SCHUMAN, P.J.
Plaintiff Cynthia McNeff was hired by defendant Terry Emmert to work as inhouse legal counsel for his company, Emmert Industrial Corp. (EIC), which is also a defendant in this case. Less than a year into the job, plaintiff was fired. She subsequently brought breach of contract, tort, and employment discrimination claims against defendants. In response, defendants counterclaimed for fraud, breach of contract, and malpractice.
After the parties presented their cases, the trial court directed a verdict against plaintiff on her breach of contract and fraud claims and sent the remainder of her claims to the jury. On one of plaintiff's claims (defamation), the jury found in her favor and awarded damages of $1,000 against each defendant. On several other claims (intentional infliction of emotional distress, assault and battery, and wrongful discharge), the jury returned a defense verdict. And on her final claim (workplace discrimination based on a hostile work environment), the jury returned something of a hybrid verdict: The jury found that defendants had discriminated against plaintiff "on account of gender by creating a hostile work environment" and should be punished by an award of punitive damages; yet the jury answered "$0.00" when asked to award noneconomic damages on that claim. The trial court declined to resubmit the verdict form to the jury, instead treating the jury's answer of "$0.00" in damages as a verdict for the defense.
As for the counterclaims by defendants, the jury found that plaintiff had been negligent in handling a number of matters in her role as legal counsel but that her negligence had resulted in a loss to defendants in only one of those matters. The damages for that malpractice, which the jury concluded were $371.00, were further reduced to $241.15 by the jury's finding that Emmert's own negligence caused 35 percent of the loss. The trial court then entered a money judgment in favor of plaintiff in the amount of $1,758.85 — her $2,000 recovery for defamation, less the offsetting malpractice award of $241.15. The court later entered a supplemental judgment concerning an award of costs.
Plaintiff now appeals the judgment and supplemental judgment, raising four assignments of error. We write to address two of those assignments of error. In her first assignment, she argues that the trial court erred in taking her fraud claim away from the jury by way of a directed verdict. In her third assignment, she contends that the jury's verdict regarding a hostile work environment was internally inconsistent and should have been sent back to the jury for clarification. As discussed below, we conclude that the judgment must be reversed and remanded for a new trial on plaintiff's fraud and hostile work environment claims.
In plaintiff's first assignment of error, she argues that the trial court erred in directing a verdict against her on her fraud claim. In this posture, we state the facts underlying that claim in the light most favorable to plaintiff. See Mauri v. Smith, 324 Or. 476, 479, 929 P.2d 307 (1996) (describing the standard for review of a directed verdict).
In December 2006, plaintiff attended a holiday party put on by a group of lawyers. At
Bauman, it turned out, was a longtime friend of Terry Emmert. In early 2007, after his retirement, Bauman began working in an advisory capacity for Emmert and EIC, his industrial moving company that transports houses, equipment, and other large items. After observing EIC's operations, Bauman decided that EIC would benefit from hiring another lawyer, and he suggested to Emmert that plaintiff, with whom Bauman had stayed in contact, might be a good fit because of her dual background in the law and industry. (In addition to running a demolition company, plaintiff had worked as an environmental health technician and an industrial hygienist technician.) Bauman arranged a meeting, and the three of them had lunch together.
The lunch meeting resembled a job interview. Emmert asked plaintiff about her experience and her thoughts about legal work. Mostly, though, Emmert voiced complaints about his present attorneys (Bauman excluded) and his dissatisfaction with their performance. After the lunch, Emmert wanted to show plaintiff some of his business operations, and he took her to some of his facilities.
Following the lunch meeting, Emmert and plaintiff continued a dialogue about the possibility of her working for Emmert. One evening, Emmert called plaintiff and "suggested that [she] come over and chat with him about this job that he was offering [her]." During that meeting at Emmert's home, they had "some more in-depth conversations about what [Emmert] needed and what he wanted and his a lot about his dissatisfaction with things that were going on with his business."
As they continued to discuss a job offer, plaintiff "told [Emmert] that in order to work for him, [she] would have to close [her] demolition company." At that particular time, plaintiff was also starting another company to install solar panels on commercial buildings, and she had started the licensing process for that type of work. She explained her plans to do solar work to Emmert and told him, "[I]f I was going to go to work for him and — and let these things go, I wasn't going to do this without any type of guarantee of employment." Emmert replied that he understood that.
During that same discussion about guaranteed employment, plaintiff and Emmert discussed her desire for a written contract. She told Emmert that, if she were "going to give up these companies to go work for you, I would need something — something in writing that stated that I would have an employment contract for term because of the risk involved of closing my companies." Emmert told plaintiff to send the contract to him through Bauman, so that Emmert's present in-house counsel, Michele Matesi, would not see it.
Plaintiff sent a proposed contract to Bauman and then called him to discuss it. Bauman recommended that plaintiff delete the terms of the contract regarding a holiday schedule and benefits package, and to instead provide that those terms of employment will be "per company manual." Plaintiff made those changes and then sent the contract back to Bauman, for him to forward it on to Emmert. The proposed contract, entitled "Employment Agreement," stated that plaintiff was to be employed for a period of 36 months
During their final conversation before she started her employment with EIC, plaintiff and Emmert again discussed the written contract and the logistics of getting it signed. Emmert told her to bring the contract with her when she came to work, and plaintiff did so. On June 23 — two days before plaintiff started work — Emmert received a message from Matesi advising him not to "sign any sort of Contract WHATSOEVER with this new attorney, promising her ANYTHING. She is a regular full-time employee. Tell her you don't do `employment contracts' or whatever. Just PLEASE PLEASE don't sign anything." (Uppercase in original.) When plaintiff arrived for her first day of work on June 25, 2007, she went into Emmert's office and handed him the contract. Emmert told her, "I'll get to it later. I'm a little busy right now."
Neither Emmert nor plaintiff ever signed that or any contract to employ plaintiff as inhouse counsel.
Despite the lack of a signed agreement, plaintiff started her employment with EIC at the same monthly pay set forth in the agreement, and she wound down her solar energy and demolition work. After starting her employment, she signed an acknowledgement stating that she agreed to be bound by the terms of EIC's employee handbook. She also signed an application for employment that stated, "I also understand and agree that no representative of the company has any authority to enter into any agreement for employment for [any] period of time or to make any agreement contrary to the for[e]going unless it is in writing and signed by an authorized company representative."
The relationship between plaintiff and Emmert deteriorated quickly. Within a few months, Emmert was complaining about the quality of plaintiff's work and the number of hours that she was working. On March 14, 2008, plaintiff, in response to some of those complaints, sent an e-mail stating, among other things, that "[m]y employment agreement was my hours were from 7 am to 4 and that has been the standard for the last 8 months. I have not and did not and do not agree to change these hours. A deal is a deal." Four days later, Emmert sent a memorandum to plaintiff that stated, in part:
Less than two weeks later, on March 31, 2008, plaintiff was terminated from her position.
In her fraud claim,
On appeal, plaintiff argues that the evidence at trial was legally sufficient to establish the elements of fraud and that neither of the grounds raised by defendants — unreasonable reliance or the lack of a "special relationship" — was sufficient to defeat the claim as a matter of law. In response, defendants reprise the arguments they made below and add another-that plaintiff failed to prove that defendants had any fraudulent intent.
We begin by addressing defendants' arguments regarding plaintiff's purported failure to prove two of the elements of fraud. To establish a common-law fraud claim, a plaintiff must prove that
Strawn v. Farmers Ins. Co., 350 Or. 336, 352, 258 P.3d 1199, adh'd to on recons., 350 Or. 521, 256 P.3d 100 (2011).
According to defendants, this is simply a case in which there was never a meeting of the minds regarding the terms of an employment contract, and the mere fact of nonperformance of a contract — one that never existed, for that matter — is not sufficient to prove that Emmert had any wrongful intent. Cf. Holland v. Lentz, 239 Or. 332, 348, 397 P.2d 787 (1964) ("A fraudulent intent not to perform a promise may not be inferred as existing at the time the promise is made from the mere fact of nonperformance. Other circumstances of a substantial character must be shown in addition to nonperformance before such inference of wrongful intent may be drawn." (Internal citations and quotation marks omitted.)). However, plaintiff's fraud claim does not depend on a "meeting of the minds" — in fact, it is predicated on the theory that Emmert had in mind something very different from what he communicated to
Alternatively, defendants contend that, even if there were a misrepresentation regarding future employment terms, plaintiff cannot prove that she justifiably relied on that promise. They submit that plaintiff was a licensed attorney and sophisticated businessperson; thus, her reliance on Emmert's promises "is not a reasonable reliance when all of the essential terms of the proposed contract have not been discussed and agreed upon." Moreover, they argue that, because plaintiff's proposed contract provided that the written agreement would supersede oral or written agreements, she "cannot claim that she reasonably relied on any alleged prior agreement between the parties." Neither of those arguments is persuasive. As for the former, viewing the evidence in the light most favorable to plaintiff, the essential terms were discussed and agreed upon — or, at least Emmert told plaintiff that he had agreed to the terms. As for the latter, we cannot imagine what principle of law would permit a party to fraudulently promise to execute a contract that includes an integration clause, and then rely on a provision of that unexecuted agreement to defeat the fraud claim.
We turn, lastly, to defendants' contention that plaintiff's fraud claim is barred by the absence of a "special relationship" between defendants and plaintiff. Defendants argue:
Plaintiff responds that the "special relationship" rule expressed in cases like Conway and Georgetown Realty applies only to negligence claims, not to intentional torts like fraud.
Plaintiff is correct. As we explained in Murphy v. Allstate Ins. Co., 251 Or.App. 316, 284 P.3d 524 (2012), it is not by coincidence that Conway and other "special relationship" cases involve negligence rather than intentional torts:
251 Or.App. at 328, 284 P.3d 524 (footnote omitted).
In sum, we conclude that none of the grounds advanced by defendants is sufficient to defeat plaintiff's fraud claim as a matter of law. Thus, the trial court erred in granting the motion for a directed verdict on that claim, and we reverse and remand the judgment in that regard.
As part of her workplace discrimination claim, plaintiff contended that Emmert had created a hostile work environment on the basis of her gender, thereby violating Oregon antidiscrimination law. See generally ORS 659A.030(1)(a), (b). Plaintiff sought both noneconomic and punitive damages on that claim, but the trial court bifurcated the proceedings so that the amount of any punitive damages award would be determined in a later proceeding, if necessary. Thus, with regard to the hostile work environment claim, the jury was instructed, in part:
(Emphasis added.) With regard to punitive damages, the jury was instructed, in part, "If plaintiff prevails on one or more of her claims for intentional infliction of emotional distress, assault and battery or employment discrimination, then you must consider whether or not to award punitive damages."
The verdict form, in turn, posed the following questions:
When the jury returned its verdict, it had answered "Yes" to Question 12, finding that both defendants had created a hostile work environment. On Question 13, the jury initially wrote "$1250" beside each defendant, then crossed out those numbers and wrote "$0.00" as the award of noneconomic damages. Although the jury did not award any noneconomic damages, it proceeded to answer "Yes" as to both defendants on Question 14, finding that they should be assessed punitive damages.
After the verdict was returned, defendants moved to dismiss the hostile work environment claim. They argued that, because the jury awarded no noneconomic damages, the hostile work environment claim should be dismissed and no further proceedings should be held to determine an amount of punitive damages. Plaintiff, for her part, objected to what she described as an inconsistency in the verdict. She argued:
The trial court ruled that the verdict was not internally inconsistent and should be treated as a defense verdict. The court explained:
The trial court, consistently with that reasoning, entered judgment dismissing plaintiff's hostile work environment claim.
On appeal, plaintiff argues that the trial court erred by entering judgment on an internally inconsistent verdict rather than resubmitting the claim to the jury. See ORCP 59 G(4) ("If the verdict is informal or insufficient, it may be corrected by the jury under the advice of the court, or the jury may be required to deliberate further."). We agree. The jury's verdict was internally inconsistent with regard to whether plaintiff suffered damages. On the one hand, the jury was instructed that, for plaintiff to prevail on her hostile work environment claim, it must find three elements, the last of which was that "the defendants' actions caused the plaintiff damages." It was further instructed to consider punitive damages if plaintiff were to prevail on her claim. By answering "Yes" to Questions 12 and 14, the jury indicated that plaintiff had in fact prevailed on the hostile work environment claim — i.e., proved all the elements of the claim, including that defendants caused plaintiff damages. On the other hand, by answering "$0.00" to Question 13, the jury indicated that plaintiff had not suffered
Reversed and remanded on fraud claim and hostile work environment claim; otherwise affirmed.
251 Or.App. 328 n 13.