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Cruz v. English Nanny & Governess School Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

June 8, 2017


         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-11-768767

          ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES John F. Hill Melinda Smith Yeargin Buckingham, Doolittle & Burroughs, William D. Edwards Paul R. Harris Alyson Terrell Ulmer & Berne, L.L.P., Corey Noel Thrush

          ATTORNEYS FOR APPELLEES/CROSS-APPELLANTS Peter G. Pattakos Subodh Chandra Sandhya Gupta Patrick Haney Chandra Law Firm, L.L.C.



          ATTORNEYS FOR FIRST AMENDMENT LAWYERS ASSOCIATION J. Michael Murray Steven D. Shafron Bergman, Gordon, Murray & DeVan

          BEFORE: Keough, A.J., Blackmon, J., and Laster Mays, J.



         {¶1} Defendants-appellants/cross-appellees, English Nanny & Governess School ("the School"), English Nannies, Inc., d.b.a. English Nannies & Governess, Inc., ("the Placement Agency"), Sheilagh Roth ("Roth"), and Bradford Gaylord ("Gaylord") (collectively "defendants" or "English Nanny"), appeal the trial court's decision denying their motion for directed verdict and judgment notwithstanding the verdict on plaintiff-appellee/cross-appellant, Christina Cruz's ("Cruz"), claim for intentional infliction of emotional distress, and plaintiff-appellee/cross-appellant, Heidi Kaiser's ("Kaiser"), claim for wrongful discharge.

         {¶2} Cruz appeals the trial court's decision granting defendants' motion for remittitur on her claim for intentional infliction of emotional distress. Cruz and Kaiser collectively appeal the trial court's decision reducing their attorney fee award. Finally, cross-appellant, attorney Peter Pattakos, appeals the trial court's decision imposing sanctions against him.

         {¶3} For the reasons that follow, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

         I. Procedural History

         {¶4} The case arises from the relationship between Cruz and the defendants, and the demise of that relationship upon Cruz's decision to report an allegation of child abuse. Cruz believed that the defendants were not supportive of her decision to report the alleged abuse, and the defendants believed that Cruz's allegations were not well-founded. Cruz believed that she was blackballed from being placed as a nanny after she decided to report the abuse, and Kaiser believed she was wrongfully terminated from English Nanny for not participating in the alleged cover-up of the child abuse report and for disclosing information to Cruz regarding the defendants' skepticism about Cruz's allegations.

         {¶5} In November 2011, Cruz and Kaiser (collectively "the plaintiffs") filed a complaint against the English Nanny defendants, Bradford Holdings, and C.F.H. Ltd. In the complaint, Cruz brought causes of action for wrongful termination against public policy, defamation, negligent and intentional infliction of emotional distress, and breach of contract. Kaiser raised causes of action for wrongful termination against public policy and defamation. Defendants denied these claims and asserted a breach of contract counterclaim against Cruz.

         {¶6} In March 2012, the trial court granted, in part, English Nanny's motion for partial judgment on the pleadings by dismissing the case against Bradford Holdings and C.F.H. Ltd. The court also dismissed Cruz's claims for wrongful termination in violation of public policy and negligent infliction of emotional distress.

         {¶7} In October 2013, the trial court granted summary judgment in favor of Gaylord on Cruz's claims for defamation, intentional infliction of emotional distress, and breach of contract, and on Kaiser's claims of wrongful termination in violation of public policy and defamation. The trial court also granted summary judgment in favor of Roth on Cruz's claims for breach of contract, defamation, and intentional infliction of emotional distress, and on Kaiser's claim for wrongful termination. The trial court granted summary judgment in favor of the School and the Placement Agency on Cruz's claims for defamation, breach of contract based on breach of the retail installment contract, and intentional infliction of emotional distress.

         {¶8} In January 2014, Cruz moved for reconsideration of the trial court's decision granting summary judgment on her claim for intentional infliction of emotional distress. The request for reconsideration was based on the production of placement files that English Nanny produced after the trial court granted Cruz's motion to compel discovery. The trial court found that Cruz's introduction of this newly produced discoverable evidence was sufficient to withstand summary judgment on Cruz's intentional infliction of emotional distress claim.

         {¶9} Accordingly, the causes of action left for trial were: Cruz's claims against the remaining English Nanny defendants for intentional infliction of emotional distress, and her claim against the School and Placement Agency for breach of contract based on the exclusive placement agreement; and Kaiser's claim for wrongful termination in violation of public policy against the School and the Placement Agency, and her claims for defamation against the School, the Placement Agency, and Roth.[1] Additionally, English Nanny's counterclaim against Cruz for breach of contract remained.

          {¶10} On March 31, 2015, jury selection began for trial. At the end of voir dire, counsel for English Nanny commented that an article about the case had been published by Scene Magazine and was accessible on the internet. Before opening statements on April 2, 2015, discussion occurred about the article in Scene Magazine. The periodical containing the article was available on the internet and print copies were available free of charge in the courthouse and in a location where potential jurors could obtain a copy and view the article. The trial court questioned the parties about the source of the article, and attorney Pattakos explained that he had provided Scene Magazine with publicly available information about the case. The article contained only the plaintiffs' perspective about the matter and revealed unfavorable information about the defendants' case. Additionally, the online article had generated comments from the public that were unfavorable to the defendants.

         {¶11} The trial court conducted an oral hearing on whether the availability of the article in the periodical had tainted the jurors in the case. The court concluded that attorney Pattakos's conduct was problematic, but found after questioning the jury, that the jury was not tainted so as to warrant a mistrial. However, the judge declared a mistrial days later for reasons unrelated to the Scene Magazine article, and the jurors were excused.

         II. Jury Trial

          {¶12} On May 19, 2015, a second jury was impaneled and the following relevant facts were presented; additional facts will be discussed as they pertain to each assignment of error.

         {¶13} English Nanny & Governess School, Inc. is a prestigious trade school that has been training professional nannies and governesses since 1985. Roth is the executive director of the school, and Gaylord is the director of operations of the Placement Agency that works to help match families with nannies from among the School's qualified graduates. Kaiser worked briefly as a placement director at the Placement Agency in early 2011, while Cruz was a student at the School.

         {¶14} In the spring of 2011, Cruz enrolled as a student at the School. When she enrolled, she paid $2, 000 and signed a Retail Installment Contract with the School to borrow $7, 100, the balance of the original $9, 100 cost of tuition and fees. Pursuant to the contract, Cruz agreed to repay the loan beginning in August 2011.

         A. Cruz's Claim

         {¶15} After Cruz's graduation in June 2011, Kaiser, as the placement director, arranged for Cruz to spend a weekend with a single father and his two daughters in Pennsylvania interviewing for a nanny position. Cruz testified that during this trip, she felt uncomfortable and certain events, actions, and interactions caused her alarm. Specifically, she stated that during the final evening she was with the family, she witnessed an inappropriate sexual act between the father and the oldest daughter. Cruz testified that she was shocked and nervous and did not know what she should do considering she was alone in the house with the family. She decided she would seek guidance from English Nanny on how to proceed with reporting the abuse.

         {¶16} On July 9, 2011, after returning to Ohio, she told Kaiser what she had seen between the father and his daughter. On July 14, Cruz told Barbara Francis, director of operations for the Placement Agency, about the incident and that she was "getting the feeling that [Gaylord was] not happy about [what happened], that it's going to affect [her] placement." (Tr. 793.) Cruz disclosed to Francis that Kaiser told her that Gaylord was "annoyed" and that if she reported, it would "cause a big mess." (Tr. 794.)

         {¶17} According to Cruz, Francis told her that whether she decided to report the abuse was up to Cruz, and that English Nanny was not getting involved. Additionally, Francis told Cruz that she was not a mandated reporter of child abuse and therefore, it was not her responsibility to report. (Tr. 792.) Based on this conversation, Cruz felt discouraged and was afraid her placement would be affected if she reported the abuse. Francis told Cruz to speak with Angel Chapin, the instructor of the class on child abuse at the School.

         {¶18} Cruz testified that she spoke with Chapin and told her in detail about the events and what she witnessed. She testified her purpose was to see if there was enough or sufficient reasoning to report the abuse. According to Cruz, Chapin seemed like she did not believe her and kept questioning each detail. Despite Cruz telling Chapin that the entire weekend dynamic and the incident warranted a report, Chapin told her that she did not think it was child abuse and that she needed proof. Nevertheless, Chapin told Cruz that it was ultimately up to Cruz to report the incident, but that in her opinion it was not child abuse and not to report it because it could ruin families. (Tr. 801-806.)

         {¶19} As a result of this conversation, Cruz attempted to contact both Roth and Gaylord about the incident. Neither were available to talk to her, but Kaiser indicated to Cruz that they were upset and did not take the allegation seriously. (Tr. 806.)

         {¶20} Cruz testified that when she finally spoke with Gaylord about the incident, she felt he was not supportive because he told her to "forget about it, " and "don't get involved, " "the father could sue the school, " "it could be a mess." (Tr. 808.) According to Cruz, she felt Gaylord kept changing the topic to her placement as a nanny to deter her from reporting the abuse.

         {¶21} Cruz learned of Kaiser's termination after speaking with Gaylord. According to Cruz, she felt that Kaiser was terminated because of her, which caused her to get scared, nervous, and sick because she felt that she was being blackballed. Accordingly, Cruz told Gaylord that she could not keep the incident a secret and that she was going to report the abuse. Cruz testified that this prompted Gaylord to agree that she should talk with Roth about the incident.

         {¶22} Cruz stated that when she spoke with Roth, Roth was irritated and annoyed that Cruz was causing a problem. When Cruz told Roth that she was reporting the abuse, Roth told her "no you're not." (Tr. 819.) After explaining her position and that she needed help writing the report, Roth referred Cruz to Shari Nacson, a social worker whom the School had recently hired to teach a class on recognizing and reporting child abuse.

          {¶23} Cruz testified that Nacson was supportive of her decision to report and based on what Cruz told her, Nacson indicated that the report needed to be made immediately. The two of the them worked together to create a thorough and detailed report. Although she met with Nacson in early August, Cruz did not file her formal report of child abuse until August 11, 2011.

         {¶24} Cruz admitted that at the same time she was reporting the allegation of abuse, her loan with the School was due. She stated this caused her more anxiety and to have panic attacks because she was getting the feeling that her report was affecting her placement as a nanny. According to Cruz, she received permission from Gaylord to seek nanny placements outside the Placement Agency and the Exclusive Placement Agreement.

         {¶25} Cruz testified that after Roth and Gaylord knew she was making the formal report, things changed between her and the Placement Agency. Cruz stated that there was little communication, interviews were cancelled, and she received a request for a medication list and to sign a release to obtain medical information. She was subsequently told that she could not be placed with a family because documentation was missing from her file. On August 19, 2011, a week after the formal report was made, Cruz received a letter from Roth releasing Cruz from the Exclusive Placement Agreement.

         B. Kaiser's Termination

          {¶26} Kaiser testified that on July 11th, she told Gaylord what Cruz had witnessed. According to Kaiser, Gaylord "became extremely agitated, very upset." (Tr. 1851.) She testified that Gaylord stated that Cruz "doesn't know what she saw; she's crazy; [the father is] going to sue us. Tell her not to report. No more interviews for Christina." (Tr. 1851.) Kaiser stated that moments later, Roth came into the office and Gaylord ordered Kaiser to "get [Roth] in here." (Tr. 1853.) Kaiser went into Roth's office and briefly told her what had occurred with Cruz. According to Kaiser, Roth responded similarly to Gaylord by stating that "she didn't know what she saw and this kind of thing ruins families. 'Tell her not to report.'" (Tr. 1853.) Both Roth and Gaylord denied that Kaiser ever told them about Cruz's allegation. However, Cheryl McNulty, who worked in the Placement Agency from June to September 2011, testified that Gaylord was upset that day, and although she did not know why, she knew it involved Cruz and Kaiser. (Tr. 1668.)

         {¶27} Kaiser told the jury that Gaylord did not want Cruz to receive any more interviews if she reported the alleged abuse and told her to dissuade Cruz from reporting. (Tr. 1855.) Kaiser interpreted this conduct as "[h]e wanted me to blackball her." (Tr. 1855.) Nevertheless, Kaiser continued to encourage Cruz to report the allegations, but told her she would be met with opposition from Roth and Gaylord if she reported.

         {¶28} Kaiser testified that she told Cruz how Gaylord had reacted and what was being said. Kaiser stated that despite being ordered to not send Cruz on any more interviews, Kaiser continued submitting Cruz's information to potential families.

          Additionally, Kaiser stated that based on the allegation, she did not want to send the Pennsylvania father any additional nanny candidates, so she only referred individuals who she knew would be unacceptable to him. Ultimately, the father asked for a refund due to the lack of service. (Tr. 1860.)

         {¶29} Kaiser testified that prior to the incident with Cruz, she had no problems with her job and had not received any complaints about her job performance. In fact, three weeks prior to her termination, Roth wrote letters to two separate individuals praising Kaiser as a "great asset" and "wonderful asset" to English Nanny, noting in one of the letters that, "we love having Heidi here." (Tr. 458-459.)

         {¶30} On July 12, Kaiser received an email from Barbara Francis advising her about the workbook she wanted Kaiser to use. The email asked Kaiser to meet with her to go over the training on how to use it. Kaiser admitted that this was not the first time the use of the workbook was discussed, but that it was the first time she saw the workbook template. Based on her experience with spreadsheet-type documents, Kaiser believed the workbook could be improved upon; however, after meeting with Francis, she concluded it was best to do it the way Francis wanted.

         {¶31} The following day, Kaiser received another email from Francis reminding her about their July 6 conversation that Gaylord wanted a list of current clients and all student graduates seeking positions. It was apparent from the email, that both Gaylord and Francis were unhappy that Kaiser had not compiled the list. Kaiser responded to the email, explaining that other agency tasks, including tasks for Gaylord that were not part of her job description, had taken her away from this task, but that she would make it a priority to compile the information. Instead, on July 18, Francis handed her a termination letter, explaining that Kaiser was being fired for no improvement in her job performance.

         {¶32} Lynn Behrman, Kaiser's successor, testified that she does not use any workbook spreadsheet to track the work done matching clients with student graduates and that no one has ever asked her to create such a document. (Tr. 2111-2112.)

         C. The Defense

          {¶33} Roth denied that she ever tried to discourage Cruz from reporting the suspected abuse, and in fact, that she believed Cruz had a duty to report the abuse and even provided Cruz with the father's address in Pennsylvania. Roth testified repeatedly that neither she, Gaylord, nor any other employee had an obligation to report the abuse, but that only Cruz had a duty to report the abuse. Roth stated that she could not understand why, despite this duty, Cruz did not report the abuse until August 11, 2011, which coincidentally was after Cruz defaulted on her School loan. She testified that she was not made aware of Cruz's allegations until she personally spoke with her on July 26, 2011. At that time, she referred Cruz with Nacson due to her expertise in the field. She testified that she assumed Nacson would help Cruz with her report; however, she was quite surprised that the formal report, which she characterized as "embellished, " was not filed until over a month after the incident occurred.

          {¶34} Roth testified that she became concerned about Cruz based on Cruz's conduct and erratic behavior after the abuse allegation, specifically, the constant phone calls and lengthy emails that Roth classified as "gobbledygook." She stated that this caused her serious concern about "what was going on with her." Based on this behavior, Roth reviewed Cruz's application file from 2008. In it, Roth found information regarding psychiatric symptoms and the name of Cruz's treating physician. Roth testified that in light of this information, and despite Cruz's subsequent 2011 application where she indicated that she had no past or present emotional conditions, Roth felt compelled to further inquire into Cruz's psychiatric history. Additionally, when Roth reviewed Cruz's 2011 application again, she realized that Cruz's file was incomplete. Roth testified that after contacting Cruz's former physician, Dr. Anna Burkey, she determined that she could no longer recommend Cruz for placement due to Cruz's ongoing mental health needs. Accordingly, on August 19, 2011, Roth wrote Cruz a letter releasing her from any obligation to the Placement Agency under the Exclusive Placement Agreement, focusing on the downturn of the economy and not Roth's concerns about Cruz's psychiatric conditions.

         {¶35} Bradford Gaylord also testified that he never dissuaded Cruz from reporting the abuse. He also denied that Kaiser spoke to him about Cruz's allegations on July 11, stating that the first time he heard about the allegations was when Cruz called him in the late evening of July 25. Gaylord said he did not understand why Cruz waited two weeks to tell him about the alleged abuse, and that if she had told him immediately, he would have definitely supported her. Gaylord testified that after he spoke with Cruz on July 25 about the alleged abuse, he went to work the following day and told Roth that "Christina has an issue, you need to deal with it." (Tr. 2650.) According to Gaylord, that was "all his responsibility was" because Roth was the appropriate authority to address the issue. (Tr. id.).

         {¶36} When asked about Cruz's performance at the school, Gaylord told the jury that Cruz was a "great con artist" who "didn't learn much" attending the School, despite achieving high marks in all of her classes. (Tr. 2597.) Additionally, he denied telling Cruz that she could seek out nanny positions on her own because she was still under the Exclusive Placement Agreement.

         {¶37} Additionally, Gaylord denied that he excluded Cruz from any interviews or potential placements after the allegation of abuse surfaced. Despite Kaiser testifying that Gaylord told her not to give Cruz any more interviews, Lynn Behrman, Kaiser's replacement, testified that she attempted to place Cruz as a nanny with families between July and August 2011. She stated that she was never advised not to place to Cruz with a family or to stop all interviews for Cruz until it was discovered that Cruz's file was incomplete. Additionally, Behrman stated that at no time was she reprimanded for attempting to place Cruz with a family.

         {¶38} In their defense to Cruz's tort claims for emotional distress, the defendants focused on Cruz's history of emotional and psychological distress. The jury was presented with Cruz's medical history and her own testimony that she has suffered her entire life with emotional problems, including anxiety and depression. Cruz admitted that the episodes of panic attacks, depression, and anxiety continued in her adult life, which she attributed to financial strain. She testified extensively about her financial difficulties and bouts of unemployment prior to attending the School, but said that despite these prior issues and the subsequent emotional distress caused by English Nanny, she was able to attend school, obtain high grades, and obtain and perform nanny-type employment.

         D. The Verdict

         {¶39} After a 26-day, bifurcated-jury trial, the jury found in favor of Cruz and against all defendants on her claim for intentional infliction of emotional distress. The jury award Cruz $150, 000 ($75, 000 in economic damages and $75, 000 in non-economic damages) against each defendant. Additionally, the jury awarded Cruz punitive damages against (1) the Placement Agency in the amount of $50, 000, (2) Sheilagh Roth in the amount of $68, 750, and (3) Bradford Gaylord in the amount of $50, 000. The jury also found these defendants liable for Cruz's reasonable attorney fees. The jury found in favor of Cruz on her breach of contract claim and awarded her nominal damages of $10.

         {¶40} The jury also found in favor of Kaiser and against the School on her claim of wrongful discharge in violation of public policy, awarding her $20, 000 in damages. Additionally, the jury awarded her punitive damages against the School and the Agency in the amount of $54, 000, plus reasonable attorney fees.

          {¶41} The jury found in favor of the School against Cruz on the School's counterclaim for breach of contract and awarded the School $8, 262.24.

         III. ...

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