*The Hon. Charles B. Kornmann, United States District Judge

for the District of South Dakota, sitting by designation.

_____________

No. 95-4078WM

_____________

James D. Forster and Joann *

Forster, *

*

Appellees, *

* On Appeal from the United

v. * States District Court for

* the Western District of

* Missouri.

Patrick W. Boss and Janet L. *

Boss, *

*

Appellants. *

___________

 Submitted: June 14, 1996

 Filed: October 11, 1996

___________

Before RICHARD S. ARNOLD, Chief Judge, WOLLMAN, Circuit Judge, and

KORNMANN, District Judge. *

___________

RICHARD S. ARNOLD, Chief Judge.

This case arises out of the sale of property fronting on the Lake of

the Ozarks in Missouri. The plaintiffs are the buyers of the property,

James D. Forster and Joann Forster. The defendants are the sellers,

Patrick W. Boss and Janet L. Boss. The District Court awarded plaintiffs

both damages, for fraud and breach of contract, and injunctive relief.

Defendants appeal, arguing that plaintiffs are receiving what amounts to

a double recovery: an
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injunction that makes them whole plus damages to compensate them for the

loss of the very rights that the injunction has guaranteed. We agree with

this contention in part, and accordingly affirm in part, reverse in part,

and remand for further proceedings.

When defendants, the Bosses, agreed to sell the property to the

Forsters, they represented that the Forsters could obtain a permit for a

boat dock in front of their newly acquired property. In fact, unknown to

the Forsters, the sellers had a boat-dock permit of their own that made it

impossible for the Forsters to obtain the permit they had been promised.

The defendants do not contest the finding made below that they were guilty

of fraud in this respect. And, in fact, when the plaintiffs applied to

Union Electric Company (which created the lake and has the right to grant

permits) for a permit, their application was denied on the ground that the

sellers, the defendants, already had a conflicting permit. To compensate

the plaintiffs for this fraud, the jury awarded $12,250 in compensatory

damages and $10,000 in punitive damages. 

The other claim for damages on which the plaintiffs prevailed had to

do with a swim dock. When the property was sold, defendants promised that

they would remove their swim dock from in front of the transferred

property. They did not keep this promise. The jury awarded $2,500 in

compensatory damages to the plaintiffs on account of this breach of

contract. 

On appeal, defendants argue first that there was no sufficient

evidence to support the damages verdicts. We disagree. The verdict for

$12,250 on the fraud claim finds ample support in the record. In fact, the

testimony was that the value of the property transferred without the boatdock permit was $43,000 less than it would have been with the permit. The

record would have supported a much greater award than was actually given

by the jury. As to the swim dock, the evidence is less specific, but the

defendants' failure to remove their swim dock, so plaintiffs could install

one
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of their own in front of the transferred property, was one of a list of

items in respect of which evidence tended to show that plaintiffs did not

receive full value from the sale. The total amount of damages ascribed to

the entire list was $40,000. No specific figure was given for the swim

dock, but it was of some substantial value, and we do not believe that the

jury exceeded its brief in returning a verdict for the relatively small

amount of $2,500. Certainly there was a breach of contract with respect

to the swim dock. This much is now conceded. We do not think that the

inability to ascribe a more precise value to this item requires the verdict

to be set aside. 

The major issue on appeal arises because damages were not the only

relief secured by the plaintiffs. They also got a permanent injunction

ordering defendants to remove the offending swim dock. In addition, and

most important, they got their boat-dock permit from Union Electric. Union

was a party defendant in the District Court. It took no active part in the

trial, except to enter into a stipulation agreeing that if the Court should

hold plaintiffs entitled to a permit under their contract with defendants,

Union would grant the permit to plaintiffs and revoke the permit previously

granted to defendants. This in fact occurred, so plaintiffs now have their

permit and defendants have lost theirs. No future permit may be granted

to defendants that would interfere with plaintiffs' rights. 

In this situation, defendants argue that the injunction has made

plaintiffs whole. They have both their swim dock and their boat-dock

permit. Thus, the property transferred to them has exactly the

characteristics defendants agreed it would have: it has a boat-dock permit

attached to it, and it is not encumbered by defendants' swim dock. If

plaintiffs also receive, as damages, money to compensate them for the

difference in the value of the property as promised and the value of the

property as transferred, they have received a double recovery. Plaintiffs

have, in effect,
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received not only damages for fraud and breach of contract, but also

specific performance. They have both the money and the property, and are

in a better position than they would have been in had there been no fraud

or breach of contract in the first place. 

We find this argument compelling. Plaintiffs point out that under

Missouri law the measure of damages for fraud in connection with the sale

of land is the difference between the value of the land on the date of sale

as represented, and the value of the land on the date of sale as actually

conveyed. The sale took place in 1991. At that time, according to the

jury, the land as represented was worth $12,250 more than the land as

conveyed. Nothing that happened thereafter, for example, an injunction

guaranteeing plaintiffs their boat-dock permit, can change those facts.

We understand the argument but find it too simplistic. If the argument

were accepted, the entry of an injunction, or the obtaining of the boatdock permit in some other way, would be wholly irrelevant to the recovery

of damages, even though one or the other of these events occurred on the

day immediately following the sale. This does not make sense. It is true,

of course, that the lapse of time was greater than one day here -- about

three years, in fact. It is entirely possible that plaintiffs sustained

some sort of damages because they had to wait for the complete fulfillment

of the terms of the sale. The case, however, was not tried on that theory,

and there is no evidence in this record on which damages of this interim

kind could be calculated. 

Plaintiffs argue that they sought redress for the violation of two

separate legal rights: their right not to be defrauded and the "littoral

rights" appurtenant to the purchased property. In the abstract, this

proposition makes sense, but it breaks down when we consider it in the

practical context of this case. The very littoral rights that plaintiffs

say are protected by the injunction -- the right to a boat-dock permit and

the right to have defendants' swim dock moved -- are the same rights for

the loss of
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which the award of damages is designed to compensate. We cannot escape the

proposition that the injunction has made plaintiffs whole in the very

respects for which they sought damages. To allow them to keep both the

compensatory damages and the injunction would be a double recovery. 

Defendants cite Harris v. Union Electric Co., 766 S.W.2d 80 (Mo.) (en

banc), cert. denied, 492 U.S. 919 (1989), and the citation is apt. There,

plaintiffs had recovered damages on account of the inadequate description

of certain redemption rights in a prospectus for bonds issued by Union

Electric. They subsequently sought an injunction in a separate action to

prevent Union Electric from redeeming the bonds. The Supreme Court of

Missouri held that such injunctive relief was improper. The defect in the

description of plaintiffs' redemption rights had already been fully

remedied by the recovery of damages. They had no right to the further

relief of an injunction forbidding the redemption of the bonds. Union

Electric had, so to speak, bought the right to redeem the bonds, despite

the prospectus's inadequate description of the redemption rights, by paying

the damages awarded in the earlier action. Plaintiffs seek to distinguish

the case by emphasizing their point that the injunction in this case is

designed to protect their littoral rights, which, they insist, are entirely

separate from their right not to be defrauded. As we have already

explained, we do not agree with this contention in the circumstances of the

present case. The damages award has already, in effect, paid plaintiffs

in full for the deprivation of their littoral rights.

We conclude that the case must be remanded for further proceedings.

On remand, it will be up to plaintiffs to elect which remedy they want --

compensatory damages or the injunction. We think, however, that they

should be allowed to retain the $10,000 award of punitive damages in either

event. Defendants' conduct in this case was abusive, and they do not argue

on appeal that the
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award of punitive damages was not based on sufficient evidence. Punitive

damages are not designed to compensate anybody. They are designed to

punish misconduct and to deter future misconduct. The award of punitive

damages, therefore, is not duplicative of the relief contained in the

injunction. It is also clear that a court of equity may award injunctive

relief and actual and punitive damages as an adjunct to its equity

jurisdiction. Martin v. Swenson, 335 F. Supp. 765 (W.D. Mo. 1971). If it

is necessary under Missouri law for some compensatory damages to be awarded

in order to support any award of punitive damages, the District Court is

instructed to award plaintiffs compensatory damages of one dollar on their

fraud claim, plus the punitive damages of $10,000.

To the extent that it holds defendants liable, the judgment is

affirmed. To the extent that it allows plaintiffs to receive both

compensatory damages and an injunction, the judgment is reversed. The

cause is remanded for further proceedings consistent with this opinion.

KORNMANN, District Judge, concurring.

I concur. Most respectfully, I write separately only to express my

opinion that plaintiffs elected a remedy. They sought and received an

injunction and the fruits of it, the boat dock permit. It would be unjust

for plaintiffs to receive the dock permit, as they already have, keep it,

and also recover damages for the claimed loss of the dock permit. My

concern is that if plaintiffs are simply allowed to "give up" the

injunction, our decision may have little practical benefit for defendants

who will already have lost the permit and will still owe the monetary

damages. It may be that the dock permit cannot be retrieved by defendants,

despite the lifting of the injunction. In the alternative, I would have

the District Court determine if plaintiffs have made the election, the

mandate being that plaintiffs are not to be allowed to receive and retain

the dock
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permit as well as the $12,250.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.