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Preston & Scott Wins Major Sexual Harassment Trial

Preston & Scott successfully defended Frank’s Westates Services, Inc., a Utah company that provides services to the oil industry, and its president, Gene McFarland, against claims of hostile work environment sexual harassment and intentional infliction of emotional distress, asserted by four women who formerly worked for Frank’s. The four plaintiffs, Monica James, Bernadette Hoffman, Lorrie Moore and Tiara Prisbrey, each alleged that Gene McFarland, Frank’s President, had sexually harassed them while they were employed at Frank’s.

This case went to trial in February 2011 in the United States District Court for the District of Utah where, after hearing the evidence, the jury found in favor of McFarland and Frank’s. The jury took less than three hours to deliberate and answer 32 questions, “No,” thereby rejecting every one of the claims asserted by each plaintiff. As the federal judge later noted in his ruling on plaintiffs’ post-trial motions, the jury found that each woman “failed to prove every element of her every claim . . . .” The jury’s verdict, as well as the evidence at trial, part of which is summarized below, fully vindicated Frank’s and McFarland.

To prevail on a hostile work environment claim, a plaintiff must prove that she was subjected to sexual harassment that was sufficiently severe or pervasive to alter the conditions of the alleged victim’s employment and create an abusive working environment. In an effort to support their claims, each of the four women alleged that McFarland had sexually harassed a number of other women besides themselves. McFarland and Frank’s adamantly denied these allegations and sought to exclude evidence of such conduct on the grounds that plaintiffs could not show that they were personally aware of this other alleged conduct during the period that they were allegedly being harassed.

The federal judge agreed and ruled that before any evidence could be offered of McFarland’s alleged conduct towards other women, plaintiffs had to show that they had either observed the conduct in question, or were informed of the conduct from a credible source, while they were employed at Frank’s. Otherwise, the judge reasoned, the conduct could not have impacted the work environment of any of the four women. Based on each plaintiff’s failure to satisfy this burden of proof, the federal judge excluded evidence regarding a number of alleged acts by McFarland.

The trial in this case illustrated the importance of the credibility of the parties. At the trial there was significant evidence offered to undermine the credibility of each plaintiff. It was repeatedly shown that each plaintiff’s testimony at trial was dramatically inconsistent with her prior sworn deposition testimony, and that some of the plaintiffs’ testimony was significantly embellished at trial.

For example, Monica James testified at trial that McFarland repeatedly stuck his wet finger in her ear. By contrast, in her deposition, she had previously testified that McFarland had “tried” to stick his finger in her ear, but he never actually did so. McFarland denied the allegations completely and stated that it would have been impossible for him to have done this given James’ long hair that covered her ears. At trial, Lorrie Moore testified that Mr. McFarland told her sexual stories that made her feel uncomfortable and when asked how frequently this happened, she responded, “it was too numerous to count.” By contrast, in her deposition, given three years before, she said that it had only happened twice, that McFarland stopped doing it after she told him she did not like the stories, and that she could not even remember anything about the stories McFarland allegedly told her. McFarland denied ever doing this and his testimony was confirmed by several other employees.

Bernadette Hoffman testified at trial that McFarland would frequently “leer” at her and “sexually undress her with his eyes.” She also described with great emotion how distressed she was when she was in the office one day and McFarland “sexually undressed her six-year old daughter with his eyes.” By contrast, she never even related these incidents in her deposition despite being asked repeatedly to detail each and every incident of harassment she experienced. In her deposition, she never even used the words “leer,” “leered,” or “leering,” nor did she ever use the words “undressed” or “eyes.” Moreover, in her deposition (which was videotaped and shown to the jury) she did say, in a matter-of-fact tone of voice with no emotion, that one day when she was walking through the office with her six-year old daughter, McFarland told her that her daughter “was as cute as you are,” but there was no mention of the 87-year old McFarland “leering” at her daughter or “sexually undressing her with his eyes.” More importantly, she had to admit that she did not disclose these incidents when she called Frank’s Houston office to complain about McFarland. Hoffman insisted at trial that the incident involving her six-year old daughter occurred weeks after she had called the Houston office, but in her deposition she said that the time Gene commented on how cute her daughter was occurred just as she was walking through the office to make the call to Houston.

By contrast, McFarland’s testimony at trial was entirely consistent with his deposition, as was the testimony of all of Frank’s witnesses who had previously been deposed. One dramatic incident at trial which illustrated the respective credibility of the witnesses occurred when Monica James testified that McFarland had whistled at her one day as she walked into the shop. The testimony at trial established that McFarland, however, cannot whistle because he has no feeling in his upper lip due to an injury he received during World War II, when he took shrapnel to the face from a Japanese bomb while serving on the U.S.S. Enterprise in 1942.

The trial also illustrated the value of credible, corroborating witnesses. There were a number of instances where witnesses failed to corroborate plaintiffs’ version of events, whereas the witnesses did support McFarland’s version of what happened. For example, the plaintiffs claimed that McFarland had grabbed the breast of another employee. The employee in question, however, appeared at the trial and adamantly denied that McFarland had done any such thing. Similarly, the plaintiffs alleged that McFarland had grabbed the buttocks of another female employee, and plaintiffs also alleged that this employee was seen lying across McFarland’s desk with her breasts hanging out. The woman in question, however, who no longer works for Frank’s, traveled from Tennessee to appear at the trial where she flatly denied these allegations and she confirmed that McFarland had never acted in an inappropriate manner towards her.

While Frank’s was able to call numerous witnesses who supported their version of the facts, plaintiffs only offered four witnesses other than themselves. Frank’s, however, introduced substantial evidence showing bias on the part of these witnesses and/or a lack of credibility. For example, Frank’s established that one of the witnesses whose deposition was read by plaintiffs was the lover of one of the plaintiffs, was a close friend of another plaintiff, and there was also evidence offered that this witness wanted to remove McFarland so he could take over as President of Frank’s.

The credibility of another witness whose deposition was offered by plaintiffs was severely challenged when Preston & Scott was able to establish that this witness was a convicted felon who suffered from drug addiction, and he was unavailable to testify at trial because he was back in jail facing 30 first degree felony charges. Another witness called by plaintiffs was a former employee who embezzled several thousand dollars from Frank’s, for which she was criminally prosecuted.

By contrast, Frank’s and McFarland called a number of witnesses, some who had travelled long distances to appear at the trial, who testified that they had personally heard the plaintiffs say that they had concocted the allegations against McFarland in an effort to get some of “the old man’s money,” and to “bring him down.” Several of these witnesses also disputed plaintiffs’ version of the facts regarding specific allegations against McFarland and there was substantial evidence offered regarding the fact that several of the plaintiffs engaged in discussions and conduct of a sexual nature. For example, one former male employee testified that Bernadette Hoffman said to him on more than one occasion, that he needed to see “a photo of her ass, because she had a banging ass.”

Another example of lack of plaintiffs’ credibility occurred when Tiara Prisbrey alleged that McFarland walked in on her while she was sitting on the toilet. She claimed that McFarland refused to leave and stood there for a long period of time watching her until she stood up, and that this incident was a devastating experience to her that left her shaken and crying. Prisbrey testified that she was using a bathroom that both sexes used and that the restroom was not labeled “Men’s.” Numerous other witnesses, however, testified that the restroom in question was clearly labeled “Men’s” and had been so designated years before the incident occurred. McFarland testified that he opened the door to use the “Men’s” restroom, saw Prisbrey and immediately slammed the door and walked in the dispatch office and exclaimed, “What in the hell is she doing in the Men’s restroom.” Another employee was in the dispatch office when the incident occurred and he confirmed McFarland’s testimony and further testified that, after McFarland left, Prisbrey exited the restroom and walked into the dispatch office, and that Prisbrey did not seem upset about what had happened, but she laughed and joked about the incident.

In light of the jury’s quick verdict in favor of McFarland and Frank’s, it is clear that the jury did not believe the plaintiffs’ version of what happened.

Representative Work

In September, 2013, Mr. Preston won a summary judgment on behalf of an accounting firm regarding a dispute over the interpretation of a contract regarding the purchase of the practice of a group of accountants, wherein the Court granted Mr. Preston’s client its attorneys’ fees and costs.

In August, 2013, Mr. Preston successfully won an arbitration hearing in Des Moines, Iowa, involving breach of contract claims between two agricultural cooperatives, where the arbitration panel awarded over $4.6 Million in net damages to Mr. Preston’s clients.

In early 2013, Mr. Preston won summary judgment against a Utah automotive services company for breach of lease agreement in Las Vegas, Nevada, which resulted in an award of damages and attorneys’ fees in excess of $1 Million.

In an administrative trial, Mr. Preston successfully defended Orem City in its termination of a police officer for use of excessive force. Mr. Preston subsequently prevailed on an appeal of this decision to the Utah Court of Appeals in 2012, which was later affirmed by the Utah Supreme Court in 2013.

In 2011, Mr. Preston won a federal court trial on behalf of a company and its president, who were sued for sexual harassment by four women employees, where the jury answered all 32 questions on the verdict in favor of Mr. Preston’s clients.

In 2010, Mr. Preston played a leading role in obtaining a remarkable result on behalf of a Fortune 500 company in a $60 Million lawsuit against a competing company on claims for breach of contract, copyright and trademark infringement, Lanham Act violations, unfair competition, and misappropriation of trade secrets and confidential information. After an evidentiary hearing on his client’s spoliation motion, the federal court struck defendants’ answer and counterclaims, entered default judgment against defendants as to liability, and recommended that defendants’ key corporate executives be referred to the U. S. Attorneys’ office for criminal investigation and prosecution.

Mr. Preston handled seven lawsuits involving claims of fraud and breach of contract, various shareholder derivative claims, and claims for corporate dissolutions, wherein the various parties were fighting over the ownership of what turned out to be one of the most profitable natural gas fields in Utah history. Mr. Preston’s clients had invested $60 Million in developing this field without obtaining any significant return on their money. Through the lawsuits handled by Mr. Preston, his clients obtained a majority interest in this field, thereby enabling them to sell their interest for $400 million in 2008.

In 2006, Mr. Preston successfully handled a two-week federal court jury trial where the jury awarded Mr. Preston's clients a $5.2 million jury verdict on a breach of a contract claim involving stock ownership in a well-known national firm of forensic economists.

In 2005 Mr. Preston was retained to defend certain principals of a highly successful venture capital company in a lawsuit that asserted claims of fraud and breach of fiduciary duty in an effort to divest Mr. Preston’s clients of their one-half ownership interest in the $100 million company. After several months of intense work, Mr. Preston and his team were able to successfully settle this claim on terms that were extremely favorable to his clients.

In 2004, Mr. Preston represented Center 7, a Canopy Group company, in a business tort, unfair competition and breach of contract case against Computer Associates. During the course of discovery, Mr. Preston took the depositions of many of the top executives of Computer Associates, including Sanjay Kumar. Mr. Preston obtained a settlement in the amount of $40 Million for his client in 2004, shortly after a jury had been selected in federal court.

In 2002, Mr. Preston won a federal court jury trial on behalf of a high school teacher who had been removed as the head football coach of a major high school in Salt Lake City. Mr. Preston successfully won a “class of one” equal protection claim, as well as a false light claim, wherein the jury awarded Mr. Preston’s client several hundred thousand dollars, and Mr. Preston recovered his clients costs and attorneys’ fees in this case.

In 2013, Mr. Preston was lead trial counsel in Lantec v. Novell, a federal court antitrust and business tort lawsuit arising out of the Novell/WordPerfect merger. The plaintiffs, group of Brazilian companies, sought over $500 million in damages and the divestiture of one of Novell’s core businesses. Mr. Preston successfully obtained summary judgment in favor of Novell on all of the plaintiffs’ business tort claims. The remaining antitrust claims went to trial in 2001 where, after six weeks of trial, plaintiffs rested their case and the federal court granted Mr. Preston’s motion for a directed verdict on all of plaintiffs’ claims. In a subsequent trial on Novell’s counterclaim, the court awarded $7 Million in damages to Novell. Mr. Preston handled plaintiffs’ subsequent appeal where the Tenth Circuit Court of Appeals affirmed the decision in favor of Novell on all points in 2002.