to believe that sufficient cause existed to justify its
actions.
By Instruction No. 8, the jury was instructed on
Kestenbaum's claim that, by words and conduct, the parties entered into an
employment contract which included among its terms that (1) in addition to a
salary for Kestenbaum's labor and best job efforts, he would receive various
fringe benefits, including but not limited to a retirement program, a stock
purchase program, and health and other insurance; (2) the employment would be
of a long-term nature, but subject to the normal contingencies of work life,
such as a sale of the ranch, early voluntary retirement, layoffs and so on; and
(3) with regard to involuntary termination of employment, Kestenbaum would be
terminated only for just cause or, in other words, for a good reason, he would
be treated fairly, have the opportunity to know some specifics of the charges
against him, be given a chance to defend himself, and his supervisors would not
determine whether there was just cause for the termination until hearing and
fairly considering Kestenbaum's side of the story. Whether these claimed terms
and conditions applied to the employment contract was left for the jury to determine
on disputed evidence.
Without objection, the court instructed the jury on the
applicable law of employment contracts, as follows:
INSTRUCTION No. 9 An implied contract is an agreement in
which the parties, by a course of conduct, have shown an intention to be bound
by such agreement. INSTRUCTION No. 10 Under New Mexico law, the general rule is
that a contract for permanent employment, calling only for the performance of
duties and payment of wages, is a contract for an indefinite period. It is
terminable at the will of either party. A discharge without reason is not a
breach of such an at will employment. INSTRUCTION No. 11 In every contract the
law implies a covenant of good faith and fair dealing between the parties ...
The implied covenant of good faith and fair dealing, however, is not to be used
by you in determining whether or not there was a term of an implied contract
calling for discharge for just cause only. You must first find from the words
and conduct of the parties that they intended that the plaintiff's discharge
would be made for just cause only. If you find that there was an implied
contract of employment between the parties which included a good-reason
standard for termination, then the implied covenant of good faith and fair
dealing *283 requires in the traditional sense a moral quality equated with
honesty of purpose, freedom from fraudulent intent and faithfulness to duty or
obligation.
The jury also was instructed that, for purposes of guidance,
it could properly resort to Equal Employment Opportunity Commission guidelines
that define what constitutes sexual harassment under the "totality of the
circumstances" rule. The guidelines describe the strict responsibility of
an employer for the acts of its supervisory employees with respect to sexual
harassment and state that an employer should develop appropriate sanctions and
take all steps necessary to prevent sexual harassment. The court further
instructed the jury that sexual harassment by a supervisor is a violation of
law and that, where an employer receives allegations of conduct that could
amount to sexual harassment, the employer has a legal duty and obligation to investigate
and promptly take appropriate remedial action. Finally, the court instructed
that evidence in a case involving sexual harassment is typically contradictory.
Nonetheless, the employer still has the duty to take action to prevent sexual
harassment.
We address the following issues raised by Pennzoil in this
appeal: (1) Whether the claim for breach of an implied employment contract was
barred by the statute of frauds? (2) Whether there was substantial evidence to
support the jury's finding of an implied employment contract requiring a good
reason for termination? (3) Whether the law applied by the court unduly
restricted Pennzoil's showing that there was a good reason for the discharge?
(4) In terminating employment for good reason, what is the standard for judging
the conduct of the employer? (5) Whether the court committed reversible error
in refusing to instruct specifically on asserted defense theories as requested
by Pennzoil? (6) Whether Pennzoil was entitled to a new trial by reason of
inflammatory closing arguments, by reason of the receipt of evidence germane to
claims dismissed on directed verdicts, but irrelevant and immaterial to the
claims finally submitted, or by reason of a verdict contrary to the weight of
the evidence?
Statute of Frauds. Pennzoil contends that the trial court
erred in denying its motion for directed verdict on the breach of contract
claim. Pennzoil asserts that, because the action was based on an oral
employment contract that could not be performed within one year, the action was
barred by the statute of frauds. See Skarda v. Skarda, 87 N.M. 497, 501, 536
P.2d 257, 261 (1975). At the least, Pennzoil argues, the court erred in keeping
the issue from the jury. Pennzoil maintains that an agreement for employment
until Kestenbaum's retirement would have been for a specific term more than one
year, rather than for life or for an indefinite period. Pennzoil concedes that
the statute of frauds does not apply to a contract under the latter
circumstances. See Hodge v. Evans Fin. Corp., 823 F.2d 559, 561-65 (D.C.
Cir.1987). Nor does it apply to a contract for employment until retirement.
There is no indication in local law or elsewhere that a
permanent employment contract should be construed as a contract for an
expressly stated, fixed term of years by virtue of an employee's expectation
that he or she will retire at some point. No court or commentator has ever
suggested that the possibility of the employee's death within one year would
"defeat" rather than "complete" such a contract. To the
contrary, courts and commentators have consistently accepted the view that
indefinite permanent employment contracts such as Hodge's fall outside the
statute because they are capable of full performance within one year. See,
e.g., 2 Corbin on Contracts § 446, at 549-50 (Permanent employment contracts
fall outside the statute because "[t]he word `permanent' has, in this
connection, no more extended meaning than `for life.'"); 3 Williston on
Contracts § 495, at 582 ("A promise of permanent personal performance is
on a fair interpretation a promise of performance for life, and therefore not
within the Statute.").
*284 823 F.2d at 564 (footnote omitted). As with Hodge,
Kestenbaum unequivocably alleged a contract for permanent employment, not a
contract until he reached a specified age of retirement.
Further, Pennzoil bore the burden of pleading and proving
the affirmative defense of the statute of frauds. See SCRA 1986, 1-008(C). As a
general rule, determination of the applicability of the defense of the statute
of frauds is a question of law for the court, not the jury. Sanchez v.
Martinez, 99 N.M. 66, 653 P.2d 897 (Ct.App. 1982). However, a factual question
concerning the particulars of a contract may prevent a ruling on the statute's
applicability as a matter of law. Sierra Blanca Sales Co. v. Newco Indus.,
Inc., 84 N.M. 524, 505 P.2d 867 (Ct.App.), cert. denied, 84 N.M. 512, 505 P.2d
855 (1972). That is not the case here. Pennzoil presented no affirmative
evidence on the issue, and Kestenbaum's evidence established that his
employment contract was indefinite in duration.
Substantial Evidence to Support Jury Finding of Implied
Employment Contract Allowing Discharge Only for Good Reason. Seeking support in
Gonzales v. United Southwest Nat'l Bank, 93 N.M. 522, 602 P.2d 619 (1979), and
Garza v. United Child Care, Inc., 88 N.M. 30, 536 P.2d 1086 (Ct.App.1975),
Pennzoil argues that, because Kestenbaum's oral employment agreement was for an
indefinite period, he was an employee at will, dischargeable for any or no
reason. Although Pennzoil recognizes an exception to at-will employment exists
for an implied contract term based on the words and conduct of the parties, it
maintains that, in New Mexico, this exception has been based only upon
provisions included in an employee handbook or personnel manual. See Forrester
v. Parker, 93 N.M. 781, 606 P.2d 191 (1980); Francis v. Memorial Gen. Hosp.,
104 N.M. 698, 726 P.2d 852 (1986). Even where a policy manual exists it will
not always change the at-will employment relationship if the manual is not
sufficiently specific. Sanchez v. The New Mexican, 106 N.M. 76, 738 P.2d 1321
(1987); cf. Lukoski v. Sandia Indian Management Co., 106 N.M. 664, 748 P.2d 507
(1988) (where handbook represented an established policy regarding terminations
and failed to alert employees against placing reliance upon it, policy properly
could be found part of employment agreement).
Several jurisdictions quite properly have been willing to
impose implied contractual duties based upon particular representations or
conduct of an employer, without limitation to handbooks or manuals. These
courts recognize that oral statements made by an employer may be sufficient to
create an implied contract which provides that an employee shall not be
discharged except for cause. We agree. See, e.g., Toussaint v. Blue Cross &
Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980); Pugh v. See's Candies, Inc.,
116 Cal. App. 3d 311, 327, 171 Cal. Rptr. 917, 925-26 (1981) ("In
determining whether there exists an implied-in-fact promise ... courts have
considered ... personnel policies or practices of the employer ... [and]
actions or communications by the employer reflecting assurances of continued
employment... ." (footnotes omitted)). Other courts that have restricted
the right to freely discharge at-will employees because of an employment policy
or procedure recognize the traditional at-will rule to be a rebuttable
presumption. See, e.g., Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 466, 443
N.E.2d 441, 446, 457 N.Y.S.2d 193, 198 (1982) (at-will rule affords no greater
status than that of a rebuttable presumption and trier of fact should consider
course of conduct of the parties, including the writings and antecedent
negotiations); Leikvold v. Valley View Community Hosp., 141 Ariz. 544, 688 P.2d
170 (1984) (en banc).
In the consolidated cases of Toussaint and Ebling, two
employees, one employed for five years and the other for two years, brought
wrongful discharge actions against their respective former employers. Toussaint
received an oral assurance that "he would be with the company `as long as
I did my job,'" and Ebling "was told that if he was `doing the job'
he would not be discharged." Each employee asserted that the statements
made by the employer constituted *285 an agreement not to discharge except for
good cause. 408 Mich. at 597, 292 N.W.2d at 884. The employers argued, as does
Pennzoil, that employment contracts for an indefinite term are terminable at
the will of either party unless the employee has furnished consideration
independent of his services to his employer.
Toussaint's case was strengthened because upon being hired
he was handed a personnel manual that reinforced the oral assurance of job
security. The court, however, did not rest its decision on the presence of the
personnel manual. It ruled that (1) a provision of an employment contract
providing that an employee shall not be discharged except for cause is legally
enforceable although the contract is not for a definite term, and (2) such a
provision may become part of the contract either by express agreement, oral or
written, or as a result of an employee's legitimate expectations grounded in an
employer's policy statements. The court further held that "[e]mployers are
most assuredly free to enter into employment contracts terminable at will
without assigning cause. We hold only that an employer's express agreement to
terminate only for cause, or statements of company policy and procedure to that
effect, can give rise to rights enforceable in contract." 408 Mich. at
610, 292 N.W.2d at 890. The court concluded that when a prospective employee
inquires about job security and the employer agrees that the employee shall be
employed so long as he does the job, a fair construction is that the employer
has agreed to give up his right to discharge at will and may discharge only for
"good or just cause." Id.
Pennzoil claims that the evidence presented by Kestenbaum
was insufficient as a matter of law to establish an implied contract that
required a good reason to terminate the employment relationship. We believe,
however, that the evidence was sufficient to overcome the presumption that the
employment contract was terminable at will. There was substantial evidence from
which a jury reasonably could find that the parties agreed to a contract that
permitted termination only for a good reason.
Kestenbaum presented the following evidence to establish
that his employment contract was for an indefinite period of time, and allowed
involuntary removal only for a good reason. During initial employment
negotiations, Kestenbaum's immediate supervisor at Vermejo Park made clear that
the employment would be long term and permanent as long as Kestenbaum did his
job. This was uncontroverted. Further, Kestenbaum testified that those
assurances were consistent with his needs for long-term job security and the
fact that he would not have considered the job if offered only on a short-term
basis.
Mr. Wolfe, former operations manager at Vermejo Park,
testified that Pennzoil only released permanent employees for "a good
reason, a just cause." Mr. Lew, an investigator, stated that he presumed
that Pennzoil only terminated employees for just cause. Vice-president Rundle
confirmed this policy, as did Mr. Charlesworth, Kestenbaum's successor supervisor,
who testified that Pennzoil believed it had to "have a good reason to
terminate an employee" and that the Houston office always required good
cause. Pennzoil presented no evidence that it maintained a
"fire-at-will" management practice.
The insurance benefits manual and the policy manual also
provided additional evidence regarding Pennzoil's policy and practice to forego
its common-law right to fire at will. The insurance benefits manual contained a
provision describing conversion privileges after termination of employment. The
manual made no mention of a termination without cause. Neither did the
severance pay plan in the policy manual address the effect of a without-cause
termination of employment.
Pennzoil attempts to refute the sufficiency of the evidence
by attacking each element individually. First, Pennzoil maintains that an
implied employment contract altering the at-will presumption cannot be premised
upon Kestenbaum's subjective understanding about statements made at the
inception of the employment relationship. *286 See Thompson v. St. Regis Paper
Co., 102 Wash. 2d 219, 685 P.2d 1081 (1984) (en banc). Pennzoil further asserts
that the insurance benefits policy and severance pay plan are insufficient to
create an implied contract because neither specifically altered the at-will
relationship. Finally, Pennzoil contends that management practice has never
been recognized in New Mexico as a sufficient basis from which to imply an
employment contract allowing discharge for cause only.
We are unwilling to test the sufficiency of each piece of
evidence standing on its own in a vacuum and rule, as a matter of law, that
each alone fails to support a finding of an implied employment contract. In
overcoming the presumption, it is not any single act, phrase or expression, but
the totality of all of these, given the circumstances and the parties'
situation and objectives, which will control. Weiner, 57 N.Y.2d at 466-67, 443
N.E.2d at 446, 457 N.Y.S.2d at 198; Pugh, 116 Cal. App. 3d at 329, 171 Cal.
Rptr. at 927 ("While oblique language will not, standing alone, be
sufficient to establish agreement ... it is appropriate to consider the
totality of the parties' relationship... ." (citation omitted)).
Undoubtedly, under Sanchez v. The New Mexican, the policy statements addressing
insurance benefits and severance pay would, without more, be inadequate to
alter the at-will relationship. However, when coupled with uncontroverted
testimony describing the negotiations between Kestenbaum and Pennzoil's agent
and with Pennzoil's concession that there was a management practice followed by
Pennzoil not to terminate employment except for a good reason, there is
substantial evidence to support the jury finding that an implied employment
provision for discharge only for a good reason was in effect between Pennzoil
and Kestenbaum.
Law Applied as to Good Reason for Discharge. Pennzoil argues
that good reason for discharge existed as a matter of law and contends that the
jury was misinstructed on applicable rules of implied contract. In reviewing
alleged errors relating to jury instructions, this Court will consider whether
all of the instructions, when read and considered together, fairly present the
issues and the law applicable thereto. Webb v. Webb, 87 N.M. 353, 533 P.2d 586
(1975). We recognize that the Uniform Jury Instructions contemplate that
instructions should be concise and should not comment on the evidence. See SCRA
1986, Judicial Pamp. 13 The Concept of Jury Instructions; Kinney v. Luther, 97
N.M. 475, 641 P.2d 506 (1982).
The first instruction we address that was objected to by
Pennzoil is Instruction No. 12, which read as follows:
INSTRUCTION No. 12 Where the terms of an implied contract of
employment between the parties include provision for the employer to give the
employee a chance to defend himself and to have some specifics of the charge,
then you are instructed that the reasons given by the employer at the time of
termination are the only reasons that the defendants may rely upon to show
there was a good reason for the plaintiff's discharge.
Pennzoil objected to and appeals from the court's refusal to
instruct to the contrary that, in an action for wrongful discharge, the
employer may claim in defense any sufficient cause for terminating the
employment. Pennzoil's requested instruction was based upon the law in Kiker v.
Bank Sav. Life Ins. Co., 37 N.M. 346, 23 P.2d 366 (1933), and provided that,
"in an action for wrongful discharge, the employer may claim in defense
any sufficient cause for terminating the employment, (i) even if it may have
been unknown to him at the time of termination, (ii) even if his real reason or
motive may have been something else, or (iii) even if another reason was
expreslly [sic] given." However, the language quoted from Kiker does not
purport to apply to the circumstances of this case. Here, if the jury were to
find that the employment contract required Pennzoil to give Kestenbaum notice
of specifics of the charge, and a chance for him to defend, indeed, the reasons
given by Pennzoil to Kestenbaum are the only reasons that it *287 could rely
upon. Where parties stipulate that the employer will terminate by notice
specifying cause, "a discharge specifying no cause, or an insufficient cause,
would be wrongful. It follows that, under such a contract, a cause not
specified would not be available in defense." Id. at 349, 23 P.2d at 368.
In the present case, no issue was raised contesting the right to notice and a
hearing if the employment were not found to be at will. The trial court was
correct to refuse Pennzoil's requested instruction.
Pennzoil's next contention is that the court erred in
refusing its requested instruction that any finding of illegal conduct on the
part of an employee is good cause for discharge. Pennzoil maintains that its
requested instruction was necessary to inform the jury of the possible
consequences of Kestenbaum's alleged illegal conduct in connection with the
service and consumption of alcoholic beverages by minors. The record indicates
that the requested instruction was a proper subject for argument but a
misstatement of the law as applied to these facts. Pennzoil presented evidence
at trial that Kestenbaum permitted minors to serve and to consume alcohol.
Evidence also was presented that this practice existed prior to Kestenbaum's
management of Vermejo Park and continued after his termination. Moreover,
Kestenbaum's superiors were aware that under-age waitresses served alcohol to
the guests, and expressed no concern. Given this evidence, the jury could have
found that Kestenbaum's conduct was in the furtherance of the interests of the
corporation and authorized by corporate superiors. The trial court properly
concluded that the jury could in one context find that illegal conduct in
performance of the job is good reason for firing, and in another context find
it is not. It would have been error for the court to compel the jury to find
that, under these circumstances, this conduct represented a good reason for
discharge.
Standard for Judging Conduct of Employer in Terminating
Employment for a Good Reason. Pennzoil objected to and appeals from the court's
refusal to instruct that, where an employee is terminated for a good reason,
the employer does not have to prove that the reason in fact existed. Pennzoil
argues that the employer need only in good faith believe that the employee
engaged in conduct that was inappropriate in the work place. See Simpson v.
Western Graphics Corp., 293 Or. 96, 643 P.2d 1276 (1982) (en banc) (absent
evidence of express or implied agreement whereby employer contracted away its
fact-finding prerogative, in discharge for good cause, there need only be
substantial evidence to support employer's decision and that employer believed
evidence and acted in good faith). Pennzoil contends that its requested
Instruction No. 15 was essential to inform the jury of the employer's position
at the time of Kestenbaum's discharge. Unless a jury is instructed that an
employer only is required to demonstrate a good faith belief that cause existed
to terminate, Pennzoil seems to suggest that the only alternative is to
instruct the jury that the employer must prove good cause in fact.
Pennzoil maintains that to require an employer to have a
preponderance of evidence establishing good cause in fact prior to making a
decision to terminate an employee would place an unrealistic burden on the
employer. Pennzoil points out that an employer does not have the benefit of
extended discovery but must base his decision on information available at the
time of discharge.
We agree, but we do not perceive the issue in the bipolar
manner fashioned by Pennzoil. We believe that a middle position exists under
these circumstances, and, further, that the jury properly was instructed on this
middle position. The issue upon which the jury was instructed was whether
Pennzoil "had reasonable grounds to believe that sufficient cause existed
to justify the defendants' actions in discharging the plaintiff."
Accordingly, the jury could have absolved Pennzoil of liability under its
implied contract with Kestenbaum provided that Pennzoil had reasonable grounds
to believe that sufficient cause existed to justify his termination. See Crimm
v. Missouri Pac. R.R., 750 F.2d 703, 713 (8th Cir.1984) (under Title *288 VII,
employer need not prove that employee committed sexual harassment, employer
only needs a reasonable belief that sexual harassment occurred). The trial
court correctly denied Pennzoil's requested Instruction No. 15 because it
erroneously suggested the jury could find good cause from the employer's
subjective good faith belief as opposed to an objective standard of reasonable
belief.
Furthermore, there was substantial evidence to support the
jury finding that Pennzoil did not act upon reasonable grounds. In her
deposition, Pennzoil's investigator admitted on cross-examination that her
summary was not intended to stand alone, that it failed to differentiate
between first-hand knowledge, attributed hearsay, or mere gossip or rumor, and
no attempt was made to evaluate the credibility of the persons interviewed.
Nevertheless, the only document reviewed by vice-president Rundle before he
fired Kestenbaum was his investigator's summary of interviews. Moreover, he did
not take a close look at the way the investigation had been handled, but relied
upon the professionalism of his investigators. At trial, Kestenbaum presented
an expert who testified that Pennzoil's investigators did not observe the
standards of good investigative practice and who identified numerous
deficiencies in the investigation.
Pennzoil claims further that the court erred in refusing to
instruct the jury on "wide latitude" and "great scope" as
standards for judging an employer's conduct when dealing with managerial
employees. Pennzoil asserts Instruction No. 12 severely limited the potential
conduct of the employer. Pennzoil argues that an instruction on "wide
latitude" and "great scope," like Pennzoil's requested
instruction concerning good faith belief, was necessary to inform the jury of
the employer's position when determining the existence of good cause. We hold,
however, that the trial court properly exercised its discretion in refusing the
instruction because it did not supply any needed guidance to the jury. The
requested instruction was properly the subject of argument for counsel. See
SCRA 1986, 1-051.
Refusal to Instruct on Asserted Defense Theories as
Requested by Pennzoil. Pennzoil challenges the court's refusal of its requested
Instruction No. 100, or alternatively, No. 101, and claims the court erred in
giving Instruction No. 8 instead. Pennzoil maintains that Instruction No. 8 was
prejudicial in that it allegedly permitted Kestenbaum to present a statement of
his case, while denying Pennzoil the opportunity to state its theory of the
case. Instruction No. 8 explained the burdens of proof and the contentions of
the parties in conformity with SCRA 1986, 13-302B. The portion of Pennzoil's
requested instructions excluded from Instruction No. 8 were statements
asserting that (1) the defendants had an obligation to investigate the charges
of sexual harassment and to take appropriate and remedial action, (2) the
investigation by Pennzoil was more thorough and was conducted by more
experienced investigators than is normal in a personnel investigation, (3) the
investigation revealed conduct inappropriate for the workplace which would
constitute sexual harassment, and (4) Pennzoil's presentation of the charges
against Kestenbaum were in sufficient detail so that he could understand them
and he was given adequate opportunity to defend himself. We agree with the
trial court that these statements simply constituted denials of the claims
articulated by Kestenbaum. The trial court acted within its discretion in
ruling that the statement, "[t]he defendants deny the contentions of the
plaintiff", was sufficient and it was unnecessary to incorporate
Pennzoil's requested instructions into the format of SCRA 1986, 13-302C. It is
not error to deny requested instructions where the court gave instructions that
adequately covered the issue. Hudson v. Otero, 80 N.M. 668, 459 P.2d 830
(1969). Early in this opinion we discussed the detailed instruction by which
the jury was guided on the employer's required response to charges of sexual
harassment.
The record indicates that Pennzoil had ample opportunity to
express its affirmative *289 theories which were clearly stated in Instruction
No. 8. We hold, therefore, that the instructions as given did not deprive
Pennzoil of an opportunity to fairly state its theory of the case. Based upon
our review of the instructions as a whole, we find that no prejudice resulted
to Pennzoil.
Refusal to Grant Pennzoil's Motion for New Trial. The
granting of a new trial is discretionary with the trial court. State ex rel.
State Highway Dep't v. Robinson, 84 N.M. 628, 506 P.2d 785 (1973). Refusal to
grant a new trial will only be reversed where it is found to be an abuse of
discretion. Id.
Pennzoil first claims that several remarks during
Kestenbaum's closing argument were inflammatory, misleading, and prejudicial.
Specifically, Pennzoil refers to remarks made that referred to (1) Pennzoil's
relation to the local community, (2) the court's grant of Pennzoil's motion for
directed verdict on only six of the eight claims brought by Kestenbaum, and (3)
the non-appearance of some of Pennzoil's witnesses. During Kestenbaum's
closing, Pennzoil failed to raise any objection. "[A]ny objections to the argument
of counsel should be made in time for the court to rule on them, and, if
necessary, to correct them before the jury retires... ." Jackson v.
Southwestern Pub. Serv. Co., 66 N.M. 458, 474, 349 P.2d 1029, 1039 (1960). This
Court has recognized that in the proper case improper remarks made by counsel
could necessitate reversal and award of a new trial, notwithstanding a failure
to object. Griego v. Conwell, 54 N.M. 287, 222 P.2d 606 (1950). Pennzoil,
however, had the burden to demonstrate to the trial court that its rights were
prejudiced because the argument was improper and because the remarks were
"reasonably calculated to cause and probably did cause the rendition of an
improper judgment in the case." Apodaca v. United States Fidelity and
Guar. Co., 78 N.M. 501, 502, 433 P.2d 86, 87 (1967) (quoting Aultman v. Dallas
Ry. & Terminal Co., 152 Tex. 509, 516, 260 S.W.2d 596, 600 (1953)). It was
within the sound discretion of the trial court to conclude that Pennzoil failed
to meet its requisite burden. In its order denying Pennzoil's motion for a new
trial, the court opined that had Pennzoil timely objected a curative
instruction could have been conveyed to the jury. Our review of Kestenbaum's
closing argument supports the reasonableness of the trial court's conclusion
that any alleged prejudicial effect of the improper remarks could have been
cured by proper instruction. See Jackson, 66 N.M. at 474, 349 P.2d at 1039 (any
objections to counsel's argument should be timely made, unless they are of such
serious nature that a cautionary instruction would not cure the error).
Pennzoil also complains that relevant evidence admitted at
trial caused prejudice to its case, in light of the fact that the court
ultimately granted Pennzoil's motion for directed verdict on these issues.
Pennzoil contends that, because evidence subsequently rendered irrelevant
infected the record, it was deprived of a fair trial and, therefore, was
entitled to a new one. Pennzoil relies upon (1) testimony regarding Pennzoil's
subsequent treatment of certain Vermejo Park employees who were deposed by
Kestenbaum and provided testimony unfavorable to Pennzoil's interest and (2)
evidence regarding the value of land donated to the United States by Pennzoil
and witness testimony which opined that the valuations were excessive and
adverse to taxpayers' interests. The transcript references cited by Pennzoil
fail to demonstrate evidence sufficiently prejudicial to support a finding that
the trial court abused its discretion. Nothing pointed out by Pennzoil
convinces us that the trial court acted unreasonably in determining that
Pennzoil received a fair trial and was not entitled to a new one. See
Paternoster v. La Cuesta Cabinets, Inc., 101 N.M. 773, 689 P.2d 289 (Ct.App.
1984) (abuse of discretion occurs when action taken is arbitrary and capricious
or in excess of the bounds of reason).
Pennzoil's remaining claim, that the verdict is contrary to
the weight of the evidence, is without merit. We have demonstrated earlier in
this opinion that substantial evidence existed to support the jury's *290
decision. The trial court properly denied Pennzoil's motion for new trial. The
appraisal of prejudice, if any, and the appraisal of the clear weight of the
evidence are most appropriately left to the discretion of the court that
observed the trial, heard the complaints and arguments of the movant, and,
fortified with the necessary personal judgment and professional skills, passed
upon the merits of the motion for a new trial.
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