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CP & B Enterprises3/3/2000
Kimberly Mellert sued Brad Rhoades and his employer, CP & B Enterprises, Inc., d/b/a World Gym ("World Gym"). She alleged assault and battery and invasion of privacy based upon claims that she had been subjected to sexual harassment by Brad Rhoades while she was an employee of World Gym and was working at its place of business. Mellert also alleged negligence and wantonness on the part of World Gym in retaining Brad Rhoades as an employee; Mellert alleged that World Gym had retained Brad Rhoades as an employee although it had known of allegations that he had sexually harassed other females at the workplace. Mellert also sought to impose on World Gym vicarious liability for Brad Rhoades's actions. At trial, the court ruled that, as a matter of law, when the alleged harassment of Mellert occurred, Brad Rhoades was not acting in the line and scope of his employment or in furtherance of the business of his employer; therefore, ratification was the sole ground upon which the question of World Gym's vicarious liability was submitted to the jury. The jury returned a verdict in favor of the plaintiff and against both defendants, assessing compensatory damages of $25,000 and punitive damages of $250,000. The court entered a judgment against both defendants, making each defendant liable for the full amount awarded by the jury. The defendants filed separate appeals. We reverse and remand.
I.
The evidence presented at trial indicated that Charles Rhoades and Pamela Rhoades were the sole stockholders in the corporation that did business as World Gym. The corporation began operation of a fitness center in May 1995. The Rhoadeses' son, Brad Rhoades, was installed as director of operations for World Gym. The business hired Mellert on a part-time basis in June 1995 to work in the nursery. In February 1996, Mellert was hired to work full-time as the front-desk receptionist. Mellert testified that while she was working part-time at the gym, Brad Rhoades made offensive comments to her, saying, for example, that she "had a great body," that she "had a nice rear end," and that "he wanted to have sex with ." Mellert also testified that Brad threatened her that if she did not have sex with him her job would be endangered, and she testified that he told her that if she told what he had said no one would believe her. Mellert stated that after she began working full-time, Brad's conduct escalated to offensive touchings, including rubbing against her breasts, putting his hand up her shorts, and kissing her. These physical touchings, she said, all occurred within one week.
Mellert testified that after Brad kissed her, she told Shelley Beall, World Gym's general manager, and that Ms. Beall stated that she "would handle it." Mellert said she also told James Andress, the comptroller, about Brad's conduct. Mellert testified that Andress told her that "he had known of other things that have happened like this and he would handle it." Mellert said that after she had these discussions with Beall and Andress, Brad's work schedule was rearranged so that he would not be alone with Mellert in the gym. Mellert left World Gym in April 1996. Mellert's testimony was disputed by Brad Rhoades. He denied putting his hand up her shorts, and he testified that any conduct between them was consensual and that the kiss was mutual.
C.B., a former aerobics-exercise instructor at World Gym, testified that Brad subjected her to offensive comments and touchings from May to December 1995. She testified that Brad attempted to kiss her several times and exposed himself to her several times. She testified that on one occasion Brad took off all his clothes while they were alone in the aerobics room. C.B. testified that she
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