Title: Sheffield v. Andrews

State: alabama

Issuer: Alabama Supreme Court

Document:

679 So. 2d 1052 (1996)
Willie E. SHEFFIELD
v.
Lillian P. ANDREWS and Minnie May Pugh.
1941693.

Supreme Court of Alabama.
April 12, 1996.
Rehearing Overruled July 19, 1996.
Opinions Dissenting from Overruling of Rehearing July 19, 1996.
Edward P. Turner, Jr. and Halron W. Turner of Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom, for appellant.
Wyman O. Gilmore, Jr. and Lamar C. Johnson of Gilmore Law Office, Grove Hill, for appellees.
COOK, Justice.
Willie E. Sheffield appeals from a judgment awarding Lillian P. Andrews, individually, and as attorney in fact for her sister, Minnie May Pugh, who is incapacitated, $10 in compensatory damages and $1,000,000 in punitive damages on Andrews's claim that Sheffield and Andrews's former attorney, James Tucker, were part of a conspiracy to defraud her and her sister out of their property. Andrews, who was 91 years old at the time, alleges that Sheffield paid Tucker $15,000 to obtain title to property owned by Ms. Andrews and her sister and that Tucker did so by misrepresenting to Ms. Andrews, who had poor eyesight, the content of certain documents signed by her. Those documents purported to transfer Andrews's property interest to Sheffield. After Andrews signed the documents, she cut timber on the property twice and executed a hunting lease on the property. Tucker, in an attempt to stop the timber cuttings, informed Andrews that she would have tax problems if she continued to cut timber; Sheffield attempted to circumvent the hunting lease by offering to purchase it from the lessee for $10,000.
*1053 In addition, Tucker, unknown to Andrews, added to a will he prepared for Andrews language stating that upon Andrews's death, the property, valued at well over $1,000,000, would be sold to Sheffield for $250,000 or $500,000, depending on the interest owned by Ms. Andrews. The price was dependent on whether Andrews, at the time of her death, had inherited the interest of her sister, Ms. Pugh. Sheffield, thereafter, deposited $428,000 with Tucker for payment to Andrews's estate upon her death. Tucker put $400,000 in a certificate of deposit in trust for Sheffield and apparently spent the remaining $28,000. Andrews did not know about the money and never received any benefit therefrom. Upon learning that Sheffield claimed title to her property based on the documents signed by her, Andrews sued, seeking to quiet title to the property and seeking damages, alleging that Sheffield and Tucker were guilty of fraud.
The jury returned a verdict of $10 in compensatory damages and $2,000,000 in punitive damages. Following a Hammond hearing, the trial court reduced the punitive damages award to $1,000,000. On appeal, Sheffield contends that Andrews should not have been permitted to "rescind" the alleged contract and at the same time collect punitive damages for fraud. He claims that these remedies are inconsistent and that Andrews should be forced either to rescind the agreement and collect no punitive damages or to affirm the contract and be allowed to seek punitive damages. He further argues that the verdict should have been reduced by significantly more than $1,000,000, because, he argues, his net worth is only $720,000. We disagree with each of Sheffield's contentions and affirm the judgment of the trial court.
Liberty National Life Insurance Co. v. Jackson, 603 So. 2d 1005, 1007 (Ala.1992). The question here is whether the remedies in this case are, in fact, inconsistent, as argued by Sheffield; in other words, we must decide whether Andrews can collect damages for fraud and rescind the real estate conveyance. For the following reasons, we conclude that these remedies are not inconsistent.
In Mid-State Homes, Inc. v. Johnson, 294 Ala. 59, 66, 311 So. 2d 312, 318 (1975), this Court held that "where one rescinds a contract induced by fraud and recovers even nominal damages, then in an appropriate case he may also recover punitive damages." The Court, quoting with approval Ward v. Taggart, 51 Cal. 2d 736, 336 P.2d 534 (1959), stated:
Mid-State Homes, Inc. v. Johnson, 294 Ala. at 66, 311 So. 2d  at 318. Andrews contends that the facts of this case bring it within the holding in Mid-State, supra. In particular, she argues that forcing her to elect between remedies would, in effect, allow Sheffield to perpetrate fraud and "`run no risk of liability to [his victim, Andrews] beyond that of returning what [he had] wrongfully obtained.'" Mid-State Homes, Inc. v. Johnson, 294 Ala. at 66, 311 So. 2d  at 318, quoting Ward v. Taggart, 51 Cal. 2d 736, 336 P.2d 534.
The documents purporting to transfer the property from Andrews to Sheffield were void because of the fraud of Sheffield and Tucker. See Cumberland Capital Corp. *1054 v. Robinette, 57 Ala.App. 697, 331 So. 2d 709 (1976), wherein the court stated:
331 So. 2d  at 713. In finding for Andrews on the fraud count, the jury determined that because of Sheffield and Tucker's fraud, there was no agreement between Andrews and Sheffield for the purchase of her property. Thus, the remedy of voiding the "agreements" is not inconsistent with an award of punitive damages for the fraud perpetrated by Sheffield on Andrews.
Finally, Sheffield contends that the trial court should have remitted the punitive damages award by more than $1,000,000 because, he claims, his estate in not large enough to pay such a significant verdict. Should he be required to do so, he claims, he will be financially destroyed. The trial judge, in his order remitting the verdict by $1,000,000, stated:
C.R. at 549-54. In considering Sheffield's argument that the verdict should have been reduced by substantially more than $1,000,000, we note that Sheffield presented evidence tending to show that his estate was valued at only $720,000. The trial court, however, did not accept the value Sheffield placed on his assets and, in its order, found that Sheffield had, in fact, underestimated those assets by 50%. In addition, the trial court did not believe testimony offered by Sheffield with regard to $500,000 that had been on deposit when the judgment was entered. That testimony was as follows:
R.T. at 900-03. Sheffield testified that $500,000 of his money had been "lost or stolen" while he was on a gambling junket between the day the judgment was entered and the day he filed his affidavit. The trial court did not believe Sheffield's explanation of the whereabouts of the missing funds.
The record contains evidence that Sheffield attempted to hide his assets from the court by transferring assets to family members or by suggesting that the assets had been "lost or stolen"; there is evidence that Sheffield stood to gain much from his fraudulent activities had they not been discovered; and there is evidence that Sheffield paid Tucker $15,000 to obtain title to the property for him, knowing that Ms. Andrews knew nothing of the alleged conveyance of her land. The evidence was sufficient to sustain the punitive damages award as remitted.
AFFIRMED.
HOOPER, C.J., and ALMON, SHORES, HOUSTON, KENNEDY, INGRAM, and BUTTS, JJ., concur.
COOK, Justice.
APPLICATION OVERRULED.
ALMON, SHORES, HOUSTON, KENNEDY, and INGRAM, JJ., concur.
HOOPER, C.J., and MADDOX and BUTTS, JJ., dissent.
MADDOX, Justice (dissenting).
I agree with Justice Butts's comments in his dissent, except that I would remit the punitive damages award to $250,000. I believe the award of $1,000,000 in punitive damages is "grossly excessive" and thus violates the defendant's right to due process. See, BMW of North America, Inc. v. Gore, 517 U.S. ___, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996).
HOOPER, C.J., concurs.
BUTTS, Justice (dissenting).
I would grant Willie Sheffield's application for rehearing to review the issue whether the trial court's remittitur of the punitive damages award against Sheffield from $2,000,000 to $1,000,000 was sufficient to have the award comport with the requirements of due process. The jury found that Sheffield's misconduct *1057 was sufficient to impose the penalty of punitive damages, and I agree that punitive damages are warranted. However, after additional study, I have concluded that a further remittitur of the punitive damages award is required. Although the exact amount of Sheffield's net worth is highly disputed, even if it is as great as the plaintiff claims, $1,220,300, then I must conclude that the $1,000,000 punitive damages award "destroys" rather than "stings." See Green Oil Co. v. Hornsby, 539 So. 2d 218, 222 (Ala.1989). I believe a punitive damages award of $350,000 would accomplish "society's goals of punishment and deterrence," id.; thus, I would further remit the award to that amount.