Title: Sides v. John Cordes, Inc.

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

Sides v. John Cordes, Inc.  Sides v. John Cordes, Inc. 1999 OK 36 981 P.2d 301 70 OBJ 1445 Case Number: 89207 Decided: 05/04/1999 Supreme Court of Oklahoma TOM C. SIDES and JUDY C. SIDES, Plaintiffs-Appellees, v. JOHN CORDES, INC., Defendant-Appellant. [981 P.2d 302] ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. IV ¶0 Tom C. Sides and Judy C. Sides brought in the District Court, Cotton County, Leo A. Watson, Jr., trial judge, a fraud action for actual and punitive damages arising from their purchase of an automobile from John Cordes, Inc., a car dealership located in Walters, Oklahoma. Plaintiffs alleged that the automobile had been represented as new when in fact it had been damaged and repaired. Trial by jury having been waived, the court entered judgment for the plaintiffs, [981 P.2d 303] awarding them both actual and uncapped punitive damages. Defendant appealed. The Court of Civil Appeals, Division 4, affirmed the judgment's determination of liability and of the amount awarded in actual damages, but reduced punitive damages to an amount equal to that of actual damages. On certiorari granted on plaintiffs' petition, THE COURT OF CIVIL APPEALS' OPINION IS VACATED IN PART; THE TRIAL COURT'S JUDGMENT IS AFFIRMED. Tommy L. Sims, John P. Zelbst Law Firm, Lawton, Oklahoma, for Appellees. Manville Redman and Robert Ross, Lawton, Oklahoma, for Appellant. OPALA, J. ¶1 The dispositive issue tendered on certiorari is whether the evidence adduced in this jury-waived trial of an action at law supports an award of punitive damages in excess of the amount of actual damages. We answer in the affirmative. I THE ANATOMY OF LITIGATION ¶2 Tom C. Sides and Judy C. Sides ("the Sides" or "plaintiffs") purchased in November 1994 what they believed to be a new automobile from John Cordes, Inc., a car dealership located in Walters, Oklahoma ("the dealership" or "defendant"). The salesman did not disclose to the Sides that the car they were buying had been damaged in a storm nor that it had required substantial repairs. Only after taking the car home and driving it for a few days did the Sides realize that their "new" car was not pristine. ¶3 The Sides filed suit against defendant, alleging that by failing to disclose the damage and repair history of the automobile and selling the car to them as if it were a new car, defendant had committed fraud for which plaintiffs were entitled to actual damages. The Sides also complained that the defendant's failure to disclose the relevant information was done either intentionally or with gross negligence, which they invoked as a predicate for a punitive damages award. ¶4 The parties waived trial by jury and the cause was presented to the court on 13 September 1996. Approximately five months later, the trial judge reached his decision and entered judgment in favor of the plaintiffs, awarding them actual damages in the amount of $4,525.00 and punitive damages in the amount of $45,250.00. In awarding punitive damages, the court stated, in reference to the applicable statutory language, that it had found "clear and convincing evidence of defendant's false representations", warranting the assessment of punitive damages in excess of the actual damages award. ¶5 Defendant appealed for corrective relief from the actual as well as punitive damages award. ¶6 We granted certiorari on plaintiffs' petition and now affirm the trial court's judgment. II THE RECORD OF THE PROCEEDINGS BELOW CONTAINS COMPETENT EVIDENCE TO SUPPORT THE TRIAL COURT'S AWARD OF PUNITIVE DAMAGES IN EXCESS OF THE AMOUNT OF ACTUAL DAMAGES ¶7 The Sides' common-law fraud claim is based upon the defendant's failure to [981 P.2d 304] disclose to them the fact that the car they were purchasing had been damaged and repaired. This failure to disclose amounted to an affirmative, false representation that the automobile was new. Oklahoma statutory law imposes a duty on every dealer to disclose in writing to the purchaser of a new or previously unregistered motor vehicle any damage known by the dealer to have been sustained by the vehicle and subsequently repaired, if the value of the repairs exceeds three percent (3%) of the manufacturer's suggested retail price of the vehicle or five hundred dollars ($500.00), whichever is greater. ¶8 As for punitive damages, the Court of Civil Appeals departed from the trial court's judgment, holding that while there was competent evidence upon which punitive damages equal to the sum of actual damages could be awarded, ¶9 The sole issue before us on certiorari today ¶10 The imposition of punitive damages is governed by statute. At the time this case came to trial, the statute controlling a punitive damages award, A. In any action for the breach of an obligation not arising from contract, where the defendant has been guilty of conduct evincing a wanton or reckless disregard for the rights of another, oppression, fraud or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example, and by way of punishing the defendant, in an amount not exceeding the amount of actual damages awarded. Provided, however, if at the conclusion of the evidence and prior to the submission of the case to the jury, the court shall find, on the record and out [981 P.2d 305] of the presence of the jury, that there is clear and convincing evidence that the defendant is guilty of conduct evincing a wanton or reckless disregard for the rights of another, oppression, fraud or malice, actual or presumed, then the jury may give damages for the sake of example, and by way of punishing the defendant, and the percentage limitation on such damages set forth in this section shall not apply. B. The provisions of this section shall be strictly construed.7 ¶11 Section 9 expressly introduces two levels for an award of punitive damages. They may be capped at the level of actual damages or left uncapped and unrestricted by the amount of actual damages. Which level of punitive damages a jury may consider in a given case is determined by which, if either, of two different preliminary evidentiary findings is made by the trial judge. First, if the trial judge determines that there is any competent evidence demonstrating that the defendant has engaged in at least one of the statutorily enumerated behaviors,8 the judge must submit to the jury the plea for capped punitive damages. Second, if the judge finds that there is clear-and-convincing evidence that the defendant is guilty of at least one of the enumerated behaviors, the trial judge must submit to the jury the plea for uncapped punitive damages. Both of these threshold rulings present issues of law for the trial judge.9 Either completes the first stage of the process that leads to an award of punitive damages and opens the second stage - the jury's ultimate decision whether the evidence actually warrants punitive damages, and if so, in what amount.10 ¶12 In rejecting the trial court's ruling, the Court of Civil Appeals held that evidence of the statutorily described conduct had not been demonstrated by clear-and-convincing evidence, as required by statute, but had merely been "plainly shown". The appellate court concluded that the defendant's acts were "the result of the dealership's neglect or omission in records keeping and management information rather than from . . . some design to harm the plaintiff-buyers." The plaintiffs argue on certiorari that the Court of Civil Appeals improperly substituted its own findings for those of the trial court. We agree. ¶13 The first step in our review is to consider whether the evidence establishes, clearly and convincingly, the existence of facts which would permit the trial judge, acting as fact finder in the second stage of punitive damages deliberation, to assess uncapped punitive damages. It is important to keep in mind that the clear-and-convincing standard is applicable only to the threshold question of whether the jury may consider [981 P.2d 306] uncapped punitive damages.11 ¶14 When reviewing the proof's sufficiency, the question is whether a prima facie case has been presented.12 A prima facie case is made out by that quantum of proof which, if unexplained or uncontradicted, is sufficient to establish a given fact and to uphold a judgment in favor of the issue which it supports, but which may be refuted by other evidence.13 The evidence may be direct or it may be such as supports an inference in favor of the fact in question.14 In the context of a punitive damages award, one's successful presentation of a prima facie case gets the issue of punitive damages to the jury. In reviewing whether the plaintiffs in this case have presented a prima facie case for submission of uncapped punitive damages, this court must bear in mind the higher clear-and-convincing standard of proof.15 ¶15 Fraud is one of the behaviors expressly enumerated in §9 as authorizing the court to submit to the fact finder the question of whether punitive damages are to be awarded. The trial court found clear-and-convincing evidence that the defendant committed fraud in the sale of the automobile to the Sides.16 We ascribe no legal fault to this determination. The record contains direct evidence which, taken together with all reasonable inferences in plaintiffs' favor, is sufficient to present a clear and convincing prima facie case of fraud. Hence, the trial court's threshold finding passes muster under the pre-1995 version of §9 and justifies the trial judge in moving the case to the second step in the process of considering a punitive damages plea, i.e. his decision in fact whether to impose the award.17 ¶16 [981 P.2d 307] We next consider whether the trial judge, acting as fact finder, erred in assessing the punitive damages actually awarded. We hold that he was not. The findings of a trial court sitting without a jury in a case of legal cognizance are to be given on review the same weight as that which would be accorded the verdict of a well-instructed jury.18 If there is any evidence tending to support the findings and judgment of the trial court at a bench trial of a law case, the findings and judgment will not be disturbed, even if the record might support a conclusion different from that reached at nisi prius.19 The credibility of witnesses and the effect of and weight given to their testimony, as well as the resolution of conflicting or inconsistent testimony, are questions of fact to be determined by the trier.20 We have carefully examined the entire record and hold that the trial court's conclusion is consistent with the reasonable inferences which may be drawn from the evidence as a whole.21 Its judgment may not be disturbed simply because the record might also support a contrary conclusion. III THE JURY'S VERDICT (OR ITS FUNCTIONAL EQUIVALENT - - THE DECISION OF THE JUDGE AFTER A BENCH TRIAL IN A CASE OF LEGAL COGNIZANCE) IS TO BE ACCORDED THE UTMOST DEFERENCE ON APPEAL ¶17 Trial by jury is a right guaranteed by the Constitution of the State of Oklahoma.22 This constitutional provision imposes upon the appellate courts the obligation to accord on review the greatest deference to the determination by the trier of fact.23 We must not substitute our subjective view for that of the trier unless the trier's decision is manifestly wrong.24 Although deference to [ 981 P.2d 308 ] the trier of fact does not relieve appellate courts from their duty to review fact findings, it does mean that judgment on a verdict cannot be disturbed merely because we would have reached a different decision. This constitutional obligation circumscribes appellate scrutiny and compels the decision we reach in this case today.25 IV SUMMARY ¶18 In the two-stage process of arriving at a punitive damages award, we initially review the trial court's threshold determination of whether the cap on punitive damages should be removed to discover whether the nisi prius proponent has established, clearly and convincingly, a prima facie case for the cap's removal. On the record before us, we find no error in the trial court's view that a prima facie case for removal of the statutory cap had been established. Once that determination has been made, the case moves to the second step, in which the trier of fact deliberates upon all the evidence and decides whether punitive damages should in fact be awarded and if so, on their quantum. We review this decision to ascertain whether there is competent evidence to support it. The trial judge saw the witnesses and observed their demeanor. Their credibility and the effect of and weight to be given their testimony is for the trier to determine. We hold that, on this record, there is competent evidence to support the judgment by the trial court, sitting as a well-instructed jury, that punitive damages in the amount actually awarded were the plaintiffs' due. ¶19 THE COURT OF CIVIL APPEALS' OPINION IS VACATED IN PART; THE TRIAL COURT'S JUDGMENT IS AFFIRMED ¶20 SUMMERS, C.J., and HARGRAVE, V.C.J., and HODGES, LAVENDER, OPALA, WILSON, KAUGER, and WATT, JJ., concur; ¶21 FOOT