Two years after winning $2 million in a sexual harassment suit against the Atlanta sports bar chain Jocks & Jills and its founder, the company's former female manager has lost that judgment in a retrial of the case.
The latest jury, which rendered a verdict in U.S. District Court in Atlanta last month that former Jocks & Jills manager Tracey L. Tomczyk had not proven her sexual harassment claims, was the third to hear the nine-year-old case. Two other verdicts -- one in 2004 that found for Jocks & Jills LLC and company founder Joseph R. Rollins, and a second in 2006 that found for Tomczyk and awarded her $2.25 million -- were appealed to the 11th U.S. Circuit Court of Appeals. Both of the earlier verdicts were reversed and remanded by the appellate court.
Tomczyk's long-running federal suit against Rollins and the sports bar chain he founded has spawned related litigation in other venues, including:
• A 2007 Fulton County garnishment action by Tomczyk that forced the sale of Rollins' shares of Jocks & Jills stock on the county courthouse steps;
• The bankruptcy of Jocks & Jills;
• A Cobb County suit by Rollins against Tomczyk seeking damages for her garnishment action;
• A federal suit accusing Rollins and his accounting firm of fraud and breach of fiduciary duty by the U.S. Bankruptcy Court trustee appointed to oversee the sports bar's bankruptcy. That suit seeks millions of dollars from Rollins who, for years, oversaw the daily operation of the chain.
• A separate federal suit by the bankruptcy trustee naming as defendants the law firms that represented Rollins during the Tomczyk case. That suit seeks to recover funds those firms were paid within 90 days of Jocks & Jills' bankruptcy petition (which had the effect of giving them preference over other, often older, creditors). According to the suit, many of those payments were for Rollins' "individual benefit."
The twists and turns of the nine-year legal saga appear to have stripped both sides of any real victory while decimating the chain's assets. And lawyers for both sides say the suit has taken an emotional toll on their clients.
The original suit centered on allegations that Tomczyk -- who was Jocks & Jills' highest-ranking female manager and its comptroller -- became a target of vulgar and humiliating sexual and racial remarks by Rollins after she began dating a black man. Tomczyk is white.
This week, Rollins released a statement on the most recent jury verdict through his attorney, Cary S. King of Atlanta's Slater & King.
"Obviously, I'm pleased that the jury found me not guilty of the plaintiffs' appalling allegations," Rollins' statement said. "Hopefully, this lawsuit, which lasted over 10 years, has finally come to a close. The win is bittersweet, though. While the plaintiff was awarded nothing, it did come at a cost. Jocks & Jills, an Atlanta institution for over 20 years, is no longer in existence. ... While I'm glad this nightmare finally appears to be over, I treasure Jocks & Jills and am devastated that it did not survive this ordeal."
Four Jocks & Jills restaurants -- only one of them in Atlanta -- remain open, but are now under new ownership.
Tomczyk's attorney, Edward D. Buckley III of Atlanta's Buckley & Klein, on May 19 said he and Tomczyk were "obviously disappointed" by the latest jury verdict.
"We, of course, did not agree with the 11th Circuit," he said of the appellate court's 2008 decision to reverse Tomczyk's $2 million judgment. He added, "the ruling is the ruling we had to live with and we had to go forward on."
Buckley also challenged Rollins' claim that Tomczyk was the sole cause of Jocks & Jills' financial demise.
"Mr. Rollins needs to look in the mirror," Buckley said. "Just look at the bankruptcy pleadings filed by Jocks & Jills ... in which the trustee enumerates the things that Mr. Rollins did to cause the company to be insolvent. ... If you read the lawsuit the trustee filed against Mr. Rollins, then you know that the view of the company is quite different from Mr. Rollins' view as expressed or implied."
Tomczyk began working in 1990 at Jocks & Jills as a daytime manager, waitress and part-time bookkeeper at what was then the company's only restaurant in Midtown Atlanta at the corner of 10th and Peachtree streets.
The restaurant's founders included then-Atlanta Hawks players Scott Hastings and Randy Wittman and TBS/TNT sportscaster Craig Sager. Glenn "Doc" Rivers, head coach of the Boston Celtics, and then-Atlanta Hawk John Battle also invested. Jocks & Jills eventually expanded to 10 locations, and the investors asked Rollins to oversee daily operations and the chain's finances. Rollins eventually rose to become the chairman of Jocks & Jills.
Tomczyk claimed that, beginning in 1991, Rollins began sexually harassing her with constant, unwelcome physical contact, crude commentary and sexual come-ons, according to her allegations in court documents.
Tomczyk's suit claimed that Rollins' behavior escalated in 1997 after she began dating an African-American DJ she had met during a Jocks & Jills promotional event. Rollins, according to the suit, began singling her out for sexually graphic verbal abuse. Rollins' hostile comments were made in front of other managers, board members and shareholders, according to court pleadings. On June 14, 1999, Rollins informed Tomczyk during a board meeting that she should resolve problems that had arisen between her and a subordinate by engaging in oral sex with him, according to the suit. Tomczyk walked out of the meeting and was fired later that day.
Rollins claimed in court pleadings that he had terminated Tomczyk because she was insubordinate and had violated a policy that required his written approval before she could authorize salary increases for staff. King has said that Rollins "absolutely denies" making any sexually charged comments to Tomczyk.
Eighteen months later, after filing a complaint with the U.S. Equal Employment Opportunity Commission, Tomczyk sued, claiming that she had been subjected to sexual and racial discrimination and an increasingly hostile work environment in violation of federal anti-discrimination laws. After a split summary judgment ruling by U.S. Senior District Judge J. Owen Forrester in 2004, the case went to trial that summer. Forrester entered a directed verdict for the defendants on Tomczyk's retaliation and intentional infliction of emotional distress claims, after which the jury found for Rollins and the restaurant chain on Tomczyk's sexual harassment claims.
Tomczyk appealed. Two years later, an 11th Circuit appellate panel whose panelists included Judges Edward E. Carnes, William H. Pryor Jr. and Charles R. Wilson reversed the jury verdict and remanded the case to the district court.
The appellate panel found that Forrester had erred in not allowing the jury to consider either Tomczyk's claim that she was fired in retaliation for reporting the harassment to Jocks & Jills investors or her intentional infliction of emotional distress claim for conduct that occurred after Dec. 22, 1998 (and was not barred by the statute of limitations).
Prior to issuing the order, however, the appellate panel directed all parties in the litigation to mediate the dispute. The panel issued its opinion after mediation failed to resolve the case but noted, "[U]nder the circumstances it would be better if they settled their case."
Buckley called the appellate panel's direction to mediate the case "very unusual." But, he added, "I think it was appropriate." The two sides entered into mediation but were unable to agree on a resolution of the case.
In November 2006, the case went to trial a second time. That trial ended when the jury found Rollins liable for $1 million and Jocks & Jills liable for $1.25 million in compensatory and punitive damages. Forrester, who also presided over the second trial, lowered Jocks & Jills' damages to $1.05 million.
Rollins appealed, refused to post an appeal bond and, with the sports bar chain's board, took Jocks & Jills into bankruptcy, vowing through his lawyer that he had never made any of the coarse or vulgar comments attributed to him during the litigation.
Tomczyk cross-appealed, then filed a garnishment action against Rollins that resulted in Fulton County deputies seizing Rollins' company stock from his office and delivering it for sale on the Fulton County courthouse steps to satisfy the $1 million judgment against Rollins. Tomczyk acquired it for $100,000 credit against that judgment.
In 2008, a different appellate panel -- whose members included Judge Stanley F. Birch Jr., Senior Judge Peter T. Fay and U.S. District Judge Margaret C. Rodgers of Florida's Northern District sitting by designation -- reversed and remanded the case a second time.
Again, the intentional infliction of emotional distress claim was an issue.
The second panel based its reversal on a jury instruction Forrester had delivered but to which no objection had been raised prior the jury's deliberations.
The panel acknowledged that the panel in the first appeal had found that while the intentional infliction of emotional distress claim could not encompass conduct that occurred prior to Dec. 22, 1998, because such conduct was outside of the statute of limitations (Tomczyk had filed suit on Dec. 22, 2000), "[t]he district court could have properly admitted evidence of Rollins' pre-limitations period conduct for background and context purposes, with appropriate limiting instructions, and it did so here."
But the second panel took issue with the particular wording of Forrester's jury instruction on the intentional infliction claim, calling it "conflicting" and "seemingly confusing." And it suggested that because of the "highly offensive" nature of Rollins' alleged conduct prior to Dec. 22, 1998, "It is likely the jury ... considered it in deciding that Rollins intentionally inflicted emotional distress on Tomczyk."
The appellate panel was also clearly troubled by the $2 million damages award, which, combined with "an error of this magnitude resulted in a miscarriage of justice."
In a final footnote, the panel once more urged the parties to settle.
Shortly after that reversal, Jocks & Jills -- still in bankruptcy -- reached a settlement with Tomczyk, agreeing to pay her up to $200,000 if sufficient funds were raised from the auction of five Jocks & Jills restaurants in and around Atlanta. She also would become an unsecured creditor for up to an additional $400,000 in connection with the auction of the chain's other assets.
The chain's lawyers also agreed to sue Rollins in U.S. Bankruptcy Court and assign Tomczyk as much as $250,000 from any funds secured as a result of the bankruptcy litigation.
Meanwhile, Rollins sued Tomczyk in Cobb County Superior Court, seeking damages for the garnishment action that had cost him his Jocks & Jills stock and that was now based on a verdict that had been vacated.
Rollins' suit did not challenge the garnishment action as illegal but instead found fault, and sought damages for, Tomczyk's decision to collect the judgment without waiting for a resolution of the pending appeal.
Last month, the federal case went to trial a third time, this time before U.S. District Judge William S. Duffey Jr. and with Rollins as the remaining defendant. The trial lasted three days. The jury was out about an hour before finding that Rollins' behavior within a six-month period before Tomczyk was fired did not constitute intentional emotional distress.
During the trial, Cobb Superior Court Judge Dorothy A. Robinson dismissed Rollins' case against Tomczyk, finding that Tomczyk was not liable for damages because "Georgia law has no requirement that a judgment be appealed and upheld on appeal prior to the institution of collection proceedings." Robinson also found that a plaintiff is not subject to liability arising from a garnishment action.
Buckley said that the stock at issue in the garnishment action has not been returned because no one has asked for it. King described the stock, once valued at an estimated $4 million, as "worthless" but said that Tomczyk is obligated to return it.
Buckley won't say whether Tomczyk will appeal the case a third time. But, he suggested that, over time, the case has become increasingly difficult to argue as "the court system sort of whittled the claims down" and key witnesses who previously testified can't be located.
The attorney also said that the courts' decisions -- based on 11th Circuit precedents -- to view the case not as a continuing pattern of violations but rather as separate and distinct incidents, each individually subject to the statute of limitations, was a major stumbling block. That time period was determined by when Tomczyk filed suit in December 2000 and, as a result, was limited to a six-month period between Dec. 22, 1998, and June 14, 1999, when Tomczyk was terminated.
On May 1, a week after the third jury rendered its verdict for Rollins, the trustee overseeing the Jocks & Jills bankruptcy sued Rollins and his accounting firm, Rollins & Associates, on behalf of the bankrupt chain's creditors. The suit alleges that Rollins breached his fiduciary duty and defrauded the sports bar chain of millions of dollars.
The suit also claims that Rollins defrauded Jocks & Jills' creditors by transferring company funds to pay his personal lawyers and accountants, his personal credit card bills, bolster the bottom line of his accounting firm and pay for his personal car, even while "numerous creditors held claims" against the chain that predated the money transfers to Rollins.
It claims that Rollins annually billed the restaurant chain six-figure fees for work done by his employees that also included time they spent working for Rollins.
It accuses Rollins of siphoning funds from Jocks & Jills in the form of "unauthorized management fees" totaling $1.8 million that were never approved by the other investors, who never received any dividend by the chain.
And it claims Rollins subjected Jocks & Jills "to expensive and 'crippling' litigation" and obtained "improper indemnification from Jocks & Jills" for the payment of legal fees and other personal expenses.
King said Rollins holds Tomczyk responsible for the sports bar chain's bankruptcy. "After the second trial, they undertook extremely aggressive collection activities to include seizing and selling Mr. Rollins' stock on the courthouse steps," he said.
Unable to satisfy the $1 million judgment against the company and the separate $1 million judgment against Rollins, the Jocks & Jills board "made a decision to seek the protection of bankruptcy court, which ultimately caused the lenders to call the loans due. It was like a house of cards. [Tomczyk's] aggressive collection activities is what, in my view, caused the collapse of Jocks & Jills financially."
King said that while he is not defending Rollins in the trustee's suit, Rollins' position is "very, very defensible."
"Mr. Rollins was the accountant, did all the accounting, and carried all the payroll for the accounting for many years," King said. "Everything he billed Jocks & Jills ... was for the fair value of the services that were rendered," King continued. "Had [Jocks & Jills] not paid Rollins & Associates, they would have had to pay somebody outside for the same thing and probably the same amount of money.
"I'm sure he will prevail," he added.
King also said that unless Tomczyk decides to appeal a third time, "The case is over, the case is done. We lick our wounds and go back to work. My client attempts to put himself back together and go back to a normal life again. This has been a 10-year ordeal. ... It takes a toll financially. It takes an enormous toll emotionally. The ups and downs in this case for our clients were horrendous."
Observed Buckley, "The moral of the story is that there is real value to settling these kinds of cases for both parties. That is something that there were many occasions when it could have occurred, but unfortunately it didn't. The 11th Circuit urged us to engage in meaningful settlement discussions. At least one of the district judges involved in the case urged us [to settle] and tried to facilitate that. Unfortunately, it didn't happen."