Supreme Court retains damage award in Heights Payless attack

HELENA (AP) -- A $1.5-million judgment against national owners of a Billings shoe store where an employee was attacked in 1997 has been upheld Thursday by the Montana Supreme Court.

The 4-3 decision rejected all of the issues raised by Payless Shoesource Inc. in its attempt to have the verdict and damage award overturned.

The high court said the $1 million in punitive damages and $500,000 in compensatory damages were not excessive, given the emotional upheaval that Katie Onstad suffered as a result of the assault while working alone in the Payless store at night.

In her suit against the Missouri-based company, Onstad said corporate and store officials had ignored warning signs that employees working at the store were in danger. The company failed to provide her a safe workplace, argued Onstad, who was 18 at the time of the attack by Timothy Luplow.

On two previous occasions within 19 months of his attack on Onstad, Luplow had exposed himself to female employees of the Payless store. An armed robbery occurred at a Payless store in Billings seven months before the attack.

Onstad said that the company did not tell her of those incidents and that Payless should have stepped up precautions for its employees' safety by double-staffing and providing workers with personal alarms.

Payless took the position that the assault on Onstad was random and unpredictable.

The jury awarded Onstad money to compensate her for financial losses related to the psychological scars from the assault and ordered Payless to pay the punitive damages as punishment for its failure to ensure Onstad's safety.

On appeal, Payless contended that the case belonged in the state Workers' Compensation Court -- where punitive damages are not allowed -- because Onstad was injured while on the job.

But the Supreme Court said that Onstad's trauma was related to the mental stress of dealing with the attack and not any physical injuries, so the case was properly in District Court as a civil suit.

The court also concluded the punitive damages were appropriate, given the pain and suffering Onstad suffered after the crime and the company's refusal to do something about the safety of employees at the Billings store.

Payless also had eliminated all local and regional spending for safety and security and installed multiple security systems in the Billings store shortly after Onstad was attacked, Chief Justice Jean A. Turnage noted in his majority opinion.

The majority found no fault with police officers testifying that Luplow's attack on Onstad was predictable, in light of his past crimes.

But the three dissenting justices -- Bill Leaphart, Karla Gray and James Nelson -- said such testimony should have been prohibited. They said the mistake was serious enough to overturn the verdict against Payless and require a new trial.

Those joining Turnage in the majority were Justices Jim Regnier, Terry Trieweiler and William E. Hunt Sr.