Case Title: St. Regis Paper Co. v. Watson

Citation: 428 So. 2d 243

Docket Number: 61873

State: florida

Court: Florida Supreme Court

Date: 1983-03-03T00:00:00Z

Document:
428 So. 2d 243 (1983)
ST. REGIS PAPER COMPANY, Petitioner,
v.
J.B. WATSON, Sr., Respondent.
No. 61873.

Supreme Court of Florida.
March 3, 1983.
*244 William L. Durden, William G. Cooper and John F. MacLennan of Kent, Watts, Durden, Kent & Mickler, Jacksonville, for petitioner.
Mitzi Cockrell Austin of Scruggs & Carmichael, Gainesville, for respondent.
OVERTON, Justice.
This is a petition to review the decision of the First District Court of Appeal reported as St. Regis Paper Co. v. Watson, 409 So. 2d 75 (Fla. 1st DCA 1982), which we find directly conflicts with our decision in Wackenhut Corp. v. Canty, 359 So. 2d 430 (Fla. 1978). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.
We find that the trial judge failed to properly articulate his reasons for granting a new trial, as required by Wackenhut, and, further, that, absent a finding that the jury was improperly influenced or that some fraud contaminated the verdict, the trial judge had no authority to grant a new trial on the grounds of inadequate punitive damages.
*245 The facts reflect that the respondent, J.B. Watson, Sr., employed a forester, John Hudson, to represent his interests in the sale of timber. Hudson contacted St. Regis, whose foresters performed a timber cruise and ascertained that 2300 cords of timber could be taken from Watson's land. St. Regis advised Hudson that it would purchase Watson's timber for $57,500, based on the price of $25 per cord. St. Regis and Watson entered into a contract in which Watson agreed to sell all the timber on his land for $52,900, payable in two installments, $29,900 in February, 1976, and $23,000 on January 2, 1977.
St. Regis paid the $29,900 installment with a check payable to Mr. Watson in the amount of $3,726 for reforestation, a check to Mr. Hudson in the amount of $3,174, representing the six percent brokerage fee owed Hudson by Watson, and a check to Mr. Watson in the amount of $23,000. The company also paid John Hudson the sum of $4,600 as a finder's fee. The final $23,000 installment was paid with a check made payable to John Hudson as Mr. Watson's escrow agent. The check was delivered to Hudson prior to January, 1977, and brought the total amount paid, including the finder's fee, to $57,500.
Watson brought suit against St. Regis, alleging in count one that St. Regis had intentionally, willfully, and maliciously deprived him of the fair value of his property, that the price on the face of the written contract was not the fair market value at the time of the sale, and that Hudson was an undisclosed agent of St. Regis. In count two, Watson sought equitable reformation of the contract so that it would reflect the fair market value of the timber. In count three, Watson alleged a breach of the contract and sought damages in the amount of $23,000 because the final payment on the contract had not been delivered to him by Hudson.
St. Regis confessed judgment as to the value of the timber, agreeing that the timber actually severed was valued at $82,911.25, calculated by the actual cut of 3,316.45 cords at $25 per cord. There was no dispute that Hudson had received a finder's fee from St. Regis in the amount of $4,600 and a brokerage commission of $3,174 from Watson. The parties agreed that Watson was entitled to compensatory damages in the amount of $30,011.25 because of St. Regis's fraud and deceit. The single issue submitted to the jury on the first count was whether punitive damages should be awarded against St. Regis. On this first issue, the jury awarded punitive damages to Watson in the amount of $5,585.25. The second issue concerned whether St. Regis had properly delivered Watson's final check for $23,000. On this issue the jury found for St. Regis.[1]
Watson filed a motion for a new trial on the grounds that: (1) there existed an irreconcilable and material inconsistency between the verdicts entered by the jury; (2) the verdict was against the manifest weight of the evidence; (3) in reaching the verdict it appeared the jury may reasonably have been misled or confused by the charge or instruction; and (4) in reaching the verdict the jury misconceived the law or evidence *246 or did not consider all elements of damage and as a result awarded grossly inadequate damages. No specific allegations were made in the motion to support these conclusory grounds.
The trial judge entered an order granting a new trial in which he stated that the uncontroverted evidence established that St. Regis had a net worth of one billion dollars and that, therefore, $5,585.25 in punitive damages was "grossly inadequate." In his order, the judge articulated in general terms the reasons for this conclusion, stating that
St. Regis took an appeal to the First District Court of Appeal. While the appeal was pending, the district court, on motion of respondent Watson, remanded the cause for determination of whether a jury interview should be conducted. This action was precipitated by the sworn statement of Watson's counsel alleging that he had uncovered evidence of jury misconduct in an oral communication with one of the jurors. The district court ordered a post-trial jury interview by a master appointed for that purpose. The special master, in a report approved by a trial judge, found:
The district court proceeded to hear the cause on appeal, and in affirming the trial court's action in granting a new trial, held that the evidence of the financial resources of the defendant "properly gave the trial judge a standard in determining whether the award of punitive damages is `either inadequate or excessive.'" St. Regis Paper Co., 409 So. 2d  at 77 (citing Spencer Ladd's, Inc., v. Lehman, 167 So. 2d 731 (Fla. 1st DCA 1964)). The court concluded by finding that St. Regis had not sustained its burden of showing that the lower court abused its discretion in granting a new trial.
We find that the trial judge's order was defective on its face. The trial judge supported his order with only legal reasoning and general conclusions which are not sufficient to meet the standards set out in Wackenhut. Wackenhut mandates that a trial judge granting a new trial must give specific reasons to support the conclusion that either "the verdict is against the manifest weight of the evidence or was influenced by considerations outside the record." 359 So. 2d  at 435. The majority in Wackenhut believed that these reasons must be included in the order granting a new trial "so that appellate courts may be able to fulfill their duty of review by determining whether judicial discretion has been abused." Id.
In the instant case, the trial judge's order rested solely on his determination that since the defendant had a large net worth, the punitive damages award should have been proportionately large. This determination is not sufficient, by itself, to show that the verdict was against the manifest weight of the evidence. The jury's major duty in determining the amount of punitive damages is to assess the appropriate degree of punishment to be imposed on the defendant commensurate with the enormity of the offense; the defendant's financial position is only one factor to be considered by the jury. Rinaldi v. Aaron, 314 So. 2d 762 (Fla. 1975); Lehman v. Spencer Ladd's, Inc., 182 So. 2d 402 (Fla. 1965); Fla.Std. Jury Instr. (Civ.) 6.12. Other factors which the jury may consider include *247 "the nature, extent, and enormity of the wrong, the intent of the party committing it and all circumstances attending the particular incident, as well as any mitigating circumstances." Rinaldi, 314 So. 2d  at 763.
In addition, the trial judge did not give any explanation for his conclusion that the jury considered matters outside the record. The record in this case clearly indicates a contrary conclusion. Indeed, the unrefuted supplemental special master's report found that the jury acted properly in all respects and was not influenced by matters outside the record.
Not only did the trial judge fail to articulate his reasons for granting a new trial, as required by Wackenhut, he had no authority under the circumstances of this case to grant a new trial because of an inadequate punitive damages verdict. It is well settled that a new trial may be ordered when the court properly concludes that unusual circumstances render a punitive damages award excessive. Arab Termite and Pest Control of Florida, Inc. v. Jenkins, 409 So. 2d 1039 (Fla. 1982); Wackenhut. On the other hand, there is no authority allowing the granting of a new trial solely on the ground of inadequacy of punitive damages. The only cases directly ruling on this question are Wangen v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437 (1980), and Louisville & Nashville Railroad v. Street, 164 Ala. 155, 51 So. 306 (1910). Both cases hold that there is no right to a new trial on this ground.[2]
We note that the recognized rule allows a plaintiff to challenge as inadequate a compensatory damages award. At first glance, it seems unfair that a plaintiff cannot likewise challenge as inadequate a punitive damages award. To understand the differing treatment, it is necessary to distinguish between compensatory and punitive damages. Compensatory damages, as the words indicate, are awarded to compensate an injured person for the acts of the wrongdoer, and once liability is established, an injured person is entitled as a matter of right to compensatory damages. Fisher v. City of Miami, 172 So. 2d 455 (Fla. 1965). The trial court may find that an award is inadequate to fully compensate the plaintiff and may order a new trial on this basis. Roberts v. Bushore, 182 So. 2d 401 (Fla. 1966); Radiant Oil Co. v. Herring, 146 Fla. 154, 200 So. 376 (1941).
In contrast, a plaintiff has no right to punitive damages. Fisher; Florida East Coast Railroad v. McRoberts, 111 Fla. 278, 149 So. 631 (1933). Punitive damages are awarded to punish the wrongdoer and to deter the commission of similar acts in the future. Mercury Motors Express, Inc. v. Smith, 393 So. 2d 545 (Fla. 1981); Wackenhut; Campbell v. Government Employees Insurance Co., 306 So. 2d 525 (Fla. 1974). Once the plaintiff has introduced evidence to establish a basis for recovery, the jury, acting on behalf of the public, has the responsibility to determine whether to award punitive damages and, if so, what amount would best serve the public policy of punishment and deterrence. Wackenhut; Wangen; Louisville & Nashville Railroad. As counsel for respondent conceded in oral argument, a jury may decide not to award punitive damages even though the evidence would support such an award, Wackenhut, and the plaintiff would have no recourse unless he could prove fraud or an improperly influenced jury. In such a situation, the plaintiff must accept the jury verdict since it is not appealable. Wangen. It necessarily follows that, if the jury may choose to award no punitive damages, it may also choose to award as small an amount as it deems appropriate to meet the goals of punishment and deterrence.
Our holding in this case might seem inconsistent with the rule allowing a defendant to challenge a punitive damages award as excessive. On close examination, however, the holding logically derives from *248 the dual purposes of punishment and deterrence underlying punitive damages. While a plaintiff has no right to receive any punitive damages, once the jury decides to award such damages, the award must not bankrupt the defendant, Lehman v. Spencer Ladd's, Inc., and must be proportionate to the magnitude of the wrong committed. Wangen. A defendant does have a right to be free from unreasonable punishment inflicted by an excessive punitive damages award. Louisville & Nashville Railroad.
We hold that a trial judge has no authority to order a new trial solely because, in his view, the punitive damages awarded by the jury were inadequate in comparison to the defendant's net worth. We recognize, however, that a new trial may be ordered if the trial judge finds that the jury awarded an unreasonably small amount of punitive damages because the jury was improperly influenced or because some fraud contaminated the jury verdict. Lassitter v. International Union of Operating Engineers, 349 So. 2d 622, 627 (Fla. 1977). The order so holding must, of course, comply with the requirements of Wackenhut.
For the reasons expressed, we disapprove the decision of the district court and remand with directions for reinstatement of a judgment based upon the jury verdict.
It is so ordered.
ALDERMAN, C.J., and BOYD, McDONALD and EHRLICH, JJ., concur.
ADKINS, J., dissents with an opinion.
ADKINS, Justice, dissenting.
I dissent.
The majority opinion unfairly relies upon a small excerpt from the order granting a new trial, and ignores the balance of the order. The trial judge made the following findings:
Upon appeal the entire order was considered and the appellate court said:
St. Regis Paper Co. v. Watson, 409 So. 2d 75, 77-78 (Fla. 1st DCA 1982).
This follows our reasoning and holding concerning adequacy of punitive damages in Lassitter v. International Union of Operating Engineers, 349 So. 2d 622 (Fla. 1976), where we said:
349 So. 2d  at 627 (emphasis supplied).
The size of the punitive damages awarded, when considered in connection with the assets of the defendant, certainly carried implication of passion or prejudice, corruption, partiality, improper influences, or the like. It is ridiculous to say that such a verdict would be upheld just because the jurors denied that any improper influences existed. By his order the trial judge has shown that he observed the witnesses, considered the facts, and weighed the law. The district court was correct in affirming the judgment of the trial judge.
[1]  The special verdict form rendered by the jury is as follows:

SPECIAL VERDICT
We, the jury, find as follows:
Issue # 1
(X) We find for the Plaintiff, The Estate of J.B. WATSON, SR. on the issue of fraud and deceit, and assess compensatory damages of $30,011.25, and assess punitive damages of $5,585.25 against Defendant, ST. REGIS PAPER COMPANY.
OR
() We find for the Defendant, ST. REGIS PAPER COMPANY, on the issue of fraud and deceit. We award the Estate of J.B. WATSON, SR., the amount of $30,011.25, as compensatory damages for the difference in the fair market value of the timber cut.
Issue # 2
() We, the jury, find for the Plaintiff, the Estate of J.B. WATSON, SR., on the issue of delivery of the final payment under the contract and assess damages against the Defendant, ST. REGIS PAPER COMPANY, in the amount of $23,000.00.
OR
(X) We, the jury, find for the Defendant, ST. REGIS PAPER COMPANY, on the issue of delivery of the final payment of $23,000.00.
[2]  For a general discussion of this topic, see Ghiardi, Punitive Damages in Wisconsin, 60 Marq.L.Rev. 753 (1977).