Opinion

Audrey Korshoff v. Wesley Financial Group, LLC

Court
Court of Appeals of Tennessee
Filed
Feb 6, 2024
Status
Published
Cited by
0 cases
Authority
More cited than 15.0%

“It is not the role of the courts, trial or appellate, to research or construct a litigant’s case or arguments for him or her, and where a party fails to develop an argument in support of his or her contention or merely constructs a skeletal argument, the issue is waived.”

How later courts described this case

  • “It is not the role of the courts, trial or appellate, to research or construct a litigant’s case or arguments for him or her, and where a party fails to develop an argument in support of his or her contention or merely constructs a skeletal argument, the issue is waived.”
  • “For this Court to review the sufficiency of the evidence on appeal, a motion for a directed verdict must have been made at the conclusion of all the proof and renewed in a post judgment motion following the jury’s verdict.”

Written by the judges who cited it.

The opinion

02/06/2024

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

May 2, 2023 Session

AUDREY KORSHOFF ET AL. v. WESLEY FINANCIAL GROUP, LLC

Appeal from the Circuit Court for Williamson County

No. 2020-CV-2 Deanna B. Johnson, Judge

___________________________________

No. M2022-00630-COA-R3-CV

___________________________________

An employer terminated an employee after she requested unpaid commissions pursuant to

her contract. The employee sued her former employer claiming breach of contract, unjust

enrichment, retaliatory discharge, and intentional misrepresentation. She also sought

punitive damages. The jury found in the employee’s favor on all claims and awarded

damages for breach of contract, unjust enrichment, and retaliatory discharge as well as

awarding punitive damages. The former employer sought post-trial relief, arguing the

jury’s verdicts were inconsistent and that the jury’s punitive damages award was in error

and excessive. The trial court concluded the verdicts were consistent but did reduce, while

not eliminating, the punitive damages award. The former employer appeals, challenging

the compensatory and punitive damage awards. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

JEFFREY USMAN, J., delivered the opinion of the Court, in which ANDY D. BENNETT and

W. NEAL MCBRAYER, JJ., joined.

Aubrey B. Harwell, Jr., James G. Thomas, and John E. Quinn, Nashville, Tennessee, for

the appellant, Wesley Financial Group, LLC.

Robert E. Boston, Quynh-Anh D. Kibler, and David J. Zeitlin, Nashville, Tennessee, for

the appellees, Audrey Korshoff and M.K.

OPINION

America’s timeshare industry, which is built upon selling individuals and families

“split ownership” of vacation homes “for a given length of time every year, in perpetuity,”

has grown substantially.1 In response to the “85 percent of timeshare owners who . . .

regret their purchase,” industrious companies have begun marketing timeshare cancellation

services, promising customers to send negotiators to fight to cancel their timeshare.2

Appellant Wesley Financial Group (Wesley) provides such timeshare cancellation

services. This appeal concerns Wesley’s termination of one of its employees, Appellee

Audrey Korshoff.

Ms. Korshoff had a successful marketing career. She worked for Wyndham

Worldwide, a timeshare sales company, before meeting Chuck McDowell, Wesley’s Chief

Executive Officer. In the summer of 2018, Ms. Korshoff suggested to Mr. McDowell that

she might be interested in leaving Wyndham Worldwide to work at Wesley in a sales-based

role. Mr. McDowell welcomed the idea and urged Ms. Korshoff to contact Robin McVey,

the company’s Chief Operations Officer. Ms. Korshoff met Ms. McVey soon thereafter to

discuss her interest in working at the company. She explained during this initial meeting

that she sought a position that could “be paid [at a rate of] $120,000 salary plus

commissions.”3 Ms. McVey told Ms. Korshoff that she “could ‘get there quickly’” but

would first have to spend some time working in a training role. Ms. Korshoff agreed to

work for Wesley initially in a role as a Qualification Specialist in July of 2018. This role

provided Ms. Korshoff with an opportunity to familiarize herself with Wesley’s staff and

internal processes while earning $12 per hour in compensation.

After just three weeks of working in that role, Ms. Korshoff was named “Director

of Business Development.” Ms. Korshoff testified that this was a “new role at the

company” that was created specifically for her. The parties agreed to a new compensation

scheme. Ms. Korshoff began earning a salary of $50,000 per year. In addition to her salary,

the company agreed to pay Ms. Korshoff “$250 in commission on (1) any deal that closed

that she had either called personally and set up an appointment for or (2) for any deal that

closed that was directly attributable to any of the leads she brought in under her new

position, whether she had set the appointment or not.”

1

Megan Cerullo, Timeshares: Everything you need to know before buying in, CBS News (Mar. 30,

2023), https://www.cbsnews.com/news/what-is-a-timeshare-cbs-news-explains/.

2

Christopher Elliott, Trapped in a timeshare? Here’s how to escape, USA Today (Dec. 26, 2018),

https://www.usatoday.com/story/travel/advice/2018/12/26/timeshare-troubles-extricate-unwanted-

unit/2375107002/

3

The record on appeal contains no transcript of the evidence. Instead, Wesley sought to meet its

obligations under Tennessee Rule of Appellate Procedure 24(c) by proposing its own statement of the

evidence. Ms. Korshoff objected, arguing Wesley’s submission was “rife with verifiably inaccurate

statements of fact” and would not “provid[e] ‘a fair, accurate, and complete account of what transpired.’”

Tenn. R. App. P. 24(c). She also proposed an alternative Rule 24 statement of the evidence. The trial court

entered a memorandum and order agreeing with Ms. Korshoff, stating “Defendant’s Proposed Statement of

the Evidence utterly fails to ‘convey a fair, accurate, and complete account of what transpired.’”

Accordingly, the trial court accepted Ms. Korshoff’s statement and rejected Wesley’s statement.

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Ms. Korshoff usually earned commissions through one of three different routes.

First, Ms. Korshoff personally organized trade shows and other public events where

individuals could be solicited for the purpose of cancelling their timeshare agreements.

Ms. Korshoff testified that she personally “planned, oversaw, and worked” these public

events. Second, she “built and integrated the Referral Rock program to track and encourage

more leads.” According to Ms. Korshoff, the Referral Rock program was essentially a

referral service, garnering both “B2B (business to business) referrals and B2C (business to

customer) referrals.” Third and finally, Ms. Korshoff also instituted written advertising

campaigns. The most notable written advertising campaign that Ms. Korshoff worked on

during her time at Wesley was with the American Association of Retired Persons (AARP).

She personally oversaw the creation of an advertising campaign with the AARP that began

in November of 2018.

While her business development efforts remained in the formative stage, Ms.

Korshoff approached the company about her financial condition. Though she anticipated

that her efforts would eventually generate significant commissions, Ms. Korshoff, who had

been aiming at a $120,000 salary plus commissions, explained that her $50,000 per year

salary was not enough to support her family as a single mother. At trial, she testified that

Mr. McDowell responded by raising her annual salary to $75,000 per year in September

2018 while leaving her commission payment structure untouched. Ms. Korshoff repeatedly

addressed with Mr. McDowell and Ms. McVey her precarious financial situation.

Though the AARP advertisements initially generated “a slow trickle of business”

when they were mailed out at the end of November, Wesley’s sales increased exponentially

at the beginning of 2019. The growth was so significant that Wesley struggled to manage

it. The company asked Ms. Korshoff if she would “take a ‘pause’ for 60 to 90 days on her

business development efforts . . . [since] the company was already struggling to keep up

with the huge amount of AARP leads and needed some time to make sure [Wesley] could

handle the client load . . . [by] hiring more staff.” Ms. Korshoff agreed to the pause,

declined any invitations from third parties to host additional trade shows beyond those that

had already been scheduled, and ceased outreach related to new written advertising

campaigns, though she continued carrying out her existing obligations. At approximately

the same time, Wesley sent Ms. Korshoff a check for $3,250 on January 25, 2019,

representing all commissions she accrued up to that point.

In March 2019, Ms. Korshoff drafted an invoice to account for the commissions she

believed she had accrued during the company-initiated pause. According to her

accounting, the company owed Ms. Korshoff $35,250 worth of commissions for sales

attributable to her efforts that took place between January 22, 2019, and March 26, 2019.

Ms. Korshoff testified at trial that senior management “avoid[ed] the conversation” after

she submitted her invoice until she was suddenly “pulled into [Mr.] McDowell’s office”

for a meeting with several of her colleagues. At this meeting she was “yelled at and

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belittled . . . for sending the invoice.” After the meeting, instead of backing down, Ms.

Korshoff continued to update her invoice. According to Ms. Korshoff’s updated

calculations, Wesley owed her $60,000 in unpaid commissions for sales attributable to her

that took place between January 22, 2019, and April 30, 2019. Caustic communications

continued from Wesley. Mr. McDowell stated in an email, “[n]obody with a brain would

think it’s fair to pay you to do nothing.”4 Ms. Korshoff objected to Mr. McDowell’s

characterization, considering she had not received a single complaint or reprimand, and

reminded the company of its agreement to pay her commissions based on closed leads.

Ms. Korshoff offered to revise the commission arrangement if it had become

uneconomical or, in the alternative, to train her replacement if the company followed

through on its promise by honoring her updated invoice. Mr. McDowell declined either

option. Mr. McDowell instead inquired about Ms. Korshoff’s attendance habits. Wesley

ultimately tendered Ms. Korshoff a separation notice dated May 1, 2019, that stated she

“was fired based on ‘attendance’ issues” and that “listed her as a ‘Qualification Specialist’

even though her title was Director of Business Development.” The record indicates that

Wesley did not pay Ms. Korshoff any additional commissions as part of her separation or

at any time thereafter.

Ms. Korshoff filed a complaint against Wesley in Williamson County Circuit Court

on January 2, 2020. In it, she pleaded four causes of action: breach of contract, unjust

enrichment, intentional misrepresentation, and retaliatory discharge. She also sought

punitive damages. Ms. Korshoff did not in her complaint describe her breach of contract

and unjust enrichment claims as “alternative” grounds for relief. Ms. Korshoff noted that

her employment contract with Wesley was an oral agreement, but that the company had

initially honored its terms in January 2019. Ms. Korshoff’s minor daughter also brought

claims against Wesley in the trial court based on the company’s refusal to compensate her

for working several trade shows.

On September 9, 2021, Ms. Korshoff submitted a Proposed Joint Pre-Trial

Statement.5 She explained her theory of the case in that statement in part as follows:

“Defendant breached its agreement with [Ms. Korshoff] and Defendant has been unjustly

enriched by [Ms. Korshoff’s] work.” Here, as in the complaint, Ms. Korshoff did not

4

April Poynter, Wesley’s former “Chief People Officer,” testified on cross examination that “[s]he

was not surprised to hear” Mr. McDowell use the phrase “‘anyone with half a brain’ towards [Ms.

Korshoff],” stating, “[T]hat was the culture at the company.”

5

Though Ms. Korshoff attempted to collaborate with Wesley, the company did not assist in the

preparation of this document nor did it submit its own pre-trial statement. Instead, Wesley later provided

the trial court with an “Addendum to the Proposed Pre-trial Statement” in which it articulated its position.

According to this document, Wesley contended that “[a]t no time were the parties operating under a

‘contract’ and [Ms. Korshoff] has no proof of the same.”

-4-

classify these two claims as “alternative” grounds for relief. Ms. Korshoff also identified

various categories of damages she sought, including:

the money [Ms. Korshoff and her daughter were] long owed, their

consequential damages from Defendants’ failure to live up to their word and

wrongful termination of [Ms. Korshoff] (including but not limited to

commission payments and salary [Ms. Korshoff] would have earned had she

not been wrongfully fired and payments to make up for Plaintiffs’ loss [of]

their home), and their punitive damages to punish and deter Defendant from

engaging in similar conduct in the future.

The trial court held a final hearing in this case on September 16-17, 2021. Ms.

Korshoff testified at length. She further updated and quantified her missing commissions,

claiming that she had personally identified 258 pre-termination and 1,897 post-termination

deals that were directly attributable to her advertising and sales efforts. Based on her

calculations, Ms. Korshoff estimated that the company owed her $60,000 in pre-

termination commissions and $474,000 in post-termination commissions.6 Ms. Korshoff

testified that the company’s annual revenue increased from approximately $28.5 million in

2018, the year she was hired, to approximately $104.4 million in 2020, the year she filed

her lawsuit. Ms. Korshoff also entered into evidence “a copy of a 2016 class action

complaint filed in the United States District Court for the Middle District of Tennessee

against [Wesley]” by former employees who alleged the company violated numerous state

and federal statutes, including the Fair Labor Standards Act, by withholding earned wages.

A Williamson County jury found in favor of Ms. Korshoff on all four of her causes

of action. Regarding her breach of contract claim, the jury specifically found that “there

[was] a contract” between Ms. Korshoff and Wesley, that Wesley breached its contract,

and that Ms. Korshoff should be awarded $60,000 in “Unpaid commission damages.”

Although the jury verdict form does not state that these were Ms. Korshoff’s pre-

termination commissions, the jury awarded the same amount in unpaid commissions on

this claim that Ms. Korshoff testified accrued before her termination. Concerning Ms.

Korshoff’s unjust enrichment claim, the jury specifically concluded that Ms. Korshoff

“prove[d] by a preponderance of the evidence all of the elements of her claim” and found

Wesley liable for $201,000. Unlike the breach of contract verdict, these damages are not

explicitly defined to be based on unpaid commissions, and this number represents

6

Mr. McDowell did not attend the final hearing in this case. Neither did Ms. McVey, the

company’s Chief Operations Officer. Though Mr. Chuck McDowell’s son Mr. Charles McDowell testified,

he did not address the merits of Ms. Korshoff’s calculations. Rather, he disputed the premise of her

allegations, i.e., that there was such a commission-based payment structure in place. On cross-examination,

he emphasized, “no one else at [Wesley] had the commission structure of the type that Audrey Korshoff

claimed she was granted. [Wesley] would have owed Audrey Korshoff between $6 million and $30 million

on AARP if Audrey Korshoff’s commission structure were true.” He then asked, “what business person

would do that?”

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approximately 42% of the post-termination commissions she claimed in her trial testimony.

Moving to her retaliatory discharge claim, the jury also concluded that Ms. Korshoff

proved all of the elements and awarded her $18,750. In doing so, the jury specified this

award was for “[o]ther compensatory damages” and was not based upon “[h]er claim for

unpaid commission damages.” Finally, the jury also found Wesley liable for Ms.

Korshoff’s intentional misrepresentation claim but awarded her no further compensation

on that basis.

Additionally, the jury awarded Ms. Korshoff $7.5 million in punitive damages. The

trial court immediately conducted a separate hearing on the appropriateness of the jury’s

punitive damages award, pursuant to Tennessee Code Annotated section 29-39-104(a).

The jury reaffirmed its punitive damages assessment after further deliberations.

After the trial, Ms. Korshoff submitted a Proposed Final Judgment on Jury Verdict

to the trial court, which it ultimately signed on November 10, 2021. The final judgment

reflects the jury’s verdicts on each cause of action raised in her complaint. It also provides

findings of fact and conclusions of law assessing punitive damages. Specifically, the final

judgment devotes separate paragraphs to each of the nine factors identified as relevant for

consideration in a punitive damages case.

Regarding the first factor, i.e., the Defendant’s net worth and financial condition,

the trial court noted that Wesley’s annual revenue now exceeds $100 million. Addressing

the second factor, the objectionable nature of the Defendant’s wrongdoing, the trial court

observed that the attendance excuse used to fire Ms. Korshoff was mere pretext.

Concerning the third factor, whether the defendant was aware of the harm it caused and its

motivations, the trial court observed that Wesley “knew from early conversations . . . that

she was a single mother who was looking to refinance her home” and that it “was motivated

by its motive of retaining all of the profit attributable to” Ms. Korshoff. On the fourth

factor, the duration of and efforts to conceal the Defendant’s misconduct, the trial court

recounted Mr. McDowell’s efforts to withhold Ms. Korshoff’s commissions by raising

unreasonable questions about her attendance despite “admit[ing] in its interrogatories and

through Mr. Charles McDowell . . . on cross-examination, that [Wesley] never wrote [Ms.

Korshoff] up for any infraction, let alone for any ‘attendance’” issues. The trial court stated

that no proof was presented at trial relevant to the fifth factor, the amount of money that

the Plaintiffs spent to recover from their losses. Regarding the sixth factor, the Defendant’s

profit from its misconduct and the potential for punitive damages to deter future

misconduct, the trial court reiterated that trial testimony proved that the company’s annual

revenues increased by at least a factor of four during the time Ms. Korshoff worked for

Wesley and wrote that the company continues to benefit from “the stream of customers

generated from her work.” For the seventh factor, other comparable punitive damages

awards, the trial court stated, “The unrebutted proof . . . at trial was that Defendant fired at

least two other employees when they sought payment for their earned commissions and

that Defendant was sued in a 2018 class action complaint . . . for, among other things, not

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paying ‘all compensation or remuneration as had been promised’ by Defendant.” The trial

court noted that there had not been a punitive damage recovery against Wesley. On the

eighth factor, whether the Defendant attempted to remedy the situation, the trial court

observed that Ms. Korshoff sent Wesley two separate invoices and that the company “[i]n

response . . . sent her a nasty email and then fired her . . . [and has since] t[aken] no steps

at all to remedy the situation or offer [Ms. Korshoff] a prompt and fair settlement for the

actual harm caused to her.” Finally, since the ninth factor accounts for “any other

circumstances” relevant to a punitive damages award, the trial court observed the following

regarding the company’s executives:

The uncontradicted proof presented to the jury established that Defendant

through Chuck McDowell would insult and belittle Defendant’s employees,

and even Defendant’s witness April Poynter, Defendant’s former Chief

People Officer, admitted that such was the culture in the workplace. To avoid

paying its employees their earned commissions, Defendant would fire its

employees. Defendant’s main witnesses, namely Robin McVey and Chuck

McDowell, did not even appear at trial. Chuck McDowell did not appear at

trial because he was on vacation in Africa, giving the Court and the jury the

impression that he did not take this case and trial very seriously.

The trial court affirmed the jury’s $7.5 million punitive damages award.

On December 10, 2021, Wesley filed a Motion for Relief from Judgment, Motion to

Alter or Amend, and Motion for New Trial. Among other things, the company argued that

the trial court did not exercise its own independent analysis of the punitive damages award,

which it believed warranted relief under Tennessee Rule of Civil Procedure 59, and raised

a number of same issues advanced in this appeal, namely: (1) an alleged inconsistency in

awarding a verdict on both breach of contract and unjust enrichment theories; (2) an

allegation that the trial court abdicated its role as thirteenth juror by approving Ms.

Korshoff’s retaliatory discharge claim, citing the fact that “the evidence showed only that

Audrey Korshoff reported Chuck McDowell’s refusal to pay her commissions to Mr.

McDowell himself” rather than to some external actor; and (3) multiple objections to the

jury’s punitive damages award. Regarding the latter, Wesley also urged the trial court to

enter a remittitur to reflect Tennessee’s statutory cap on punitive damages pursuant to

Tennessee Code Annotated section 29-39-104.

Ms. Korshoff responded, contending that Wesley waived many of the substantive

arguments in its motion by failing to make a motion for summary judgment or directed

verdict at trial and by neglecting to object to any of Ms. Korshoff’s proposed jury

instructions. Ms. Korshoff argued that Wesley cannot simply “change [its] mind” after

making “a Conscious, Strategic, and Tactical Decision to Waive Its Now Objection.” Ms.

Korshoff also addressed the company’s arguments on the merits. Regarding Wesley’s legal

inconsistency argument, Ms. Korshoff asserted that the jury’s verdict demonstrates a

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temporal distinction in the proof presented at trial, stating, “[t]he jury . . . returned a verdict

granting [Ms. Korshoff] $60,000 in recovery for breach of contract (correlating to evidence

of the commissions earned during her employment until May 1, 2019) and $201,000 for

unjust enrichment; the differing amounts indicate that the jury understood [Ms. Korshoff]

sustained separate losses under each theory of recovery.” Regarding Wesley’s argument

that she needed to report the company’s withholding of her commissions to an external

actor to recover for retaliatory discharge, Ms. Korshoff contended that no such limitation

exists under Tennessee law. Finally, Ms. Korshoff urged the trial court to retain the jury’s

punitive damages award.7

The trial court entered a Memorandum and Order ruling upon both parties’

arguments on April 14, 2022. The trial court agreed with Ms. Korshoff that Wesley waived

any argument it could have raised to both the inconsistency of the jury’s verdicts and the

sufficiency of the evidence for her retaliatory discharge claim by not making a motion for

directed verdict during trial. Then, “[a]ssuming, arguendo, Wesley [did] not waive

th[e]s[e] issue[s]” the trial court endorsed Ms. Korshoff’s theory on the inconsistency

argument that “[t]he jury . . . awarded damages on both claims based upon the two

timeframes,” noting that Ms. Korshoff alleged Wesley withheld her commissions, pre and

post-termination. The trial court also ruled that Ms. Korshoff did not need to report

Wesley’s misconduct to an external actor to succeed on her retaliatory discharge claim.

The trial court re-examined the punitive damages factors and concluded that punitive

damages were appropriate in Ms. Korshoff’s case, but the trial court reduced the award to

$559,500 pursuant to the statutory damages cap found in Tennessee Code Annotated

section 29-39-104.

While Wesley raises seven issues on appeal, 8 its arguments ultimately fall within

7

Ms. Korshoff also raised a challenge to the constitutionality of Tennessee’s cap on punitive

damages, arguing that the entry of any remittitur would undermine the “guarantee to the right of trial by

jury.” Consistent with the requirements placed on plaintiffs challenging the constitutionality of a state

statute, Ms. Korshoff sent notice of her challenge to the punitive damages cap to the Tennessee Attorney

General and Reporter. See Tenn. R. Civ. P. 24.04. The State filed a motion to intervene and submitted a

Memorandum of Law in support of the constitutionality of the damages cap. In its final Memorandum and

Order, the trial court concluded that the statutory cap on punitive damages does not violate the federal and

state constitutions, and Ms. Korshoff has not challenged the trial court’s ruling on appeal.

8

The seven issues set forth by Wesley in its briefing include:

1. Whether this Court should order a new trial.

2. Whether the trial court erred in entering judgment on Plaintiff’s alternative claims for

breach of contract and unjust enrichment.

3. Whether the trial court failed to properly exercise its role as the thirteenth juror

concerning Plaintiff’s retaliatory discharge claim when, among other things, the trial

court analyzed the verdict as it would under a Motion for Judgment as a Matter of Law.

-8-

three categories. One, Wesley challenges whether the jury could find the company liable

for both breach of contract and unjust enrichment. Two, Wesley challenges whether the

trial court properly performed its role as thirteenth juror with regard to Ms. Korshoff’s

retaliatory discharge claim. Three, Wesley challenges on multiple grounds the punitive

damages award. Ms. Korshoff insists that the trial court did not err and seeks an award of

costs, expenses, and attorney’s fees, asserting that Wesley’s appeal is frivolous.

II.

Wesley argues that, as a matter of law, a jury cannot award damages simultaneously

on breach of contract and unjust enrichment claims. While Wesley concedes that

“Plaintiffs may properly plead both claims,” it insists that “verdicts and judgments, unlike

pleadings, may not be inconsistent.” In this specific context, Wesley contends that Ms.

Korshoff could not recover on her unjust enrichment claim because the jury found that

there was a contract and, therefore, unjust enrichment recovery is unavailable where the

relationship is governed by a contract. On these bases, Wesley argues on appeal for either

a new trial or elimination of the allegedly improperly awarded unjust enrichment damages.

In its Motion for Relief from Judgment, Motion to Alter or Amend, and Motion for

New Trial, Wesley asserted that an inconsistency exists in the jury’s verdict as to the

contract and unjust enrichment claims. The trial court rejected Wesley’s inconsistency

arguments on two bases -- waiver and a determination that there was no inconsistency. The

trial court found waiver based upon Wesley’s failure to object to the verdict form, to contest

either the jury instructions advanced by Ms. Korshoff or those set forth by the court, to

offer suggested revisions to the jury instructions or propose a jury instruction to address

any related concern, or to move for either summary judgment or a directed verdict.

Additionally, even if Wesley’s arguments were not waived, the trial court concluded that

there was no actual inconsistency in the decisions reached by the jury with regard to the

breach of contract and unjust enrichment claims. The trial court noted that Ms. Korshoff,

in arguing to the jury, drew a distinction between contract damages related to commissions

prior to the date of termination of her employment and unjust enrichment damages related

4. Whether the trial court erred in awarding punitive damages under Hodges v. S.C. Toof

& Co., 833 S.W.2d 896 (Tenn. [1992]), when Plaintiff failed to prove fraudulent

conditions supporting an award of punitive damages.

5. Whether the punitive damages awarded in this case violate the Due Process Clause of

the Fourteenth Amendment to the United States Constitution.

6. Whether the punitive damages awarded in this case violate Article I, § 8, of the

Tennessee Constitution.

7. Whether the trial court’s judgment should be reversed.

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to leads that were closed after the date of termination of her employment. The trial court

observed that the jury’s determination tracks this distinction having awarded the precise

amount of commissions during Ms. Korshoff’s time period of working for Wesley at

$60,000 as contract damages and a percentage of what would have been due for leads that

closed after her termination ($201,000 awarded) for unjust enrichment. On appeal, Ms.

Korshoff argues that the trial court was correct with regard to its decision to reject Wesley’s

arguments related to purported inconsistency on both of these bases.

Ultimately, “litigants are entitled to have their rights settled by a consistent and

intelligible verdict and . . . verdicts that are inconsistent and irreconcilable cannot stand.”

Concrete Spaces, Inc. v. Sender, 2 S.W.3d 901, 911 (Tenn. 1999). “Where a judgment is

based upon inconsistent findings by a jury it is the duty of the appellate court to reverse

and remand the case for a new trial.” Id. Longstanding Tennessee law has provided,

however, that

It is the duty of the court in construing verdicts to give them the most

favorable interpretation and to give effect to the intention of the jurors if that

intention be permissible under the law and ascertainable from the

phraseology of the verdict. If after an examination of the terms of the verdict

the court is able to place a construction thereon that will uphold it, it is

incumbent upon the court to do so.

Briscoe v. Allison, 290 S.W.2d 864, 868 (Tenn. 1956) (quoting Tenn. Procedure in Law

Cases, Section 1504, p. 573); see also, e.g., Marshall v. Cintas Corp., 255 S.W.3d 60, 73

(Tenn. Ct. App. 2007).

As noted above, the trial court concluded that no inconsistency existed. In

accordance with an argument advanced to the jury in closing arguments by Ms. Korshoff,

which from the record before us does not appear to have drawn any objection, the trial

court determined that the jury drew a distinction between pre and post-termination leads,

awarding contract-based commission damages for pre-termination closed leads and unjust

enrichment damages at a lesser rate than the contract commission rate in connection with

leads that had not closed at the time of termination. No transcript has been provided to this

court; rather, the parties are relying upon a Rule 24 statement of the evidence. Tenn. R.

App. P. 24(c). Therein, the agreement between Wesley and Ms. Korshoff is described as

providing that she “would be paid $250 in commission on (1) any deal that closed that she

had either called personally and set up an appointment for or (2) for any deal that closed

that was directly attributable to any of the leads she brought in under her position as

Director of Business Development, whether she had set the appointment or not.” One point

of potential uncertainty is whether commissions would continue to be due after termination.

Ms. Korshoff was ultimately, as determined by the jury, improperly terminated.

Wesley argues that the jury’s determinations are inherently inconsistent because the

- 10 -

jury found a contract existed, and therefore, unjust enrichment damages are impermissible

because the contract governed. This argument does not effectively address the trial court’s

conclusion that the distinction is a temporal one between contract-governed damages

during her time of employment and unjust enrichment damages stemming from leads that

closed only after her termination. The trial court concluded that the jury determined the

contract fully governed the former, leads closed while Ms. Korshoff worked for Wesley,

but not the latter, leads closed after Ms. Korshoff left Wesley. The trial court concluded

that the evidence and argumentation supported this distinction. From our review of the

record, which is limited by the parties’ utilization of Rule 24 statement of evidence as

opposed to a transcript, we do not see any basis for concluding that this determination was

in error.

Furthermore, pursuant to Tennessee Rule of Appellate Procedure 36(a), relief need

not be granted by an appellate court “to a party responsible for an error or who failed to

take whatever action was reasonably available to prevent or nullify the harmful effect of

an error.” In other words, “a party is not entitled to relief if the party invited error, waived

an error, or failed to take whatever steps were reasonably available to cure an error.” Tenn.

R. App. P. 36 Advisory Comm. cmt. The trial court concluded that insofar as there is any

error that Wesley invited it. There are multiple places where Wesley could have avoided

what it contends is an inconsistency in connection with the jury’s determination as to the

contract and unjust enrichment claims. Furthermore, Wesley’s contention that there is no

basis for unjust enrichment award is, as noted by Ms. Korshoff, more properly viewed as

a sufficiency of the evidence challenge to Ms. Korshoff’s unjust enrichment claim, which

is more properly addressed through a directed verdict motion.9 Wesley, however, failed to

move for a directed verdict. Additionally, there is also no indication from the record before

us that Wesley objected to the distinction drawn by Ms. Korshoff in her argument to the

jury during closing arguments distinguishing between pre- and post-termination damages

as contract and unjust enrichment damages respectively.

To the extent that Wesley raises a sufficiency of the evidence challenge on appeal

with regard to the unjust enrichment award, we note that the company failed to move for

directed verdict or summary judgment at any point during the trial below. See McLemore

ex rel. McLemore v. Elizabethton Med. Investors, Ltd. P’ship, 389 S.W.3d 764, 778 (Tenn.

Ct. App. 2012) (“For this Court to review the sufficiency of the evidence on appeal, a

motion for a directed verdict must have been made at the conclusion of all the proof and

9

“A motion for a directed verdict provides a mechanism for determining a question of law,

specifically, ‘whether the plaintiff has presented sufficient evidence to create an issue of fact for the jury to

decide.’” Estrada v. DJ Exteriors, LLC, No. M2022-01052-COA-R3-CV, 2023 WL 2442494, at *2 (Tenn.

Ct. App. Mar. 10, 2023) (quoting Brown v. Christian Bros. Univ., 428 S.W.3d 38, 49 (Tenn. Ct. App.

2013)), no perm. app. filed.

- 11 -

renewed in a post judgment motion following the jury’s verdict.”). Accordingly, insofar

as Wesley is advancing a sufficiency of the evidence challenge, any such objection has

been waived. See, e.g., Boren v. Hill Boren PC, No. W2021-00478-COA-R3-CV, 2023

WL 3375623, at *5 (Tenn. Ct. App. May 11, 2023) (deeming sufficiency challenge waived

based on the appellant’s “failure to move for a directed verdict following the close of all

the proof”), perm. app. denied (Tenn. Oct. 13, 2023).

Simply stated, the trial court did not err in declining to grant relief to Wesley based

upon its errant contention that the jury’s determinations with regard to contract and unjust

enrichment were inconsistent and unsustainable.

III.

Next, Wesley contends that a new trial should be granted with regard to Ms.

Korshoff’s retaliatory discharge claim based upon the failure of the trial court to properly

perform its role as the thirteenth juror with regard to this claim. In its motion for new trial,

Wesley argued that “[t]he Court, acting as the thirteenth juror, should also order a new trial

on Audrey Korshoff[’]s retaliatory discharge claim, because the proof did not contain

evidence of an essential element of that claim.” Wesley asserted that Ms. Korshoff had

only reported wrongdoing internally within the company and thus could not prevail upon

her retaliatory discharge claim. Tying this claim to the thirteenth juror standard, Wesley

stated that “[t]he evidence necessarily preponderates against a verdict for a plaintiff when

the evidence does not contain proof of an essential element of a plaintiff s claim.”

The trial court rejected Wesley’s contention. In doing so, the trial court observed

the sufficiency of the evidence contention underlying Wesley’s argument and concluded

that by failing to move for directed verdict Wesley had waived a sufficiency of the evidence

argument. The trial court, nevertheless, proceeded to assess Wesley’s contention,

observing that even if it was not waived, Wesley’s argument fails. In reaching this

conclusion, the trial court identified four elements that must be proven to support a

common law claim for retaliatory discharge. The trial court then declared that “there is no

doubt that Plaintiffs proved the first and third elements of a retaliatory discharge.” The

trial court then added that “[a]s for the second and fourth elements — Audrey Korshoff

showed and the jury clearly believed that Audrey Korshoff exercised a right protected by

public policy and the exercise of this right was a substantial factor motivating Wesley’s

decision to discharge Ms. Korshoff.” (Emphasis added). Additionally, the trial court

concluded that external reporting was not actually required for Ms. Korshoff to prevail

upon her retaliatory discharge claim.

“As thirteenth juror, the trial judge must independently weigh and review the

evidence presented at trial to determine whether it preponderates in favor of the verdict and

decide whether he or she agrees with and is satisfied with the jury’s verdict.” Meals ex rel.

Meals v. Ford Motor Co., 417 S.W.3d 414, 420 (Tenn. 2013). Regarding the exercise of

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this role by trial court judges, the Tennessee Supreme Court has observed that

[i]n addressing a motion for a new trial, the trial court has such broad

discretion that it is not bound to give reasons for its action in granting or

denying a new trial based on the preponderance of the evidence. Indeed,

when a trial judge approves the verdict without comment, the appellate court

will presume that the trial judge has adequately performed his function as the

thirteenth juror.

Borne v. Celadon Trucking Servs., Inc., 532 S.W.3d 274, 308 (Tenn. 2017) (citations

omitted). However, “[i]f a trial judge, in discharging his [or her] duty as a thirteenth juror,

makes comments which indicate that he [or she] has misconceived his [or her] duty as a

thirteenth juror, an appellate court must reverse the trial judge and remand for a new trial.”

Holden v. Rannick, 682 S.W.2d 903, 905 (Tenn. 1984).

Wesley’s contention that the trial court misapprehended its role in performing its

responsibility as thirteenth juror rests upon the trial court’s finding of waiver. The trial

court did state that Wesley had “waived its insufficiency of the evidence argument as it

relates to Audrey Korshoff’s retaliatory discharge claim.” The trial court, however,

proceeded to assess the evidence as it relates to Ms. Korshoff’s retaliatory discharge claim.

In doing so, the trial court expressly concluded “that there is no doubt that [Ms. Korshoff]

proved the first and third elements.” As to the second and forth elements of common law

retaliatory discharge, the trial court determined that she had “showed . . . Audrey Korshoff

exercised a right protected by public policy and the exercise of this right was a substantial

factor motivating Wesley’s decision to discharge Ms. Korshoff.” The trial court’s manner

of addressing the retaliatory discharge argument is tied to how Wesley framed its argument

in seeking a new trial. What Wesley styled as a thirteenth juror argument heavily

overlapped with a standard sufficiency of the evidence argument. Under these

circumstances, there is simply no basis for overcoming the presumption that the trial court

judge properly performed her role as the thirteenth juror. To the contrary, the trial court

expressly concluded that Ms. Korshoff successfully proved her case.

On appeal, Wesley continues to touch briefly upon sufficiency-based aspects of this

argument. While asserting that the trial court’s “substantive analysis” of requirements of

retaliatory discharge “was plainly wrong,” Wesley concedes that this matter is “not directly

at issue in this appeal.” In addition to conceding that the matter is not before this court,

any sufficiency argument was also waived when the company failed to move for directed

verdict or summary judgment at any point during the trial below. See McLemore ex rel.

McLemore, 389 S.W.3d at 778 (“For this Court to review the sufficiency of the evidence

on appeal, a motion for a directed verdict must have been made at the conclusion of all the

proof and renewed in a post judgment motion following the jury’s verdict.”). Accordingly,

insofar as Wesley is advancing a sufficiency of the evidence challenge, any such objection

has been waived. See, e.g., Boren, 2023 WL 3375623, at *5 (deeming sufficiency

- 13 -

challenge waived based on the appellant’s “failure to move for a directed verdict following

the close of all the proof”).

IV.

Wesley also challenges the punitive damages award in the present case. It does so

on four different grounds. One, assuming that the unjust enrichment award is eliminated,

Wesley asserts there must be a corresponding reduction of the punitive damages award to

meet the demands of the statutory cap on punitive damages. Two, Wesley argues that

punitive damages are unavailable in this case because it did not act maliciously,

intentionally, fraudulently, or recklessly and cause injury. Three, Wesley contends that the

trial court erred in its assessment of the punitive damage factors. Four, Wesley contends

that the award of punitive damages, even having been lowered to the statutory maximum,

is unconstitutional under the Due Process Clause of the United States Constitution and

Article 1, Section 8 of the Tennessee Constitution.

A.

Wesley’s first argument rises and falls on appeal based upon the success of its

contention that the unjust enrichment award should be eliminated. If the unjust enrichment

award is neither reduced nor eliminated, then there is no corresponding reduction of the

punitive damages that becomes necessary. Having determined that Wesley’s argument

with regard to the unjust enrichment award is unavailing, we conclude that no attendant

reduction in the punitive damages award is necessary on that basis.

B.

Wesley’s next argues that the jury did not determine that it acted maliciously,

intentionally, fraudulently, or recklessly and caused injury by doing so. Therefore, it

reasons that an award of any punitive damages is in error. Wesley’s argument appears to

be primarily grounded upon its understanding of the jury verdicts in the present case.

Having asserted that punitive damages are rarely appropriate in cases involving contract

disputes, Wesley points to the jury’s determination that Ms. Korshoff proved her

intentional misrepresentation claim while declining to award Ms. Korshoff further

damages for intentional misrepresentation. This is the central axis of its argument. In

Wesley’s view, the jury, therefore, necessarily concluded there was no harm resulting from

its intentional misrepresentation. Ms. Korshoff argues this is a misreading of the jury’s

verdicts. Moreover, she also notes that the jury found for and awarded Ms. Korshoff

damages for her contract, unjust enrichment, and retaliatory discharge claims, and that the

jury found for Ms. Korshoff on her intentional misrepresentation claim.

Wesley’s argument is unavailing. Addressing punitive damages, the jury’s

instructions included, in part, the following:

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Punitive damages may be considered if, and only if, the plaintiff has shown

by clear and convincing evidence that a defendant has acted intentionally,

recklessly, maliciously, or fraudulently. . . .

A person acts intentionally when it is the person’s purpose or desire to do a

wrongful act or to cause the result.

A person acts recklessly when the person is aware of, but consciously

disregards a substantial and unjustifiable risk of injury or damage to another.

Disregarding the risk must be a gross deviation from the standard of care that

an ordinary person would use under all the circumstances.

A person acts maliciously when the person is motivated by ill will, hatred or

personal spite.

A person acts fraudulently when: (1) the person intentionally either

misrepresents an existing material fact or causes a false impression of an

existing material fact to mislead or to obtain an unfair or undue advantage;

and (2) another person suffers injury or loss because of reasonable reliance

upon that representation.

Having been provided with these instructions, the jury concluded that punitive damages

are warranted in this case. Additionally, the jury instructions regarding Ms. Korshoff’s

claim of intentional misrepresentation provide as an element thereof that “as a result of

plaintiffs reliance upon the truth of the representation, the plaintiff sustained damage.” The

jury determined that she proved “all of the elements of the claim for intentional

misrepresentation.”

In considering Wesley’s arguments, the trial court observed that Wesley’s actions

were not accidental but intentional and that Wesley had generated a pretextual reason for

Ms. Korshoff’s termination. The trial court determined that Wesley engaged in wage theft

and caused injuries to Ms. Korshoff. Wesley was, as the trial court concluded, in a position

of power over Ms. Korshoff and understood her financial vulnerabilities. Despite being

aware of her financial vulnerability and that it owed this money to Ms. Korshoff, Wesley

attempted to keep the money it owed to Ms. Korshoff and to conceal what it was doing by

generating a pretextual basis for her termination. Wesley persisted in denying that it owed

commissions.

Wesley has not argued to either the trial court or to this court on appeal that there

was any error in the instructions given to the jury. “It is presumed that jurors understand

and follow the court’s instructions.” Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121,

134 (Tenn. 2004). The Tennessee Supreme Court has indicated that punitive damages can

- 15 -

be awarded in cases involving disputes over contracts. Rogers v. Louisville Land Co., 367

S.W.3d 196, 211-12 n.14 (Tenn. 2012). A punitive damages award in a case centering

upon a contract dispute is appropriate where the standards for punitive damages are

satisfied. Riad v. Erie Ins. Exch., 436 S.W.3d 256, 276 (Tenn. Ct. App. 2013). There is

nothing in this case to indicate that the jury did not properly consider its charge or resolve

the question of whether punitive damages were warranted. Wesley’s interpretation of the

jury’s verdict as to the damage award for Ms. Korshoff’s intentional misrepresentation

claim simply cannot bear the weight that Wesley places upon it. The jury was instructed

and concluded punitive damages are warranted in this case. The jury’s determination not

to award further damages in connection with Ms. Korshoff’s intentional misrepresentation

claim does not invalidate its decision as to punitive damages.

C.

Wesley next contends that the trial court misapplied the punitive damage factors

when assessing the jury’s punitive damages award and ultimately upholding an award of

punitive damages although reducing the award to satisfy the statutory cap under Tennessee

Code Annotated section 29-39-104(a)(5). The Tennessee General Assembly has provided

that

In all cases involving an award of punitive damages, the trier of fact, in

determining the amount of punitive damages, shall consider, to the extent

relevant, the following: the defendant’s financial condition and net worth;

the nature and reprehensibility of the defendant’s wrongdoing; the impact of

the defendant’s conduct on the plaintiff; the relationship of the defendant to

the plaintiff; the defendant’s awareness of the amount of harm being caused

and the defendant’s motivation in causing such harm; the duration of the

defendant’s misconduct and whether the defendant attempted to conceal such

misconduct; the expense plaintiff has borne in attempts to recover the losses;

whether the defendant profited from the activity, and if defendant did profit,

whether the punitive award should be in excess of the profit in order to deter

similar future behavior; whether, and the extent to which, defendant has been

subjected to previous punitive damage awards based upon the same wrongful

act; whether, once the misconduct became known to defendant, defendant

took remedial action or attempted to make amends by offering a prompt and

fair settlement for actual harm caused; and any other circumstances shown

by the evidence that bear on determining a proper amount of punitive

damages. . . .

Tenn. Code Ann. § 29-39-104(a)(4).

The Tennessee Supreme Court has directed that “the trial court must thoroughly

review any award of punitive damages made by the jury.” Coffey v. Fayette Tubular Prod.,

- 16 -

929 S.W.2d 326, 328 (Tenn. 1996). To satisfy this requirement, “[i]n jury cases the trial

judge must review the jury’s award of punitive damages and ‘clearly set forth the reasons

for decreasing or approving all punitive awards in findings of fact and conclusions of law

demonstrating a consideration of all factors on which the jury is instructed.’” Culbreath v.

First Tenn. Bank Nat. Ass’n, 44 S.W.3d 518, 528 (Tenn. 2001) (quoting Hodges, 833

S.W.2d at 902). This review in punitive damages cases “is referred to as a Hodges

review,”10 in reference to the Tennessee Supreme Court decision setting forth this

obligation. See generally Hodges, 833 S.W.2d 896.

The trial court addressed the factors twice. The trial court made its initial

assessment in the Final Judgment on Jury Verdict and further assessed the factors in ruling

upon Wesley’s Motion for Relief from Judgment, Motion to Alter or Amend, and Motion

for New Trial in the trial court’s Memorandum and Order. In its initial assessment, the

trial court stated the following:

The first factor considered by the jury was the net worth and financial

condition of Defendant Wesley Financial Group, LLC. Uncontradicted proof

was presented to the jury that Defendant had an annual revenue of

$28,504,252.30 in 2018, which jumped to almost $79,894,786.79 in 2019,

and jumped again to $104,420,735.12 in 2020. Uncontradicted proof was

also presented that Defendant has two offices, one in Franklin, Tennessee,

and one in Las Vegas, Nevada.

The second factor was the objectionable nature of Defendant’s

wrongdoing, the impact of the Defendant’s conduct on the Plaintiff, and the

relationship of the parties. Uncontradicted proof was presented to the jury

that, because of the Defendant’s conduct, Plaintiff Audrey Korshoff lost her

job, home, and livelihood. She had a great deal of trouble seeking and

finding other employment. She lost her home because she could not afford

the mortgage payments after Defendant refused to pay her and then fired her

under the pretext of “attendance,” when the actual reason for which Plaintiff

Audrey Korshoff was fired was because she sought payment for her earned

commissions. She had never been fired from a job for any alleged deficiency

in her performance, and she had never been yelled at nor humiliated at a

company meeting simply for asking for her earned commissions, and the

Court was of the opinion that this had a devastating effect on her and her

family.

The third factor was the Defendant’s awareness of the amount of harm

being caused and the Defendant’s motivation in causing the harm.

Uncontradicted proof was presented to the jury that Defendant knew from

10

McLemore, 389 S.W.3d at 780.

- 17 -

early conversations with Plaintiff Audrey Korshoff that she was a single

mother who was looking to refinance her home and needed a W-2 in order

to do so. Defendant hired Plaintiff initially as a Qualification Specialist at

$12/hour plus commissions on each lead that she qualified so that she could

learn how the company worked with the understanding that she would

become its Director of Business Development. Approximately three weeks

later, Plaintiff Audrey Korshoff was promoted to Director of Business

Development as originally contemplated by the parties, which was a salaried

position of $50,000 per year plus commissions on each lead that closed

regardless of whether she personally qualified the lead as long as they were

attributable to the business development team. She also had the option to

qualify leads in order to earn more money should she have any free time.

However, Defendant and Plaintiff quickly realized that she could not perform

her duties in her new role plus qualify leads as before in order to make up for

the low starting salary. Because leads were not coming in at that time,

Plaintiff had trouble making ends meet. So Defendant raised her salary to

$75,000 per year with the same commission structure as before and

additionally gave her a bonus of $5,000 because Defendant was happy with

Plaintiff’s work and to help her out on her bills until the leads Plaintiff was

generating started to come in. Thus, based on the uncontradicted proof,

Defendant was well aware of Plaintiffs’ financial difficulties while she

worked on building her business initiatives for Defendant. Defendant was

openly complimentary of Plaintiff’s work in meetings and emails until the

money started coming in and she sought payment for her earned

commissions. Defendant’s motivation in causing Plaintiff harm, that is, by

firing her, was motivated by its motive of retaining all of the profit

attributable to Plaintiff’s work.

The fourth factor was the duration of the Defendant’s misconduct and

whether the Defendant attempted to conceal the conduct. Uncontradicted

proof was presented to the jury that Defendant paid Plaintiff in accordance

with their agreement until after January 25, 2019. Defendant continually

refused to pay Plaintiff and rebuffed her until May 1, 2019, when Defendant

ultimately fired Plaintiff under the pretext of “attendance.” In the days

leading up to Plaintiff’s firing, on April 30, 2019, and May 1, 2019, Chuck

McDowell, Defendant’s CEO, sent Plaintiff nasty emails belittling her

because she again sent an invoice to Defendant asking Defendant to pay her

on her earned commissions. Chuck McDowell also yelled at and humiliated

her at a company meeting in April 2019. Defendant attempted to conceal its

conduct by stating in the Separation Notice that Plaintiff was being fired for

“attendance.” However, Defendant admitted in its interrogatories and

through Mr. Charles McDowell, Chief Marketing Officer on cross-

examination, that Defendant never wrote Plaintiff up for any infraction, let

- 18 -

alone any for “attendance.” Defendant fired Plaintiff Audrey Korshoff for

attendance despite the fact that she was given a laptop so that she could work

from any location and outside of normal office hours, and no one complained

of her attendance until right before she was fired.

The fifth factor was the amount of money the Plaintiff has spent in

attempt to recover the losses. No evidence was presented regarding this

factor.

The sixth factor was whether the Defendant profited from the activity,

and if so, whether the punitive award should be in excess of the profit in order

to deter similar future behavior. Uncontradicted proof was presented to the

jury that Defendant profited from the activity. As noted above, the proof at

trial relating to Defendants financial condition showed that it had revenue of

$28,504,252.30 in 2018, which jumped to almost $79,894,786.79 in 2019,

and jumped again to $104,420,735.12 in 2020. Based on this explosive

growth, Defendant certainly benefited from Plaintiff’s work because of the

stream of customers generated from her work. By firing Plaintiff, Defendant

retained all of the money on the closed leads attributable to MRP, trade

shows, and referral rock program that it would have had to pay Plaintiff, plus

her salary and benefits. The Court is of the opinion that the punitive award

should be significant so as to deter similar future behavior both on the part

of the Defendant, and on the part of others who might attempt to do to the

Plaintiff what has been done in this case.

The seventh factor was the number and amount of previous punitive

damage awards against the Defendant based upon the same wrongful act.

The unrebutted proof presented to the jury at trial was that Defendant fired

at least two other employees when they sought payment for their earned

commissions and that Defendant was sued in a 2016 class action complaint

in the Middle District of Tennessee for, among other things, not paying “all

compensation or remuneration as had been promised” by Defendant. There

had not been any punitive damage awards against Defendant for the same

wrongful act.

The eighth factor was whether once the misconduct became known to

the defendant, the defendant tried to remedy the situation or offered a prompt

and fair settlement for the actual harm caused. Based on the uncontradicted

proof, when Plaintiff was still not paid on commissions that had accrued

since January 22, 2019, she sent Defendant an invoice dated April 30, 2019,

totaling $60,000 in earned commissions, and making Defendant aware that

it still had not paid her daughter for working two of Defendant’s trade show

booths in March 2019. In response to Plaintiff’s invoice, Chuck McDowell

- 19 -

sent her a nasty email and then fired her. Plaintiff tried to offer a settlement,

which Defendant rebuffed and continually refused to pay her. Defendant

took no steps at all to remedy the situation or offer Plaintiff a prompt and fair

settlement for the actual harm caused to her. Rather, Defendant’s position at

trial, which the jury apparently rejected, was that Defendant did not enter

into an agreement with Plaintiff. Defendant was firm in its position despite

the fact that Plaintiff presented uncontradicted pay stubs showing that

Defendant did pay her for a period of time in accordance with such

agreement.

Finally, the ninth factor was any other circumstances shown by the

evidence that bears on determining the proper amount of the punitive award.

The uncontradicted proof presented to the jury established that Defendant

through Chuck McDowell would insult and belittle Defendant’s employees,

and even Defendant’s witness April Poynter, Defendant’s former Chief

People Officer, admitted that such was the culture in the workplace. To avoid

paying its employees their earned commissions, Defendant would fire its

employees. Defendant’s main witnesses, namely Robin McVey and Chuck

McDowell, did not even appear at trial. Chuck McDowell did not appear at

trial because he was on vacation in Africa, giving the Court and the jury the

impression that he did not take this case and trial very seriously.

Assessing the punitive damages factors in response to Wesley’s Motion for Relief

from Judgment, Motion to Alter or Amend, and Motion for New Trial, the trial court stated

the following:

(1) In 2018, Wesley had annual revenue of $28,504,252.30. In 2019,

Wesley’s annual revenue increased to $79,894,786.79. In 2020, Wesley’s

annual revenue again increased substantially and was $104,420,735.12.

Wesley’s explosive growth was due, in large part, to Audrey Korshoff

obtaining the AARP account and the tremendous leads on that account.

Thirty-six percent of Audrey Korshoff’s contracts sent to AARP closed. In

other areas, twenty percent was the average. So, AARP was a very good lead

source. Also, the average AARP sale is $11,136 whereas in other areas, the

average sale is $8,800. Wesley has two offices — one located in Franklin,

Tennessee, and one located in Las Vegas, Nevada. Wesley did not present

any evidence to the contrary nor did it provide any evidence at trial of its

expenses or debts. The evidence produced at trial establishes that Wesley is

financially stable and doing quite well.

(2) Wesley’s conduct amounts to wage theft. Wesley entered into an

agreement with Audrey Korshoff and reneged on the agreement. Then, when

Audrey Korshoff attempted to collect on her agreement, Wesley fired her for

- 20 -

“attendance,” an issue that had never been raised during Audrey Korshoff’s

employment. In essence, Wesley removed Audrey Korshoff after Wesley

realized the fruit of her labor in order to keep the profits for itself. Further,

the evidence established that Audrey Korshoff was given a laptop to work

remotely and outside normal business hours, which circumstantially

established that Wesley’s reason for firing Audrey Korshoff was mere

pretext. Afterwards, Wesley denied that it ever made an agreement with

Audrey Korshoff despite paying her pursuant to the agreement. Wesley’s

behavior was not accidental, but intentional. As a result of Wesley’s

behavior, Audrey Korshoff suffered financial distress, including the loss of

her home in which she and her minor child resided. Wesley was in a position

of power over Audrey Korshoff as her employer. She relied on Wesley for

her bread and butter and to support her children as a single mother. To top it

off, Wesley refused to pay Audrey Korshoff’s minor daughter, [M.K.], who

Audrey Korshoff had convinced to come help her at two weekend trade

shows because no other Wesley employees were willing to work the weekend

trade shows.

(3) Wesley was aware of Audrey Korshoff’s financial struggles and knew

that Ms. Korshoff was a single mother. Wesley hired Audrey Korshoff as a

Qualification Specialist at $12 an hour plus commissions. Three weeks later,

Wesley promoted Audrey Korshoff to Director of Business Development

with a salary of $50,000 per year plus commissions with the option to qualify

leads. Audrey Korshoff would not have been willing to work for $50,000

per year unless she would also be paid the $250 commission. Because leads

were not rapidly coming in at that time, Wesley raised Ms. Korshoff’s salary

to $75,000 per year with a $5,000 bonus. This pay increase maintained the

parties’ agreement that Wesley would pay Audrey Korshoff $250 for every

lead closed. For Wesley to increase Audrey Korshoff’s salary in such a short

amount of time establishes that some form of agreement occurred in order to

financially assist Audrey Korshoff.

(4) Wesley’s conduct ranged from January 25, 2019 to May 1, 2019 before

Wesley terminated Audrey Korshoff. Prior to Audrey Korshoff’s

termination, Wesley’s CEO, Chuck McDowell, belittled Audrey Korshoff in

emails and in company meetings. Wesley’s reason for terminating Audrey

Korshoff was “attendance.” However, there is no record that Wesley ever

disciplined Audrey Korshoff for attendance problems. Company policy

required that employees be reprimanded incrementally before termination.

Further, Wesley provided Audrey Korshoff a laptop so that she could work

at any time and in any location. Moreover, prior to Audrey Korshoff

requesting her pay, both Chuck McDowell and Robin McVey praised her

work. Once Ms. Korshoff began to pursue her pay, the tide changed and

- 21 -

Chuck McDowell began to berate and belittle Ms. Korshoff during company

meetings in the presence of other employees. The evidence established that

Wesley terminated Audrey Korshoff as a response to Audrey Korshoff’s

asking Wesley to honor the parties’ agreement. Wesley attempted to hide

this fact by claiming it terminated Audrey for attendance problems.

(5) Although Audrey Korshoff did not submit any evidence at trial

establishing the amount of expense she has incurred in an attempt to recover

her losses, she presented proof via her testimony that she attempted for many

months to get Wesley to pay her what it owed her and she made numerous

requests of Wesley to pay her and to settle the matter.

(6) Wesley profited off of its activity by discharging Audrey Korshoff and

keeping the money it should have paid her. Further, after terminating Audrey

Korshoff, Wesley outright denied entering into an agreement with her despite

having already acted on the agreement by paying Audrey Korshoff pursuant

to the agreement. Charles McDowell testified that, had Audrey Korshoff

been paid pursuant to the agreement - $250 for every lead closed — she

would have received commissions in the amount of $3 million to $6 million.

(7) There is no evidence that Wesley has been subjected to previous punitive

damages awards based upon the same wrongful conduct. However, evidence

was submitted demonstrating that Wesley was subjected to a class action

lawsuit in 2016 in the Middle District Court of Tennessee for claims similar

to Audrey Korshoff's claims. In addition, Wesley fired two other employees

when they complained that Wesley would not pay them what was promised

them.

(8) The evidence demonstrates that Wesley never tried to remedy the

situation. Audrey Korshoff remains unpaid. After Audrey Korshoff sent

Wesley an invoice on April 30, 2019, Chuck McDowell replied with a

vitriolic email and fired her. Audrey Korshoff’s attempts to settle were

rebuffed and Wesley continuously denied that an agreement ever existed

despite evidence to the contrary. In particular, Wesley acted upon the

agreement by paying Audrey Korshoff until January 25, 2019.

(9) The evidence at trial established that what happened to Audrey Korshoff

was not the first time Wesley fired an employee to avoid paying

commissions. Wesley fired two other employees when they complained that

they were not paid what they were owed. Also, Wesley was sued in federal

court in 2016 for conduct similar to the conduct it perpetrated on Audrey

Korshoff.

- 22 -

Wesley does not dispute that the trial court conducted a review of the relevant

factors or the thoroughness of the trial court’s performance of this role; rather, Wesley

contends that the trial court misapplied the factors. If the factors were applied correctly,

Wesley insists “no punitive damages should be awarded at all.” Wesley asserts five errors

of application. One, Wesley argues that, in considering the duration of its misconduct, its

misconduct lasted only a few months and, accordingly, it should be regarded as short-lived.

Two, in considering whether Wesley attempted to conceal its misconduct, Wesley contends

that the trial court should have concluded that it did not attempt to conceal its misconduct

because Wesley did not hide that it failed to pay Ms. Korshoff’s commissions. Three,

Wesley argues that, in assessing its awareness of the amount of harm that it was causing,

the trial court “made some leaps in reasoning” in concluding that Wesley was aware of the

harm that it was causing. Four, Wesley argues that in assessing its profit from the activity

at issue the trial court should have kept its consideration limited solely to the unpaid

commissions it failed to pay and not considered the profits generated from Ms. Korshoff’s

business development. Fifth, Wesley argues that the trial court improperly relied solely

upon its total revenue in assessing the company’s financial condition and net worth.

Wesley notes that companies can have significant expenses preventing revenue from

providing an accurate understanding of the company’s net worth, financial condition, or

profits.

We turn to Wesley’s first contention that its conduct should be considered short-

lived because its misconduct only lasted for a few months. Wesley offers no authority to

support its contention that a few months must be regarded as a short-lived time period in

which to engage in misconduct. We discern no error in the trial court viewing months of

failing to respond to requests from an employee for payment due, berating and belittling

the employee in response to requests for her due compensation, and developing a pretextual

basis for termination as not being short-lived misconduct.

Next, we consider Wesley’s argument that the trial court erred in considering its

actions as attempting to conceal its misconduct. Wesley insists that it openly admitted that

it had not paid Ms. Korshoff commissions because she was entitled to no such

commissions. The trial court noted Wesley’s denial of its obligation to pay commissions

and its response to Ms. Korshoff’s request for payment by developing a pretextual basis

for her termination. This pretextual termination is plainly related to Ms. Korshoff’s

retaliatory discharge claim and punitive damages in connection therewith. Generating a

pretextual basis for termination is an attempt to conceal misconduct in connection with the

reason for Ms. Korshoff’s termination. Furthermore, the trial court’s analysis also draws

a connection between the unpaid commissions and the development of a pretextual basis

for termination. The question of why Wesley terminated Ms. Korshoff is not only of

impact in considering the retaliatory discharge. That Wesley created a pretextual basis for

terminating Ms. Korshoff also helps reinforce her claim to commissions on closed leads.

Ms. Korshoff is making the case that she was terminated in response to seeking to be paid

what she was due. The development of a pretextual basis for terminating Ms. Korshoff

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offers an explanation for the termination under which Wesley can contend, as it did, that it

did not actually agree to pay commissions and that she was instead actually terminated for

a perfectly valid reason. We discern no error in the trial court regarding Wesley’s actions

as attempting to conceal its misconduct.

The third asserted argument for misapplication of the punitive damages factors

advanced by Wesley is that the trial court “made some leaps in reasoning” in concluding

that Wesley was aware of Ms. Korshoff’s financial struggles, most especially that these

financial struggles persisted after Wesley gave her a raise. As noted above, the parties

have failed to provide a transcript and have instead relied upon Rule 24 statement of the

evidence. With regard to Wesley’s knowledge of Ms. Korshoff’s financial distress, the

Rule 24 statement of evidence indicates that Wesley “was aware that Audrey Korshoff was

a single mother, and Audrey Korshoff told Robin McVey and Chuck McDowell about her

financial struggles on numerous occasions.” From the record before us, we have no basis

for concluding that the trial court made errant leaps of reasoning in concluding that the

evidence indicated Wesley was aware of the significant financial strain that Ms. Korshoff

was under.

Wesley’s fourth assertion of error in the application of the factors relates to the trial

court’s consideration of Wesley’s profits from leads generated by Ms. Korshoff, rather than

solely Wesley’s profit from retaining the money for the commissions that it was supposed

to pay. In advancing this argument, Wesley cites the trial court’s discussion of profits in

its Final Judgment on Jury Verdict. With regard to the trial court’s consideration of profits

stemming from leads developed by Ms. Korshoff in its earlier order, Wesley fails to offer

any authority indicating that this is an improper consideration when assessing profit. It is

not apparent why such consideration would be in error under the facts of the present case.

Wesley induced Ms. Korshoff to take a position of employment, developing leads that

generated enormous revenue increases for the company, based on an agreement to pay

commissions that Wesley later declined to pay and which it denied were due. It appears

that Wesley’s profits from Ms. Korshoff’s leads are interconnected with its misconduct.

Even if we assume for purposes of argument, however, that Wesley is correct and that the

profits factor should have been narrowly circumscribed to the profits of retained

commissions themselves exclusively, Wesley has failed to address the trial court’s later

analysis. Wesley fails to address the trial court’s analysis of profits in its subsequent

Memorandum and Opinion wherein the trial court addressed the profit factor in response

to Wesley’s Motion for Relief from Judgment, Motion to Alter or Amend, and Motion for

New Trial. In responding to Wesley’s motion, the trial court did analyze profits purely in

relation to retained profits. The trial court noted the testimony Charles McDowell “that,

had Audrey Korshoff been paid pursuant to the agreement - $250 for every closed — she

would have received commissions in the amount of $3 million to $6 million.” Accordingly,

we find no basis for reversing the trial court in connection with its analysis of Wesley’s

profits.

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Wesley’s fifth assertion of error relates to the trial court’s analysis of the net worth

and financial condition factor. Wesley argues the trial court erred by only considering

annual revenue totals over three years in analyzing this factor. As with the previous

argument regarding profit, Wesley, however, fails to address the additional analysis of this

factor set forth in the trial court’s Memorandum and Order. Therein, the trial court

observed, as it did in its earlier order, Wesley’s rapidly increasing and substantial annual

revenue of $28,504,252.30 (2018), $79,894,786.79 (2019), and $104,420,735.12 (2020).

In doing so, the trial court noted the significant role Ms. Korshoff played in this explosive

growth. Additionally, the trial court addressed the several-thousand-dollar higher average

sale for Wesley in connection with the AARP leads developed by Ms. Korshoff in

comparison with the sale value of Wesley’s average customer. Based upon the evidence

before it, the trial court ultimately determined that “Wesley is financially stable and doing

quite well.” Responding to Wesley’s motion, which raised a contention related to revenue

considerations being potentially misleading for some companies by failing to account for

debt, the trial court noted Wesley’s failure to “provide any evidence at trial of its expenses

or debts.” On appeal before this court, Wesley fails to address the trial court’s further

examination of this financial factor. Having failed to offer a challenge to the trial court’s

ultimate analysis, we cannot find any error by the trial court on this basis.

D.

Referencing the Due Process Clause of the Fourteenth Amendment and Article I,

Section 8 of the Tennessee Constitution, Wesley asserts based upon constitutional

guideposts11 that the punitive damages award should be entirely eliminated. While Wesley

references Article I, Section 8 of the Tennessee Constitution in its briefing before this court,

it fails to develop any argument in connection therewith. Accordingly, we conclude that

Wesley has waived any argument based upon the punitive damages award violating Article

I, Section 8 of the Tennessee Constitution. See Sneed v. Bd. of Pro. Resp., 301 S.W.3d

603, 615 (Tenn. 2010) (“It is not the role of the courts, trial or appellate, to research or

construct a litigant’s case or arguments for him or her, and where a party fails to develop

an argument in support of his or her contention or merely constructs a skeletal argument,

the issue is waived.”).

Problematically, as noted by Ms. Korshoff, Wesley did not actually seek complete

elimination of the punitive damage award before the trial court based upon its constitutional

11

In its brief, Wesley cites several cases decided by the United States Supreme Court that establish

the “guideposts” relevant to assessing the constitutionality of punitive damages awards. See BMW of N.A.,

Inc. v. Gore, 517 U.S. 559, 575-85 (1996). In Gore, the Supreme Court indicated that the appropriateness

of a punitive damages award may be evaluated based on three such guideposts: the degree of

reprehensibility of the defendant’s conduct, the ratio of compensatory to punitive damages awarded to a

particular plaintiff, and the comparable punitive damages awards arising from the same or similar conduct.

Id. In its briefing, Wesley addresses each of these factors in some detail, arguing that the jury’s punitive

damages award should be voided on that basis.

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guideposts argument. Wesley did raise a constitutional guideposts argument before the

trial court but argued only for a reduction of the punitive damages award, not for its total

elimination. The punitive damages award had been at a 27-to-1 ratio of punitive to

compensatory damages. Wesley argued before the trial court that “the total amount

awarded by the jury was excessive, and the Court should reduce the award, as required by

the Due Process Clause of the Fourteenth Amendment to the United States Constitution.”

Summarizing its constitutional guideposts argument, Wesley stated in its briefing before

the trial court that “Wesley respectfully submits this Court should drastically reduce the

amount of punitive damages awarded.” As for how much of a reduction would be

appropriate, Wesley argued for reducing the 27-to-1 award to something closer to a 4-to-1

punitive to compensatory damages ratio, which it asserted was “close to the line” with

regard to constitutional propriety. Based upon a separate argument made by Wesley

regarding the applicability of the Tennessee statutory cap on punitive damages, the trial

court did drastically reduce the punitive damages award. The trial court actually went even

beyond the 4-to-1 ratio referenced by Wesley, reducing the punitive damages award to a

2-to-1 ratio of punitive to compensatory damages.

The trial court granted Wesley the relief it requested pursuant to its constitutional

guideposts argument, though doing so based on a different rationale. Having already

afforded the requested relief, the trial court did not rule upon Wesley’s constitutional

guideposts argument. Wesley, nevertheless, asserts error on appeal. However, Wesley

obtained the relief it sought before the trial court in advancing this argument and cannot

secure a reversal on appeal for a trial court granting it what it sought, though doing so on

another basis. See 4 C.J.S. Appeal and Error § 252 (stating “that a party secured the relief

demanded on a different ground than the one urged . . . does not permit an appeal”).

V.

Ms. Korshoff also contends that Wesley’s appeal was frivolously filed, entitling her

to attorney’s fees pursuant to Tennessee Code Annotated section 27-1-122. According to

that statute,

When it appears to any reviewing court that the appeal from any court of

record was frivolous or taken solely for delay, the court may, either upon

motion of a party or of its own motion, award just damages against the

appellant, which may include but need not be limited to, costs, interest on the

judgment, and expenses incurred by the appellee as a result of the appeal.

The frivolous appeal statute “must be interpreted and applied strictly so as not to discourage

legitimate appeals.” Davis v. Gulf Ins. Grp., 546 S.W.2d 583, 586 (Tenn. 1977); Wakefield

v. Longmire, 54 S.W.3d 300, 304 (Tenn. Ct. App. 2001); see also, e.g., GSB Contractors,

Inc. v. Hess, 179 S.W.3d 535, 547 (Tenn. Ct. App. 2005). “Imposing a penalty for a

frivolous appeal is a remedy which is to be used only in obvious cases of frivolity and

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should not be asserted lightly or granted unless clearly applicable—which is rare.” Conder

v. Salyers, 421 S.W.3d 589, 597 (Tenn. Ct. App. 2013) (quoting Henderson v. SAIA, Inc.,

318 S.W.3d 328, 342 (Tenn. 2010)). Nevertheless, “[s]uccessful litigants should not have

to bear the expense and vexation of groundless appeals.” Davis, 546 S.W.2d at 586; see

also, e.g., Glanton v. Lord, 183 S.W.3d 391, 401 (Tenn. Ct. App. 2005); Jackson v.

Aldridge, 6 S.W.3d 501, 504 (Tenn. Ct. App. 1999). Ultimately, “[t]he award of damages

for the filing of a frivolous appeal lies within the sound discretion of this Court.” GSB

Contractors, Inc., 179 S.W.3d at 547; see also, e.g., Chiozza v. Chiozza, 315 S.W.3d 482,

493 (Tenn. Ct. App. 2009).

Wesley offered thoughtful arguments on appeal in opposition to both compensatory

and punitive damages awarded in the present case. While Wesley’s appeal was ultimately

unsuccessful, we cannot say that it was frivolous.

VI.

In considering the arguments advanced on appeal and for the reasons discussed

above, we affirm judgment of the trial court. The costs of the appeal are taxed to the

appellant, Wesley Financial Group, for which execution may issue if necessary. The case

is remanded for such further proceedings as may be necessary and consistent with this

opinion.

_________________________________

JEFFREY USMAN, JUDGE

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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