                                          No. 03-757

                IN THE SUPREME COURT OF THE STATE OF MONTANA

                                         2005 MT 123


NINA BENJAMIN,

               Petitioner, Respondent, and Cross-Appellant,

         v.

JERRY ANDERSON and DARINDA WILLIAMS,
d/b/a JOKER’S WILD BAR AND RESTAURANT,

               Respondents, Appellants, and Cross-Respondents,

         and

RICHARD WILLIAMS,

               Cross-Respondent.


APPEAL FROM:          District Court of the Fourth Judicial District,
                      In and for the County of Missoula, Cause Nos. DV 02-427 and DV 02-419
                      The Honorable Ed McLean, Judge presiding.

COUNSEL OF RECORD:

               For Appellants:

                      Richard R. Buley, Tipp & Buley, Missoula, Montana

               For Respondent:

                      Lucy T. France, Garlington Lohn & Robinson, Missoula, Montana; Timothy
                      C. Kelly, Attorney at Law, Emigrant, Montana


                                                          Submitted on Briefs: May 4, 2004

                                                                    Decided: May 17, 2005

Filed:

                      __________________________________________
                                        Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1     Jerry Anderson (“Anderson”) and Darinda Williams (“Darinda”), the former manager

and former owner of Joker’s Wild Bar and Restaurant, respectively, appeal from the Opinion

and Order of the Montana Fourth Judicial District Court, in which the court determined that

they were liable for sexual discrimination by sexual harassment against Nina Benjamin

(“Benjamin”). Benjamin cross-appeals that portion of the District Court’s Order which

dismissed Richard Williams (“Dick”) as a party to that lawsuit. We affirm the District Court

on both the appeal and cross-appeal.

                                          ISSUES

¶2     Anderson and Darinda present five issues on appeal, which we restate as follows:

¶3     1. Did the District Court err when it concluded that Benjamin’s complaint was not

barred by the statute of limitations?

¶4     2. Did the District Court err when it concluded that sexual harassment had occurred,

without making an explicit finding that the alleged sexual harassment was sufficiently severe

or pervasive as to alter Benjamin’s conditions of employment and create an abusive work

environment?

¶5     3. Did the District Court err when it upheld damages for lost wages?

¶6     4. Did the District Court err when it concluded that Benjamin’s wage loss recovery

should not be reduced for failure to mitigate?

¶7     5. Did the District Court err when it re-imposed the Hearing Examiner’s award for

emotional distress, and refused to strike the award of damages altogether?


                                             2
¶8     Benjamin presents one issue on cross-appeal:

¶9     6. Did the District Court err when it concluded that Dick was not the employer or an

agent of the employer of Benjamin?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶10    Benjamin filed a complaint of discrimination with the Montana Human Rights Bureau

of the Department of Labor and Industry on September 17, 1999, alleging that Anderson,

Darinda, and Darinda’s husband Dick, committed sexual discrimination by sexual

harassment. A contested case hearing proceeded from January 23 through January 27, 2001.

The Hearing Examiner entered the Final Agency Decision on January 2, 2002, concluding

that Anderson and Darinda had committed sexual discrimination by sexual harassment

against Benjamin, but further concluding that Dick was not liable to Benjamin, dismissing

him from the case. Anderson and Darinda appealed the Final Agency Decision to the

Montana Human Rights Commission (“HRC”). The HRC issued its Order Affirming and

Amending Final Agency Decision on April 23, 2002, in which it upheld the majority of the

Final Agency Decision, but concluded that the Hearing Examiner’s award of monetary relief

for Benjamin’s emotional distress was excessive and reduced it from $75,000 to $40,000.

The HRC also determined that an error had been made in calculating Benjamin’s health care

expenses and added $10,552 to the medical award.

¶11    Anderson and Darinda appealed the HRC decision to the District Court. Benjamin

cross-appealed the issues of the dismissal of Dick and the HRC’s reduction of the emotional

distress award. In its Opinion and Order filed September 12, 2003, the District Court upheld

                                             3
the finding of Anderson’s and Darinda’s liability, reinstated the Final Agency Decision’s

emotional distress award of $75,000, and affirmed Dick’s dismissal from the case. This

appeal follows.

¶12    In determining whether or not substantial credible evidence supports the findings at

the hearings level, we view the evidence in the light most favorable to the respondent. See

Hunter v. City of Bozeman (1985), 216 Mont. 251, 255, 700 P.2d 184, 187 (citations

omitted). Thus, where contradictory evidence exists, we recite the facts as found by the

Hearing Examiner in the Final Agency Decision.

¶13    Benjamin (formerly Nina Lande), was an employee at Joker’s Wild Bar and

Restaurant in Missoula from September 17, 1998, through March 29, 1999. Benjamin

worked primarily as a cocktail waitress. She was supervised by Anderson, Darinda, and

Darinda’s son Michael Williams (“Michael”). Her regular shift was the evening shift in the

lounge, where she usually worked with bartender Nicole Crisafulli (“Crisafulli”). Benjamin

occasionally worked banquets at Darinda’s request in addition to her cocktail waitress shifts.

¶14    During the time Benjamin worked at Joker’s Wild, Darinda owned the business and

Anderson and Michael both worked as managers. Dick was an active adviser to the business,

and held an ownership interest in the name “Joker’s Wild.” Further details about Dick’s

involvement with Joker’s Wild will be provided in the discussion below.

¶15    In December 1998, Joker’s Wild held an employee Christmas party at the restaurant

and provided free liquor to attending employees and their guests. Benjamin and her then-

husband, Tim Lande (“Lande”), attended. Darinda was the on-duty manager at the start of

                                              4
the party. She distributed bonuses and gifts to employees, including a $100 bonus to

Benjamin. She also announced that Anderson and Michael were purchasing Joker’s Wild.

Indeed Anderson and Michael did buy the business later in 1999--a fact which the Hearing

Examiner found significant, given the manner in which the Joker’s Wild management chose

to deal with Benjamin’s complaint about Anderson’s behavior toward her.

¶16    Darinda left the premises during the party, leaving Anderson as the on-duty manager.

Anderson did not drink any alcohol at the party, but did tend bar briefly so that the hired

bartender could take breaks. Joker’s Wild had a policy which required managers to ensure

that intoxicated customers and employees would not drive themselves home. Anderson left

the party at least once to drive an intoxicated guest home.

¶17    Lande left before the end of the party, but Benjamin remained. She had several mixed

drinks and danced with Anderson and a member of the hired band. When she was ready to

leave, it was apparent to other attendees that she was too intoxicated to drive. Anderson told

Benjamin he would give her a ride home. Crisafulli also offered to give Benjamin a ride

home, but Benjamin refused Crisafulli’s offer, reasoning that Anderson lived near Benjamin

while Crisafulli would have to drive out of her way to take Benjamin home.

¶18    Anderson left Joker’s Wild with Benjamin as his passenger. He did not drive her

directly home, but traveled on side streets and stopped his car three or four times to pursue

sexual contact with Benjamin. Benjamin drifted in and out of consciousness, and awakened

to discover that Anderson was attempting to remove her clothing. During one stop,



                                              5
Benjamin told Anderson that she believed she was going to be ill. Anderson let her out of

the car. Benjamin then returned to the car and Anderson drove her home.

¶19    The following day, Benjamin called in sick to work. She testified that she was both

too ill and too ashamed of the incident with Anderson to face him at work. Benjamin

returned to work three days after the Christmas party. At the beginning of her first shift,

Anderson asked her to “have a bite to eat” with him. Benjamin refused. Anderson persisted,

and Benjamin agreed to meet him at a table in the bar area of Joker’s Wild. They discussed

Anderson’s actions after he left the Christmas party with Benjamin. Benjamin explained that

she did not know how she had gotten so intoxicated at the party, and further told Anderson

that she wanted to ensure that no further intimate contacts occurred between them. In

response, Anderson hinted that the sexual contact between them was more intimate than

Benjamin remembered, and further suggested that she had been a willing participant. He

instructed Benjamin not to tell anyone else about what had occurred.

¶20    Soon afterward, Benjamin discussed the incident with Crisafulli and Janice Howard

(“Howard”)--a former co-worker at Joker’s Wild and personal friend. Benjamin did not

approach Darinda, Michael, or Dick to discuss the incident with Anderson. During

Benjamin’s employment at Joker’s Wild, the business did not have a sexual harassment

policy nor a written procedure for investigating complaints of sexual discrimination or sexual

harassment. Darinda testified that if an employee had a problem, that employee would talk

with Anderson, Michael, Dick, or Darinda. Employees were not told there was a procedure,

but were expected to figure out what to do on their own. Eventually, rumors spread at

                                              6
Joker’s Wild that something had happened between Benjamin and Anderson on the night of

the Christmas party.

¶21    While Benjamin was on vacation in late January and early February of 1999, Howard

told Dick that a problem had occurred between Anderson and Benjamin after the Christmas

party. Howard and Dick then informed Darinda. Darinda and Dick contacted Michael and

told him there had been an “incident” between Benjamin and Anderson, and asked Michael

to speak with Benjamin after she returned from vacation. Darinda and Dick took no further

action to investigate the “incident.”

¶22    When Benjamin returned from vacation, Michael contacted her and arranged a

meeting. Benjamin told Michael that Anderson had not taken her directly home and that

things had happened that she did not want to happen. Michael told her that he would “take

care of it,” and that Benjamin’s job was not in jeopardy. Michael apologized to Benjamin,

saying he was sorry that “this” had happened. Michael and Benjamin did not discuss what

actions, if any, would be taken by Joker’s Wild in response to this discussion.

¶23    Michael next talked to Anderson. He informed Anderson that he had already spoken

with Benjamin and hinted that he knew what had happened. Anderson admitted that he had

made sexual advances toward Benjamin, and that there had been sexual contact between

them. He claimed that the sexual contact had been consensual. Knowing that Benjamin had

been extremely intoxicated at the time, Michael told Anderson that Joker’s Wild could not

have repeat instances of such conduct and ordered Anderson to leave Benjamin alone.



                                             7
Michael and Anderson did not again discuss the incident and no further action or

investigation was undertaken by anyone at Joker’s Wild.

¶24    Anderson avoided Benjamin for a while after her vacation, but then began to

supervise her again. Benjamin testified that Anderson used his supervision of her as an

excuse to brush up against her and touch her unnecessarily, and that Anderson put Benjamin

in situations where she had to work in close physical proximity to him.

¶25    Through the middle of February 1999, Benjamin received favorable comments

concerning her work at Joker’s Wild. As late as February 15, 1999, Darinda acknowledged

that customers liked Benjamin. Crisafulli and Michael also complimented Benjamin on her

work. Soon after Darinda, Michael, and Dick learned of the “incident,” co-workers told

Benjamin that Darinda was accusing her of having a “flirtation problem.” Benjamin testified

that Darinda seemed to be avoiding her, and Michael and Dick were watching her while she

worked.

¶26    Benjamin’s job performance began to suffer. Management received complaints about

her job performance from some of her co-workers.

¶27    As a general security practice, Joker’s Wild utilized surveillance cameras. In March

1999, Darinda and Michael reviewed tapes of Benjamin at work. The surveillance tapes did

not provide any evidence of poor work performance by Benjamin. Darinda and Michael did

not review tapes of Anderson.

¶28    On March 20, 1999, Benjamin agreed to work a shift for another employee, believing

that Anderson was not scheduled to supervise that shift. Anderson, however, was the

                                            8
supervisor for that shift, during which he behaved inappropriately toward Benjamin in spite

of Benjamin’s attempts to avoid him. After Benjamin’s shift, Anderson told Darinda that

Benjamin had performed poorly. Later that week, Michael approached Benjamin to discuss

her failure to provide service to a particular customer in Joker’s Wild. When Benjamin

attempted to explain to Michael that she was afraid of the customer, he interrupted her and

yelled at her in front of others in the casino. Michael terminated Benjamin’s employment

at Joker’s Wild on March 29, 1999.

¶29    In August 1999, Anderson gave another Joker’s Wild employee a ride home after she

became too intoxicated to drive. Anderson had sexual contact with the employee while she

was in the car, and attempted to pursue further sexual contact with her a few days later while

they were both at work. The employee complained to Michael about Anderson’s conduct,

and Michael’s wife, who also worked at Joker’s Wild at that time, obtained a written

statement from the employee which stated that Anderson’s advances were unwelcome. A

few days after Michael received this statement, Anderson executed an agreement which

terminated his interest in Joker’s Wild and in the partnership.

                               STANDARD OF REVIEW

¶30    Actions brought before the HRC are subject to the requirements of the Montana

Administrative Procedure Act (“MAPA”). Moran v. Shotgun Willies, Inc. (1995), 270 Mont.

47, 50, 889 P.2d 1185, 1186. The standard of review of an agency decision under MAPA,

set forth at § 2-4-704(2), MCA, provides in pertinent part:




                                              9
       The court may not substitute its judgment for that of the agency as to the
       weight of the evidence on questions of fact. The court may affirm the decision
       of the agency or remand the case for further proceedings. The court may
       reverse or modify the decision if substantial rights of the appellant have been
       prejudiced because:

       (a) the administrative findings, inferences, conclusions, or decisions are: . . .
       (v) clearly erroneous in view of the reliable, probative, and substantial
       evidence on the whole record; [or] (vi) arbitrary or capricious or characterized
       by abuse of discretion or clearly unwarranted exercise of discretion. . . .

¶31    A three-part test is used to determine whether agency findings are clearly erroneous:

(1) the record is reviewed to determine if the findings are supported by substantial evidence;

(2) if the findings are supported by substantial evidence, it will be determined whether the

agency misapprehended the effect of the evidence; and (3) if substantial evidence exists and

the effect of the evidence has not been misapprehended, the reviewing court may still decide

that a finding is clearly erroneous if a review of the record leaves the court with a definite

and firm conviction that a mistake has been made. Total Mechanical Heating v. UEF, 2002

MT 55, ¶ 22, 309 Mont. 84, ¶ 22, 50 P.3d 108, ¶ 22.

¶32    We review conclusions of law to determine if they are correct. Moran, 270 Mont. at

51, 889 P.2d at 1187.

                                        DISCUSSION

                                        ISSUE ONE

¶33    Did the District Court err when it concluded that Benjamin’s complaint was not

barred by the statute of limitations?




                                              10
¶34    Darinda and Anderson claim that, according to the Hearing Examiner, the sexual

discrimination against Benjamin was the result of the sexual assault which occurred

following the December 1998 Christmas party. They maintain that the Hearing Examiner

specifically found that this single incident was severe enough to create a hostile work

environment. Noting that pursuant to § 49-2-501(4), MCA, a claimant has 180 days in which

to file a complaint with the Department of Labor and Industry, and that Benjamin did not file

her Complaint until September 17, 1999--well beyond 180 days from the December 1998

Christmas party--they claim Benjamin’s claim is time-barred.

¶35    Benjamin responds that the District Court correctly concluded that her complaint was

timely. She argues that substantial credible evidence, as detailed in the Final Agency

Decision, illustrates that she was subjected to company-wide discrimination. She points out

that she filed her complaint within 180 days of her termination from Joker’s Wild, and that

her claim was not based solely upon the assault after the Christmas party, but encompassed

all of the acts which occurred from December 1998 until her termination in late March 1999.

She claims the many incidents documented in the Final Agency Decision were part of the

hostile environment which existed at Joker’s Wild, culminating in her termination.

¶36    Benjamin further argues that her termination was itself a discriminatory act and part

of the hostile environment at Joker’s Wild. She notes that the Hearing Examiner found that

Anderson played a part in her termination, and asserts that other courts have found that such

a termination action is tainted if a supervisor with a “discriminatory animus” is found to have

played a role in the decision. See Sink v. Knox County Hosp. (S.D. Ind. 1995), 900 F. Supp.

                                              11
1065, 1077. She further notes that the Final Agency Decision repeatedly characterizes the

period of her hostile environment claim as continuing from the Christmas party through her

termination.

¶37    Both parties press this Court to find their witnesses to be more credible than the

opposing witnesses, and call our attention to a myriad of conflicting testimony, personal

animosities, and ulterior motives which each side claims casts doubts upon the credibility

of the opposing party’s claims. However, under § 2-4-704(2), MCA, a court reviewing an

agency decision may not substitute its judgment for that of the agency as to the weight of the

evidence on questions of fact. As long as we determine that substantial credible evidence

exists to support the findings of the trier of fact, we may not re-weigh the evidence, but must

instead defer to the Hearing Examiner. “A hearing examiner, when one is used, is in the

unique position of hearing and observing all testimony entered in the case. . . . The findings

of the hearing examiner, especially as to witness credibility, are therefore entitled to great

deference.” Moran, 270 Mont. at 51, 889 P.2d at 1187 (citation omitted).

¶38    While Darinda and Anderson claim that the Hearing Examiner and the HRC found

that a single incident--the assault--constituted the event behind Benjamin’s claim, it is more

accurate to state that the HRC found that one incident would have been sufficiently severe

to constitute sexual discrimination but even more followed. As addressed above, the Final

Agency Decision in fact delineates actions that occurred and recurred over a several-month

time-span.




                                              12
¶39    The Hearing Examiner concluded that Benjamin demonstrated that the discrimination

against her at Joker’s Wild consisted of “a series of related acts,” several of which were

within the statute of limitations period, which constituted a “serial violation.” The Hearing

Examiner explained that, although some of the discriminatory acts occurred outside of the

limitations period, these acts were sufficiently related to the acts occurring within the

limitations period. The Hearing Examiner concluded that these acts were not isolated,

sporadic, or discrete, but part of a continuing violation.

¶40    Darinda and Anderson point out that the Final Agency Decision relied upon Morgan

v. National Railroad Passenger Corp. (9th Cir. 2000), 232 F.3d 1008, when it concluded that

a “serial violation” had occurred, and that, on appeal, the Supreme Court expressly rejected

the concept of “serial violations” as a means of getting previous acts around the time bar.

National Railroad Passenger Corporation v. Morgan (2002), 536 U.S. 101, 122 S.Ct. 2061,

153 L.Ed.2d 106. We turn to an analysis of Morgan.

¶41    In Morgan, the plaintiff filed a complaint against the National Railroad Passenger

Corporation (“NRPC”), alleging violations of Title VII of the Civil Rights Act of 1964, as

amended in 1991. See 42 U.S.C. § 2000e et seq. He claimed that he suffered discrimination

and retaliation and endured a hostile work environment because of his race. Morgan, 232

F.3d at 1010. The district court granted partial summary judgment for NRPC on the grounds

that some of the alleged acts of discrimination were time-barred. Morgan, 232 F.3d at 1010.

The U.S. Court of Appeals for the Ninth Circuit reversed, holding that Morgan had

demonstrated that the alleged discriminatory acts which occurred outside the time limitation

                                              13
period were nonetheless related to acts which occurred within the time limitation period and

thus were part of a “continuing” or “serial” violation. Morgan, 232 F.3d at 1017-1018. The

Ninth Circuit explained that a plaintiff can establish a continuing violation in one of two

ways: by showing a series of related discriminatory acts that are not isolated, sporadic, or

discrete, one or more of which are within the limitations period; or by showing a systematic

policy or practice of discrimination that operated, in part, within the limitations period.

Morgan, 232 F.3d at 1015.

¶42       On appeal, the U.S. Supreme Court affirmed in part and reversed in part, holding that

Title VII precludes recovery for discrete acts of discrimination or retaliation that occur

outside the statutory time limit, but that consideration of the entire scope of a hostile work

environment claim, including behavior alleged to have occurred outside the statutory time

period, is permissible so long as any act contributing to the hostile environment occurs

within the statutory time period. Morgan, 536 U.S. at 105, 122 S.Ct. at 2068, 153 L.Ed.2d

at 117.

¶43       Darinda and Anderson correctly note that the Supreme Court overruled the

“continuing” or “serial” violation theory. In doing so, the Court explained, “Discrete acts,

such as termination, failure to promote, denial of transfer, or refusal to hire are easy to

identify,” and that a complainant may only file a charge to cover “discrete acts” that

occurred within the actionable time period. Morgan, 536 U.S. at 114, 122 S.Ct. at 2061, 153

L.Ed.2d at 122. However, the Court went on to explain, “A hostile work environment claim

is composed of a series of separate acts that collectively constitute one ‘unlawful

                                               14
employment practice.’” Morgan, 536 U.S. at 117, 122 S.Ct. at 2074, 153 L.Ed.2d at 124

(quoting 42 U.S.C. § 2000e-5(e)(1)). The court stated,

       It does not matter, for purposes of the statute, that some of the component acts
       of the hostile work environment fall outside the statutory time period.
       Provided that an act contributing to the claim occurs within the filing period,
       the entire time period of the hostile environment may be considered by a court
       for the purposes of determining liability.

Morgan, 536 U.S. at 117, 122 S.Ct. at 2074, 153 L.Ed.2d at 124. Nor, the court explained,

does it matter if some time elapses between the earlier and latter occurrences, “so long as

each act is part of the whole,” even if the employee knows that on a specific, earlier day an

actionable claim occurred. Morgan, 536 U.S. at 118, 122 S.Ct. at 2075, 153 L.Ed.2d at 125.

¶44    Applying Morgan here, we examine whether the sexual assault was considered by the

Hearing Examiner to be the sole act of discrimination, or whether the claim is more properly

characterized as a hostile work environment claim. As Darinda and Anderson point out, the

Hearing Examiner concluded, “A sufficiently intrusive unwelcome single incident of sexual

harassment can create a hostile work environment.” See Richardson v. New York State Dept.

of Corr. Serv. (2d Cir. 1999), 180 F.3d 426, 437; Lockard v. Pizza Hut, Inc. (10th Cir. 1998),

162 F.3d 1062, 1072; DiCenso v. Cisneros (7th Cir. 1996), 96 F.3d 1004, 1008. However,

and significantly, the Hearing Examiner went on to conclude that Anderson’s conduct after

the 1998 Christmas party achieved the “extreme degree of offensiveness” necessary to

establish a hostile work environment, and that Darinda illegally discriminated against

Benjamin by relying upon and supporting Anderson and failing to investigate or rectify the

situation from December 1998 through March 29,1999.

                                             15
¶45    Notably, the Hearing Examiner found that from the 1998 Christmas party until

Benjamin’s termination, “Anderson engaged in a continuous course of conduct aimed at

exploiting Benjamin, sexually harassing her and preventing her from taking any effective

action to render him accountable for his conduct. . . .” Additionally, the Hearing Examiner

found that Anderson, Darinda, and Michael “engaged in a continuous course of conduct

aimed at avoiding any investigation or action regarding Anderson’s conduct toward

Benjamin, and thereby permitted him to continue to harass her.” The Hearing Examiner

further noted that, although Anderson did not have another opportunity to engage in similar

behavior with Benjamin as he had after the Christmas party, he continued to seek

surreptitious, unwelcome sexual contact with Benjamin within the work environment, and

that this was a “continuing problem” until Benjamin’s termination.

¶46    Applying the rationale of Morgan, we conclude that the Hearing Examiner did not err

in characterizing Benjamin’s claim as one arising out of a series of violations as opposed to

one isolated and discrete act. As the U.S. Supreme Court explained in Morgan, 536 U.S. at

118, 122 S.Ct. at 2075, 153 L.Ed.2d at 125, the entirety of a hostile work environment claim

is actionable even though an employee may reasonably have realized that he or she had an

actionable claim at an earlier date, so long as the hostile work environment continued to a

point in time that lies within the statutory time limits for filing a claim.

¶47    Because the hostile work environment continued to a point in time within the 180-day

statute of limitations, the District Court did not err in concluding that Benjamin’s claim was

timely filed.

                                               16
                                       ISSUE TWO

¶48    Did the District Court err when it concluded that sexual harassment had occurred,

without making an explicit finding that the alleged sexual harassment was sufficiently severe

or pervasive as to alter Benjamin’s conditions of employment and create an abusive work

environment?

¶49    Darinda and Anderson argue that any sexual harassment in Benjamin’s case was

limited to the incident between Benjamin and Anderson during the drive home after Joker’s

Wild’s 1998 Christmas party. They claim that this incident did not occur at work and had

nothing to do with Benjamin’s employment at Joker’s Wild, and thus the District Court

erroneously upheld the HRC’s affirmance of the Hearing Examiner on this issue. They

further argue that the Hearing Examiner failed to find that the alleged sexual harassment of

Benjamin was so severe or pervasive as to alter Benjamin’s conditions of employment and

create an abusive work environment, and thus the conclusion that sexual harassment had

occurred at Joker’s Wild is unsupported.

¶50    Darinda and Anderson claim that the District Court’s decision in this case it at odds

with our holding in Beaver v. DNRC, 2003 MT 287, 318 Mont. 35, 78 P.3d 857. In Beaver,

a seasonal employee at the Department of Natural Resources and Conservation traveled out

of town with her supervisor for what was supposed to be a day trip. Beaver, ¶¶ 9-10.

Because they had not completed their work by day’s end, they stayed in a motel overnight,

and shared a room because the supervisor informed Beaver that it was the only room

available. Beaver, ¶ 11. During the night, her supervisor sexually assaulted Beaver. Beaver,

                                             17
¶ 15. Beaver filed a claim with the HRC, and later initiated a lawsuit in which she alleged

that she was ultimately given a less favorable seasonal position in retaliation for filing a

complaint with the HRC. Beaver, ¶ 23.

¶51    In Beaver, we affirmed the District Court’s holding that Beaver could not prevail on

her claim of discrimination on the basis of a hostile work environment, because she failed

to prove that the single incident of sexual harassment, which took place away from the

normal workplace, was so severe or pervasive as to alter the conditions of her employment

and thus create an abusive working environment. Beaver, ¶ 25. Darinda and Anderson

argue that, as in Beaver, although Benjamin was the victim of a sexual assault, that single

act occurred away from the workplace and thus is not sufficient to establish a claim of sexual

harassment.

¶52    Darinda and Anderson fail to acknowledge the critical distinction between Beaver and

the case at hand--the employers’ responses upon learning of the sexual assault allegations.

In Beaver, from the moment that Beaver reported the assault to her assailant’s direct

supervisor, she had no more contact with her assailant. Beaver, ¶ 18. He was immediately

suspended without pay. Beaver, ¶ 18. The management recommended his termination, and

he resigned shortly thereafter, while still on suspension. Beaver, ¶ 18. The District Court

noted that the assailant’s conduct was an isolated incident and there was no evidence of prior

sexual offenses in the department by him or by anyone else. Beaver, ¶ 32. Thus, as the

District Court noted, the department took immediate action to protect Beaver and to prevent

further misconduct by her supervisor. Beaver, ¶ 32. This is in marked contrast to

                                             18
Benjamin’s situation, in which no disciplinary action was ever taken against Anderson and

Anderson continued to supervise Benjamin even after Darinda, Michael, and Dick were made

aware of the incident following the 1998 Christmas party. In further contrast to the situation

in Beaver, here there had been at least one prior reported incident of sexual harassment at

Joker’s Wild in the months before the Christmas party, and Joker’s Wild had no sexual

harassment policy in place.

¶53    In Beaver, we relied in part upon Harris v. Forklift Systems, Inc. (1993), 510 U.S. 17,

114 S.Ct. 367, 126 L.Ed.2d 295, in which the U.S. Supreme Court concluded that the correct

legal standard to be applied in determining whether an environment is “hostile” or “abusive”

is to view the totality of the circumstances. These circumstances may include the frequency

of the discriminatory conduct; its severity; whether it is physically threatening or humiliating,

or a mere offensive utterance; and whether it unreasonably interferes with an employee’s

work performance. The effect on the employee’s psychological well-being is also relevant

in determining whether the employee actually found the environment abusive. Beaver, ¶ 42

(quoting Harris, 510 U.S. at 23, 114 S.Ct. at 371, 126 L.Ed.2d at 302-03).

¶54    Here, as the District Court noted,

       the culpable acts of continuing discrimination in the work place primarily took
       the form of the employer’s failure to seriously and adequately investigate and
       discipline Jerry Anderson following the assault and the employer’s subsequent
       failure to protect Nina [Benjamin] on the job. Rather, the Hearing Examiner
       found that the employer continued to let Jerry supervise Nina on the job and
       began collecting and even creating evidence against Nina in an attempt to
       justify firing Nina for poor work habits, when in fact the employer’s motive
       was to avoid legal problems arising from Jerry Anderson’s illegal sexual


                                               19
       behavior toward Nina that could interfere with a one and a half million dollar
       purchase of the business and state gaming and liquor licenses. . . .

¶55    Having established that such findings exist, we turn to the record to determine

whether these findings are supported by substantial credible evidence. Total Mechanical,

¶ 22. It is important to note that our standard is not whether there is evidence to support

findings different from those made by the trier of fact, but whether substantial credible

evidence supports the trier’s findings. Taylor v. State Compensation Ins. Fund (1996), 275

Mont. 432, 440, 913 P.2d 1242, 1246 (citations omitted). Arguably, there was evidence to

support Darinda’s and Anderson’s assertions. However, there was also substantial credible

evidence at the contested case hearing to support the findings made by the Hearing

Examiner. Thus, these findings should not be disturbed. Nor do we conclude that the

Hearing Examiner or HRC misapprehended the effect of this evidence, or that a mistake has

been make. Total Mechanical, ¶ 22.

¶56     Finally, we consider whether the District Court erred as a matter of law when it

upheld the HRC’s conclusions. We view the totality of the circumstances to determine

whether a work environment is “hostile” or “abusive.” Beaver, ¶ 42. Given the totality of

the circumstances described above, we conclude that the legal conclusion that the work

environment was “hostile” and “abusive” was supported by the evidence. Therefore, we

conclude the District Court did not err in upholding the findings and conclusions of the Final

Agency Decision.

                                      ISSUE THREE


                                             20
¶57    Did the District Court err when it upheld damages for lost wages?

¶58    Darinda and Anderson next argue that the District Court erroneously upheld the award

of backpay and frontpay to Benjamin because Benjamin did not demonstrate that she was

terminated from Joker’s Wild because of sex discrimination. Darinda and Anderson assert

that “all of the evidence” demonstrates that Benjamin was terminated because of poor job

performance.

¶59    Again, we will not re-weigh the evidence. There exists in the record substantial

credible evidence to support the conclusion that Benjamin was terminated because of illegal

discrimination and not because of poor work performance. Thus, the District Court did not

err in upholding this portion of the agency’s decision.

                                      ISSUE FOUR

¶60    Did the District Court err when it concluded that Benjamin’s wage loss recovery

should not be reduced for failure to mitigate?

¶61    Darinda and Anderson argue that the Hearing Examiner erred by concluding that

Benjamin’s delay in returning to work was reasonable under the circumstances. Darinda and

Anderson claim there is no evidence to support such a conclusion, and that Benjamin’s own

testimony contradicts the Hearing Examiner’s finding that her delay in seeking employment

was due to her “debilitated emotional condition.” Although Benjamin alleged in her

testimony that she did not seek employment after her termination because she had lost her

self-confidence, she had stated in an earlier deposition that she did not immediately seek

employment because she traveled with her new husband, Bud Benjamin, and assisted her

                                            21
daughter with wedding preparations, and then was busy setting up her new household in

Seattle once she and Bud relocated there.

¶62    In a claim for lost wages before the HRC, a claimant must take reasonable steps to

mitigate his or her damages. Hulett v. Bozeman School Dist. No. 7 (1987), 228 Mont. 71,

73, 740 P.2d 1132, 1134. This standard has been defined as a duty to do what an ordinarily

prudent person would do under the circumstances. Hulett, 228 Mont. at 73, 740 P.2d at 1134

(citation omitted). Once a complainant has established a prima facie case of discrimination

and established the amount of her damages resulting from this discrimination, the burden

then shifts to the defendant to prove by clear and convincing evidence that a lesser amount

is proper. P.W. Berry Co., Inc. v. Freese (1989), 239 Mont. 183, 187, 779 P.2d 521, 523-24

(citations omitted). In the Final Agency Decision, the Hearing Examiner concluded that

Darinda and Anderson did not meet this burden, noting that Benjamin was not obligated to

seek out all possible employment opportunities, but needed only to be reasonable in pursuing

offers of employment, as we noted in Hulett.

¶63    While Darinda and Anderson dispute that Benjamin’s “debilitated emotional

condition” was, in fact, the reason why she did not immediately seek new employment, they

do not dispute that Benjamin was emotionally debilitated. Although they are correct that

some testimony supports their assertion, our review of the record likewise reveals that

substantial credible evidence--including medical testimony as well as Benjamin’s own

testimony concerning her loss of confidence in herself and her anxiety and reluctance to meet

new people--also supports the Hearing Examiner’s findings. As long as the Hearing

                                             22
Examiner’s findings are supported by substantial credible evidence, we will not disturb them.

Thus, we affirm the District Court in its refusal to do so.

                                        ISSUE FIVE

¶64    Did the District Court err when it re-imposed the Hearing Examiner’s award for

emotional distress, and refused to strike the award of damages altogether?

¶65    Darinda and Anderson argue that the District Court erred by reimposing the Hearing

Examiner’s award of $75,000 as compensation for emotional distress, after the HRC reduced

it to $40,000, because it is the HRC and not the Hearing Examiner who has the authority to

set the amount of compensatory damages. However, they also maintain it was error for the

HRC to award any compensatory damages because Benjamin’s claim was based upon a

diagnosis of Post-Traumatic Stress Disorder (“PTSD”), and that diagnosis was based upon

Benjamin’s claim that she had been sexually assaulted by Anderson after the 1998 Christmas

party. Darinda and Anderson claim that no evidence exists that Benjamin suffered emotional

distress from any incident concerning Joker’s Wild other than the sexual assault, and since

the sexual assault occurred more than 180 days before she filed her complaint, her recovery

of damages as a result of the assault is time-barred.

¶66    Benjamin responds that the District Court was correct to affirm the award of

emotional distress damages in the Final Agency Decision and reverse the HRC’s reduction,

because it was an error of law for the HRC to substitute its judgment for that of the agency.

See Moran, 270 Mont. at 51, 889 P.2d at 1187 (an agency’s reversal of a hearing examiner’s

findings cannot survive judicial review unless the court determines as a matter of law that

                                              23
the hearing examiner’s findings are not supported by substantial evidence). She further

responds that the evidence showed that her emotional distress did not occur merely as a

result of the sexual assault, but rather occurred as a result of a combination of the assault and

the subsequent adverse actions by Anderson and the rest of the Joker’s Wild management.

¶67    Benjamin suffered from sleep disturbances, low energy, lack of motivation and

initiative, inability to experience pleasure or interest in things, cessation of her usual

activities, apathy, guilt, shame, a decline in self-esteem, lack of self-confidence, memory

difficulties, concentration difficulties, and weight gain. She further experienced nightmares

and flashbacks to the assault after the Christmas party, and to Anderson’s subsequent

conduct toward her at work. She testified that she has experienced substantial anxiety, feels

unable to trust people, and has distanced herself from others. After she relocated with Bud

to the State of Washington, Benjamin sought psychiatric care and therapy once Bud’s new

health insurance coverage became available. She was ultimately diagnosed with PTSD.

¶68    After citing evidence presented by Benjamin and two of her mental health care

providers, the District Court noted that the defendants did not present any evidence to rebut

their testimony. Because the HRC did not cite any evidence to support its decision to reduce

the amount of the emotional distress award, aside from the vague feeling of some

Commissioners that it was too high, the District Court concluded that, although the HRC

does have the statutory authority to reduce an award, this reduction was arbitrary and thus

the HRC abused its discretion. The court then reinstated the Hearing Examiner’s award of

$75,000.

                                               24
¶69   Notably, in the Final Agency Decision, the Hearing Examiner found that Benjamin

developed clinical depression and PTSD as a result of Anderson’s and Darinda’s continuing

conduct toward her from December 1998 through March 29, 1999. The Hearing Examiner

further found that her PTSD symptoms were aggravated by her employer’s hostile treatment

of her and her subsequent termination, and that this in turn caused her deepening and

enduring depression. The Hearing Examiner concluded that Benjamin proved that she

suffered severe emotional distress because of Anderson’s and Darinda’s continuing conduct,

and that such distress is compensable. The Hearing Examiner further concluded that

Benjamin developed serious psychological problems after she lost her job because of the

failure of Joker’s Wild’s owners and management to address the sexual assault and their

continuing course of discriminatory conduct against Benjamin.

¶70   In human rights cases, compensatory damages may be awarded for humiliation and

emotional distress established by testimony or inferred from the circumstances. Vortex

Fishing Systems, Inc. v. Foss, 2001 MT 312, ¶ 33, 308 Mont. 8, ¶ 33, 38 P.3d 836, ¶ 33

(citing Johnson v. Hale (9th Cir. 1991), 940 F.2d 1192, 1193). While Darinda and Anderson

argue that the Hearing Examiner based the entirety of the emotional distress claim on the

December 1998 assault, the Hearing Examiner’s findings indicate otherwise. Furthermore,

Darinda and Anderson provide no support for their contention that the Hearing Examiner

does not have the authority to award compensatory damages. Our review of the record

shows that the Hearing Examiner’s findings are supported by the testimony of Benjamin, her




                                           25
expert witnesses, and others, and that the HRC’s reduction of the Hearing Examiner’s award

of damages was arbitrary. Thus, we affirm the District Court on this Issue.

                                       ISSUE SIX

¶71    Did the District Court err when it concluded that Dick was not the employer or an

agent of the employer of Benjamin?

¶72    Benjamin cross-appeals the dismissal of Richard “Dick” Williams from this lawsuit

and argues that the District Court erred when it upheld that portion of the Final Agency

Decision which concluded Dick did not illegally discriminate against Benjamin. She claims

Dick was involved in every important decision made concerning Joker’s Wild from

December 1998 through March 1999. She points out that he had continuous general

authority to conduct business on behalf of Joker’s Wild and participated directly in the

establishment’s key personnel actions, including its handling of all complaints of sexual

harassment and the decision not to investigate Anderson’s alleged harassment of Benjamin.

Benjamin further claims that Dick played a “key role” in her firing.

¶73    The Hearing Examiner found that during Benjamin’s employment at Joker’s Wild,

Dick was an active adviser to Darinda, Michael, and Anderson, who relied upon Dick’s

expertise in personnel matters, including dealing with complaints of sexual harassment. The

Hearing Examiner further found that Dick held an ownership interest in the name “Joker’s

Wild,” that he had held an ownership interest in three casinos other than Joker’s Wild since

1998, and that he acted as an adviser and consultant to two other casinos which were owned

by members of his family. The Hearing Examiner noted, “Darinda Williams made no

                                            26
ownership decisions of import regarding Joker’s Wild without consultation with her husband

[Dick].” The Hearing Examiner also found that “Dick Williams had authority to conduct

business for Joker’s Wild with or without consulting with Darinda Williams.”

¶74    The Hearing Examiner further noted that in two other sexual harassment incidents at

Joker’s Wild, the victim sought help from Dick rather than reporting the matter to Darinda,

Michael, or Anderson. Darinda testified that she believed that any employees that had

problems at Joker’s Wild would talk to her, Anderson, Michael, or Dick. However, the

Hearing Examiner found that it was Mike and Darinda who reviewed surveillance tapes of

Benjamin’s shifts, Mike who spoke to Benjamin about failing to provide service to a

customer, and Mike who terminated Benjamin’s employment. The Hearing Examiner also

found that it was the continuing course of conduct by Anderson and Darinda that led to her

discharge, emotional distress, and subsequent losses.

¶75    Ultimately, the Hearing Examiner concluded that Dick’s conduct and apparent

authority was not sufficient to render him a co-owner or operator of Joker’s Wild, nor was

he acting as Darinda’s agent. Thus, the Hearing Examiner concluded that Dick was entitled

to dismissal from this suit.

¶76    The Human Rights Commission affirmed Dick’s dismissal without comment. The

District Court noted that Benjamin’s contention that Darinda did not make any significant

decisions involving Joker’s Wild without first conferring with Dick, and that Dick

furthermore had the authority to make decisions and conduct business on behalf of Joker’s

Wild without conferring with Darinda was supported by the record. However, the court

                                            27
further explained that, while the record contained credible evidence that Dick was actively

involved in legal and business decisions and activities involving Joker’s Wild, there was

nonetheless credible evidence to support the contention that Darinda frequently consulted

with Dick not because he was an “owner,” but because he was experienced in the liquor and

gaming industry. The District Court concluded that it would not overrule the conclusion of

the Hearing Examiner and the Human Rights Commission that Dick was not a de facto

owner of Joker’s Wild because this conclusion was supported by substantial credible

evidence.

¶77    We conclude that the District Court did not err in upholding the Hearing Examiner’s

conclusion that Dick was properly dismissed as a party defendant. As we have already

explained in ¶ 55 of this Opinion, we will not disturb findings made by a Hearing Examiner

so long as substantial credible evidence supports those findings. Such evidence exists here.

Thus, we affirm the District Court on this Issue.




                                            28
                                   CONCLUSION

¶78   For the above-stated reasons, we affirm the Order of the District Court.



                                                             /S/ PATRICIA O. COTTER

We Concur:

/S/ JOHN WARNER
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART




                                           29
Justice Jim Rice dissenting.

¶79    I respectfully dissent.

¶80    Under Issue 1, I believe the United States Supreme Court’s holding in Morgan

requires this case be reversed and remanded for further proceedings.

¶81    The Court disagrees with the Appellants’ assertion that the sexual assault incident

formed the basis of the Hearing Examiner’s decision, believing it is more accurate to state

that the incident was itself sufficient to constitute sexual discrimination, but that even more

discrimination followed thereafter. See ¶ 38. Even if that assessment was correct, however,

it would not alter the mandatory application of the statute of limitations to the assault

incident as a “discrete act.” As the Court said in Morgan, “discrete discriminatory acts are

not actionable if time barred, even when they are related to acts alleged in timely filed

charges. Each discrete discriminatory act starts a new clock for filing charges alleging that

act.” Morgan, 536 U.S. at 113, 122 S.Ct. at 2072, 153 L.Ed.2d at 122 (emphasis added).

Here, the time clock began running for the assault incident in December of 1998 and ran 180

days later, prior to the filing of Benjamin’s complaint.

¶82    Discussing Morgan’s argument (similar to the one Respondent advances here) that he

had suffered multiple acts that constituted one “unlawful employment practice” under Title

VII, the Court stated that “[t]here is simply no indication that the term ‘practice’ converts

related discrete acts into a single unlawful practice for the purposes of timely filing. . . . We

have repeatedly interpreted the term ‘practice’ to apply to a discrete act or single

‘occurrence,’ even when it has a connection to other acts.” Morgan, 536 U.S. at 111, 122


                                               30
S.Ct. at 2071, 153 L.Ed.2d at 120-21. The Court then specifically reversed the holding of

the Ninth Circuit Court of Appeals which had concluded that “so long as one act falls within

the charge filing period, discriminatory and retaliatory acts that are plausibly or sufficiently

related to that act may also be considered for the purposes of liability.” Morgan, 536 U.S.

at 114, 122 S.Ct. at 2072, 153 L.Ed.2d at 122. Thus, I believe our Court errs today by

similarly concluding that “so long as each act is part of the whole,” quoting Morgan, a claim

may include a time-barred discrete incident. See ¶ 43. The Court errs by relying on this

Morgan quote because the quote was referring to hostile environment claims wherein all the

incidents were non-discrete in nature. See Morgan, 536 U.S. at 118, 122 S.Ct. at 2075, 153

L.Ed.2d at 125.

¶83    It is not disputed that the sexual assault incident was a discrete act, which the Hearing

Examiner found “was extremely severe and sufficiently intrusive and unwelcome” on its own

to create a hostile work environment. (“Discrete acts . . . are easy to identify. Each incident

of discrimination . . . constitutes a separate actionable ‘unlawful employment practice.’”

Morgan, 536 U.S. at 114, 122 S.Ct. at 2073, 153 L.Ed.2d at 122.) However, the Hearing

Examiner erred by attempting to submerge this discrete incident into the claim as a whole

for purposes of the statute of limitations: “The acts of discrimination occurring outside of the

limitations period–the original acts of sexual harassment by Anderson . . .–were sufficiently

related to those occurring within the limitations period . . . .” In my view, the District Court

and this Court make the same error.




                                              31
¶84   Morgan clarified, however, that evidence of such time-barred discrete incidents are

admissible to support an otherwise timely claim:

      The existence of past acts and the employee’s prior knowledge of their
      occurrence, however, does not bar employees from filing charges about related
      discrete acts so long as the acts are independently discriminatory and charges
      addressing those acts are themselves timely filed. Nor does the statute bar an
      employee from using the prior acts as background evidence in support of a
      timely claim.

Morgan, 536 U.S. at 113, 122 S.Ct. at 2072, 153 L.Ed.2d at 122 (emphasis added).

¶85   The decision of the HRC was heavily premised on a discrete incident which was time-

barred. A claim cannot be made for that incident. I would reverse and remand for further

proceedings in which the incident could not be part of the claim, but about which evidence

could be introduced in support of remaining claims.



                                                       /S/ JIM RICE




                                           32
