$1M damage award in Payless case upheld

District Judge Russell Fagg on Monday affirmed a $1 million punitive damage award to a young Billings woman who was sexually assaulted at Payless Shoesource where she worked in 1997.

A 12-person District Court jury Friday awarded the woman a total of $1.5 million -- $500,000 for actual damages and $1 million in punitive damages -- from the Kansas-based shoe-store chain after a four-day civil trial in Billings. The award is one of the largest judgments ever in Yellowstone County.

Under Montana law, the judge has to approve the jury's decision. Fagg heard arguments from both sides Monday morning and issued his ruling in the afternoon.

"The Court strongly believes in the American jury system and the collective wisdom of 12 people,'' Fagg said in his order.

Fagg said the case was "well tried by counsel for both parties" and that the jury was unanimous in answering all six of the questions in the special verdict form. Only two-thirds of the jury needed to agree on the nonpunitive damage award issues.

The victim, whom The Gazette has chosen not to identify, sued Payless Shoesource after being sexually assaulted by Timothy Luplow -- one of the most prolific sexual offenders ever in Yellowstone County -- on Sept. 23, 1997, at the Payless store at 895 Main St. The victim, who was 18 at the time, was alone when she was attacked and had been an employee for only two months.

Luplow was eventually charged with 18 felony and misdemeanor sex crimes dating back to February 1996. He pleaded guilty to the Payless assault in an agreement with the Yellowstone County attorney and was sentenced to 23 years in prison and 17 years of probation. Prosecutors dropped the 17 other charges.

The store did not have any security cameras or an under-counter alarm, even though it had been robbed at gunpoint in February 1997 and another woman employee had been sexually assaulted in May 1997. The victim, represented by Billings attorney Clifford Edwards, said in her lawsuit that Payless had not told her about the previous crimes at the store.

Payless' attorney, Thomas Singer, of Billings, said after the verdict that the company was sorry for what happened to the woman but thought the jury went too far in its award. He said then the company has not decided whether to appeal.

The judge had to consider a number of criteria in ruling on the punitive damages. Among the findings, Fagg found that the jury agreed with the victim's argument that prior incidents at Payless put the store on notice that additional security was needed. Also, the judge found that the intent of the store in committing the wrong was found by the jury to rise to the level of actual malice, which is defined as knowing or intentionally disregarding facts that create a high probability of injury to the plaintiff.

The punitive damages awarded in this case are approximately 1/8th of 1 percent of Payless' net worth, Fagg's order said. The company's net worth is approximately $700 million to $800 million, the order said.