Case Title: Gillespie v. Seymour

Citation: 253 Kan. 169, 853 P.2d 692

Docket Number: 68,691

State: kansas

Court: Kansas Supreme Court

Date: 1993-05-28T00:00:00Z

Document:
253 Kan. 169 (1993)
853 P.2d 692
WARREN BROWN GILLESPIE and POLLY GILLESPIE TOWNSEND, Plaintiffs/Appellees,
v.
DOROTHEA WOFFORD SEYMOUR, as Co-Trustee of the BROWN-GILLESPIE TRUST ESTATE; DOROTHEA WOFFORD SEYMOUR, individually; PAUL A. SEYMOUR, JR.[*]; PAUL SEYMOUR, III; RUTH BASSETT; ROBERT W. BURDGE; GRANT THORNTON, an accounting partnership; ARROWHEAD PETROLEUM, INC., a Kansas corporation; and BIG SPRINGS DRILLING, INC., a Kansas corporation, Defendants/[*]Appellant, and DOROTHEA WOFFORD SEYMOUR, as Co-Trustee of the BROWN-GILLESPIE TRUST ESTATE; and DOROTHEA WOFFORD SEYMOUR, Individually, Defendants and Third-Party Plaintiffs,
v.
JAMES PAUL GILLESPIE, Executor of the Estate of Pauline Brown Gillespie, Deceased, Third-Party Defendant.
No. 68,691

Supreme Court of Kansas.
Opinion filed May 28, 1993.
Terry L. Mann, of Martin, Pringle, Oliver, Wallace & Swartz, of Wichita, argued the cause, and Robert Martin, of the same firm, was with him on the briefs for appellant.
Jerry D. Bogle, of Young, Bogle, McCausland, Wells & Clark, P.A., of Wichita, argued the cause, and Glenn D. Young, Jr., of the same firm, was with him on the brief for appellees.
The opinion of the court was delivered by
McFARLAND, J.:
This is an appeal from an award of punitive damages entered in an action by the beneficiaries of a trust for recovery of damages for oil and gas investments made by the Trust.
The factual background is complex and is set forth in Gillespie v. Seymour, 250 Kan. 123, 823 P.2d 782 (1991), hereinafter referred *170 to as Gillespie I. Originally, punitive damage awards were entered as follows:
For the period prior to July 1, 1987:
For the period after July 1, 1987:
In Gillespie I, we held the entry of punitive damage awards against Dorothea and Paul Seymour, III, were improper and reversed the same. As to the punitive damage awards against Paul Seymour, Jr., we stated:
(2) $5 million.
On remand, no additional evidence was submitted on the issue of punitive damages. Oral arguments were heard and briefs filed. The district court's decision thereon is set forth in its memorandum opinion as follows:
"MEMORANDUM OPINION
The parties agree that an appropriate award under K.S.A. 1992 Supp. 60-3701(e)(1) would be $865,861 (Seymour's highest gross annual income in the statutory five-year period). The district court stated that the profitability of defendant's misconduct exceeded the limitation of K.S.A. 1992 Supp. 60-3701(e)(1) and that the *172 award should be entered under K.S.A. 1992 Supp. 60-3701(f). The award was fixed at $2,089,250  the exact amount of the aggregate punitive damage award entered against Seymour, Jr., in Gillespie I. There is no indication as to how this figure was reached under subsection (f) of the statute. We have only the enigmatic statement, "I will not change the amount of the award because of the reversals."
What the district court characterized as plaintiffs' suggestion that the maximum award under subsection (f) is $6,439,039 is apparently based upon one and one-half times the compensatory damages entered in Gillespie I. On appeal, plaintiffs argue the award is supportable on the basis of the $2.6 million invested in Arrowhead Petroleum, Inc., by the Trust which, when multiplied one and one-half times, comes to $3.9 million. There is no punitive damage award against Arrowhead, of which Seymour owns 51 percent. Seymour contends there is no evidence admitted from which his "profit" could fairly be determined, as the gross receipts to Arrowhead from the Trust, with no deduction for expenses, in no way equate to Seymour's "profit" on the transaction. There is nothing to indicate how the trial court defined or computed Seymour's profit. Little would be gained by speculating on how the district court arrived at the punitive damage award imposed on remand.
The enactment of K.S.A. 1992 Supp. 60-3701 (and its companion K.S.A. 1992 Supp. 60-3702) represents a substantial change in the award of punitive damages in Kansas. Prior thereto, the trier of fact determined the amount of damages based upon rather nebulous factors. Appellate review thereof was limited. We stated the general rules relative to punitive damages in Binyon v. Nesseth, 231 Kan. 381, 386, 646 P.2d 1043 (1982), as follows:
Under K.S.A. 1992 Supp. 60-3701, a bifurcated proceeding is established. The trier of fact determines if punitive damages should be awarded. The court, in a separate proceeding, then establishes the amount thereof. A substantial list of factors is set forth in the court's consideration in determining the amount of the award. Limitations on the amount of the award are set forth in subsections (e) and (f) as follows (repeated for convenience):
(2) $5 million.
We believe that it is the clear legislative intent of K.S.A. 1992 Supp. 60-3701(e) and (f) that sufficient findings of fact be made by the district court to afford meaningful appellate review of the size of the award. If the award entered had been $865,861 under (e)(1) it would have been sufficient herein to state that amount, as the parties had agreed on the figure. The district court opted, however, to award punitive damages subject to the restriction in *174 subsection (f). It was, therefore, incumbent upon the district court to make sufficient findings of fact to afford meaningful appellate review. This, obviously, did not occur herein and the punitive damage award against Paul Seymour, Jr., must, again, be reversed and the matter remanded for redetermination. Under the totality of the circumstances, we conclude that, upon remand, the matter should be assigned to a different district court judge.
The judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.