The unpredictable world of jury trials

Recent case involving IBM shows courts will defer to juries when it comes to fact-based issues, but will step in if the decision is unreasonable

Stuart Rudner
The recent decision of the Ontario Court of Appeal in Sommerard v. I.B.M. Canada Ltd. confirms that the appellate courts will defer to juries on fact-based issues such as whether or not just cause for dismissal existed or whether an employer acted in bad faith, but will interfere where jury decisions are unreasonable, such as where there is no possible basis for an award of aggravated or punitive damages.

In addition, the court commented on the availability of aggravated or punitive damages in wrongful dismissal claims, and set out parameters for pleadings seeking such damages which counsel should be mindful of in the future.

Facts of the case

Greg Sommerard worked at IBM for close to four years in a technical support position. In early 2001, he went on short-term disability. Those benefits came to an end on March 8, 2001, and he applied for long-term disability benefits. His application was rejected and his subsequent appeal was denied.

Sommerard then advised a representative of IBM that he did not feel he could return to work because he might “thump somebody.” When asked to clarify, he said he would hurt or hit somebody at work. As a result, IBM sent Sommerard a letter in which he was told his employment had been terminated for cause due to his threat to hurt someone if he returned to work.

Sommerard subsequently commenced a wrongful dismissal action against IBM. His counsel argued IBM wanted to dismiss him because he was a difficult employee and it seized on a conversation he had with a nurse as an excuse justifying dismissal. He sought damages in lieu of notice, Wallace damages and punitive/aggravated damages. He also claimed against Great West Life, but that portion of the claim was settled.

The case against IBM was tried by jury. The jury found IBM did not have cause to dismiss Sommerard, and determined nine months was the reasonable notice period. The jury awarded a further four months in Wallace damages, $1,000 for aggravated damages and $22,000 for punitive damages. IBM appealed all aspects of the decision. Sommerard appealed the punitive damages award and the costs award.

The Court of Appeal granted some aspects of the appeal and denied others. Any analysis of the Court of Appeal’s decision must be undertaken bearing in mind the trial was before a jury. As the Court of Appeal explicitly stated in its decision”

“Jury verdicts are not easily disturbed. They are not to be set aside unless they are so plainly unreasonable and unjust that no jury reviewing the evidence as a whole, and acting judicially, could have reached it. In addition, the verdict can be set aside if there was no evidence to support it.”

Just cause for termination

In its argument at the Court of Appeal, IBM did not take issue with the instructions given by the trial judge in relation to cause and conceded that the issue of cause had been properly left with the jury. IBM acknowledged it bore the burden of satisfying the jury that Sommerard had been guilty of misconduct justifying his dismissal without notice. IBM submitted, however, that a jury acting judicially could not have found an absence of cause.

The court accepted IBM’s assertion that it had an obligation to provide its employees with a safe workplace and Sommerard was aware that further aggressive incidents would result in termination. However, the court ultimately deferred to the jury, finding there was evidence before the jury upon which it could conclude that although IBM had legitimate concerns about Sommerard, it acted precipitously in dismissing him.

Notice period

Appellate courts are similarly deferential to the initial decision-maker (judge or jury) when it comes to assessing notice periods. This is not surprising given the subjective nature of these determinations. Reasonable counsel and judges will disagree on the precise amount of notice that is reasonable in almost any set of circumstances.

As long as the decision is in the ballpark, the appellate courts will not interfere. However, an appellate court will overrule an award of damages in lieu of notice when it is plainly unreasonable.

In this case the judge, in her charge to the jury, suggested the range of notice was from three to five months. However, the jury chose to award nine months. The Court of Appeal agreed with the trial judge’s assessment, and found that the jury’s award of nine months was well beyond what is reasonable. They therefore allowed this aspect of the appeal and replaced the award with four months’ notice.

Wallace damages

In its decision, the Court of Appeal set out many reasons why a jury could have found there was no bad faith on the part of IBM:

“Although we are satisfied that it was open to the jury to award Wallace damages, it must be said that IBM was in a difficult position. It had to balance (Sommerard’s) needs and rights against its obligation to provide a safe workplace for all its employees. As (Sommerard) acknowledged, IBM had worked with him in respect of the prior incidents involving his aggressive behaviour. We recognize as well that, out of a concern for (Sommerard’s) difficult financial position, IBM offered the respondent 11 weeks’ pay at the time of termination, even though it believed it had cause for dismissal.

“We note also that, in asking (Sommerard) to sign a release, it followed standard practice. IBM made no suggestion in any documentation that (Sommerard) had committed a criminal act. Finally, it is difficult to know whether and to what extent the difficulties that Mr. Sommerard endured after his dismissal flowed from the fact of termination as opposed to pre-existing difficulties in his personal life, including psychological problems that dated back to his early childhood.”

High threshold for interfering with jury decision

Despite all of this, the Court of Appeal did not interfere with the jury’s decision:

“The threshold for interfering with a jury verdict is high. The jury was entitled to accept (Sommerard’s) evidence that his ‘threat’ was more in the nature of a cry for help, that IBM knew of his illness (albeit not in detail) and that the manner of termination was unduly insensitive in light of his financial and emotional vulnerability.

Once the decision is made to award Wallace damages, the next question is how much to award. In this case, the jury awarded an additional four months. The wording of the decision suggests that they would not have awarded as much as the jury did, but ultimately they did not disturb that aspect of the decision. According to the court:

“In the circumstances, while we are of the view that an additional four months’ notice is very generous, we see no basis on which to interfere with the jury award.”

Aggravated and punitive damages

Recently, there seems to have been an increase in the number of cases where plaintiffs have been awarded both Wallace damages and punitive damages. In the case of Keays v. Honda Canada, which is currently under appeal, those damages were dramatic - including $500,000 in punitive damages.

In this case, the jury awarded the respondent $1,000 for aggravated damages and $22,000 for punitive damages. In reviewing this element of the jury’s decision, the Court of Appeal confirmed that in wrongful dismissal actions, aggravated and punitive damages can only be awarded where the employee is able to establish that the employer engaged in an independent actionable wrong that was separate from the breach of contract.

IBM submitted, and the Court of Appeal agreed, that based upon the evidence, the tort of intentional infliction of mental distress was the only possible independent actionable wrong that the jury could have relied upon in awarding aggravated or punitive damages. In her charge to the jury, the trial judge correctly reviewed the elements of that tort. As set out by the Court of Appeal:

“The jury was specifically asked whether the conduct of IBM justified an award of damages for it; they answered ‘no.’ Unfortunately, the jury was not told that a negative response to (that) question meant that the respondent’s claim for aggravated and punitive damages must fail.”

As a result, the awards of aggravated and punitive damages were not upheld.

Pleadings

The Court of Appeal went on to comment on how the problem with the award of aggravated and punitive damages in this case could be avoided in the future:

“Plaintiffs who seek aggravated and/or punitive damages should particularize, in their pleadings, the independent actionable wrong or wrongs upon which they are relying and the material facts in support of them. They should do the same in relation to the conduct they seek to portray as ‘harsh, vindictive, reprehensible, malicious’ and the like.

In addition, trial judges should, after considering the pleadings, instruct the jury in the charge on the possible independent actionable wrongs and how to determine whether they have been made out. In our view, it would be advisable for trial judges to explicitly canvas with counsel, prior to the charge and before counsel address the jury, their respective positions on these matters.”

Counsel for employees should be mindful of this passage when drafting statements of claim in the future. Based upon this decision, it will no longer be sufficient to include bald allegations of independent actionable wrongs or harsh, vindictive and malicious behaviour. Similarly, counsel for employers should consider seeking particulars where pleadings do not meet the level of particularity suggested by the Court of Appeal.

Perhaps this will allow defence counsel to know, at an early stage, whether aggravated and punitive damages are legitimately sought or whether they were simply included as part of a boilerplate pleading.

For more information see:

Sommerard v. I.B.M. Canada Ltd., 2006 CarswellOnt 1899 (Ont. C.A.)

Stuart Rudner practices commercial litigation and employment law with Miller Thomson LLP’s Toronto office. He can be reached at (416) 595-8672 or by e-mail at [email protected].

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