ST. LOUIS — A Missouri appellate court ruled that Oasis Foot Spa & Massage and its managing member must pay compensatory and punitive damages to six individuals who were allegedly sexually assaulted by an employee.
Oasis Foot Spa & Massage and Zhengzhao Lu appealed the circuit court’s judgment that awarded compensatory and punitive damages to six plaintiffs who were allegedly sexually assaulted by Xing Wu Zhang, an Oasis employee.
The court affirmed the lower court’s decision, according to the Oct. 8 opinion filed in the Missouri Court of Appeals-Eastern District.
Oasis was a massage therapy business owned by Lu, with his wife, Angela Zuo, managing daily operations.
Zuo hired Zhang as a massage therapist despite his lack of a Missouri massage therapy license. Zuo did not perform a background check or contact his previous employer.
Zhang was hired in early 2019 and began performing full-body massages. Multiple women, including the plaintiffs, reported sexual assault by Zhang, which followed a similar pattern of Zhang pinning and assaulting them during massages.
In September 2019, after a victim reported Zhang to the police, he was arrested but later released on bail, which Lu and Zuo paid. Zhang failed to appear at his arraignment in January 2021.
In response to the assaults, the Missouri Board of Therapeutic Massage closed Oasis, and the company dissolved in mid-2020.
In October 2020, the plaintiffs sued Oasis for negligent hiring, retention and supervision, seeking compensatory and punitive damages. During the trial, the jury found in favor of the plaintiffs, holding Oasis and Lu liable and awarding damages accordingly.
Appellants argued that the circuit court erred by allowing an adverse inference for the destruction of business records, which Zuo admitted to disposing of after the lawsuit was filed.
The appellants claimed there was no evidence of bad faith, fraud, or deceit.
However, the court found that Oasis had received a preservation letter and had a regulatory obligation to maintain records, making the spoliation doctrine applicable. Because the appellants did not object during the trial, this issue was not preserved for appeal.
The appellants challenged the admission of testimony by an expert witness regarding Zhang’s prior misconduct, derived from police reports, and Oasis’s failure to perform due diligence in hiring.
The court ruled the expert could reasonably rely on these reports, and her testimony was admissible since she did not offer the police reports to assert their truth but to demonstrate their existence. The court also allowed the expert to testify on Lu and Zuo’s ongoing involvement in the spa industry, as this fell within her area of expertise.
The appellants contended that jury instructions regarding punitive damages were misleading, as they did not clarify that Lu was being sued as a statutory trustee.
The court rejected this argument, ruling that the instructions properly guided the jury to assess damages based on Oasis’s conduct, not Lu’s actions.
Finally, the appellants argued that the punitive damages awarded were excessive and violated due process.
The court disagreed, finding the damages proportionate to the harm caused and that the reprehensibility of the defendants’ conduct, which included willful disregard for the safety of their clients, justified the punitive awards.
The appellants were represented by Lee M. Baty and Elizabeth C. Carver
The respondents were represented by Todd R. Nissenholtz and Thomas E. Schwartz.
Attorneys declined to comment on the matter.
Missouri Court of Appeals, Eastern District-Division Four case number: ED112202