Opinion ID: 1673857
Heading Depth: 1
Heading Rank: 4

Heading: WAS IT CONTRARY TO LAW FOR THE TRIAL COURT TO SUBMIT THE ISSUE OF PUNITIVE DAMAGES TO THE JURY WHEN THE PROOF SHOWED C & C's WORTH TO BE ZERO?

Text: C & C contends on appeal that the trial court erred in submitting the issue of punitive damages to the jury when the uncontradicted proof showed C & C's net worth to be zero. Smith asserts on cross-appeal that the trial court erred in granting Lambert a JNOV nullifying the award of punitive damages because the jury was not informed of his net worth. While the record is not clear pertaining to C & C's net worth it does disclose that after Lambert testified, the parties stipulated into the record that if Bill Lambert were to take the witness stand his testimony would be that his personal net worth is zero. The record shows that Lambert terminated his employment with C & C in 1986 and at the time of trial was employed by Attorney Comer as a paralegal with earnings of $120.00 per week. C & C discontinued their hauling operation in 1986 subsequent to the filing of the tort action. The corporation was dissolved in 1987. Phillip Cole, major stockholder of C & C, obtained the corporate ICC authority as well as the three trailers of the entity and began operating a trucking company in his own name. C & C and Lambert argue that Smith's failure to prove some net worth on their part precludes an award of punitive damages. They rely on Whittington v. Whittington, 535 So.2d 573 (Miss. 1988); T.C.L., Inc. v. Lacoste, 431 So.2d 918 (Miss. 1983); Gaylord's of Meridian, Inc. v. Sicard, 384 So.2d 1042 (Miss. 1980); First National Bank of Iuka v. Mitchell, 359 So.2d 1376 (Miss. 1978); and Snowden v. Osborne, 269 So.2d 858 (Miss. 1972). An examination of these cases indicates at first blush that we have applied this standard at least since Snowden. We again consider the rationale undergirding approval of awards of punitive damages. In Redden, Punitive Damages, § 5.2(A)(24), p. 356 (1980), we are told that in Mississippi: Punitive damages are assessed by way of punishment against a defendant for unlawful, malicious, wanton and reckless acts, and they are allowed by reason of undertaking to prevent its recurring in the future. .. . Exemplary or punitive damages are those, of course, which are in addition to the actual or compensatory settlement. They are granted in the nature of punishment for the wrongdoing of the defendant and as an example so that others may be deterred from the commission of similar offense thereby in theory protecting the public... . Punitive damages may also be awarded if the damage was done by gross negligence that is equivalent to wilful and wanton mischief. Neal v. Newburger Co., 154 Miss. 691, 123 So. 861 (1929)... . These precepts have been followed in Wirtz v. Switzer, 586 So.2d 775, 783 (Miss. 1991), T.C.L. v. Lacoste, 431 So.2d at 923 and Standard Life Ins. Co. of Indiana v. Veal, 354 So.2d 239 (Miss. 1977). Punitive damages are properly allowed where the tort complained of was malicious, wanton, wilful, or capricious. Royal Oil Co., Inc., 500 So.2d at 450; Yazoo & M.V.R. Co. v. Williams, 87 Miss. 344, 355, 39 So. 489, 491 (1905); see also Newsom v. Henry, 443 So.2d 817, 824 (Miss. 1983); T.G. Blackwell Chevrolet Co. v. Eshee, 261 So.2d 481, 485 (Miss. 1972); Friendly Finance Co. of Biloxi, Inc. v. Mallett, 243 So.2d 403, 406 (Miss. 1971). Further, a finding of malice will give rise to an assessment of punitive damages. Aetna Casualty & Surety Co. v. Day, 487 So.2d 830 (Miss. 1986); Weems v. American Security Insurance Co., 486 So.2d 1222, 1226 (Miss. 1986). In determining the propriety of submitting the issue of punitive damages to the jury, the trial court decides whether, under the totality of the circumstances and viewing the defendant's conduct in the aggregate, a reasonable, hypothetical trier of fact could find either malice or gross neglect/reckless disregard. Colonial Mortgage Co., Inc. v. Lee, 525 So.2d 804, 808 (Miss. 1988). According to 22 Am.Jur.2d 986 § 953 (1988), the following rules apply where punitive damages are recoverable: As a general rule, evidence of the wealth or financial condition of the defendant is admissible upon the issue of the amount of punitive damages that may be awarded against him, generally on the theory that the allowance of a given sum would be a greater punishment to a man of small means than to one possessing larger wealth, although there are a few contrary holdings. Thus, it has been recognized that a defendant may introduce evidence of his impecunity on the question of exemplary or punitive damages.... As a predicate on a claim for punitive damages, plaintiff is not required to introduce evidence of defendant's financial worth and ability to pay an award for punitive damages. But where evidence of financial worth is admissible for consideration by the jury on the plaintiff's behalf to increase the damages, evidence as to defendant's lack of financial resources is similarly admissible on defendant's behalf to diminish the damages... . There is authority to the effect that evidence of financial worth is not admissible until the trier of fact determines the defendant's liability for punitive damages, or at least until there has been prima facie proof of plaintiff's right to recover punitive damages. [Emphasis Added]. The rules articulated in Am.Jur.2d do not require proof of net worth prerequisite to an award of punitive damages. Snowden v. Osborne is the first case of recent vintage suggesting the effect of failure to prove a defendant's worth when the amount of an award for punitive damages is challenged. In Snowden, we stated: [W]e are nevertheless constrained to the opinion that there was insufficient evidence adduced to affirm a punitive award in the sum of $30,000. The record is silent as to the worth of the defendant although it does reveal that he had prior to this suit disposed of his real property without mentioning the consideration received. Snowden, 269 So.2d at 861. In First American Nat. Bank of Iuka, we used Snowden as a reference point, reversed because punitive damages were grossly excessive and stated: Absent some proper showing of the net worth or financial condition of FANB, we have no way to measure the correctness of the punitive damage award. First American, 359 So.2d at 1381. In Gaylord's of Meridian, we again reversed an award of punitive damages and embellished on our prior pronouncements by enunciating: There was no evidence relating to the financial worth of Gaylord's and there was no guide whereby the jury could determine punitive damages. In First American National Bank of Iuka v. Mitchell, 359 So.2d 1376 (Miss. 1978), the Court held that without a showing of the net worth or financial condition of the defendant, there was no way to measure the punitive damage award. Gaylord's, 384 So.2d at 1045. Finally in Whittington v. Whittington, we reversed an appeal awarding $40,000 punitive damages on a defendant's cross-claim and stated: The defendant's proof failed to adequately establish her net worth-assets minus liabilities-so as to serve as a measure for the Court to consider in arriving at a sum to award as punishment in this case. Whittington, 535 So.2d at 584. T.C.L., Inc., Employers Mutual Casualty Co. v. Tompkins, 490 So.2d 897 (Miss. 1986), Bankers Life & Casualty Co., First American National Bank of Iuka, and Snowden were cited as authorities for the pronouncement. For whatever reason, we have failed to follow traditional rules from Snowden to Whittington. Literal adherence to a requirement of proof of net worth prerequisite to an award of punitive damages results in a defendant with zero net worth being ipso facto excluded and absolved from payment of such damages. We fail to see the reason underlying such a rule. Moreover, in Collins v. Black, 380 So.2d 241 (Miss. 1980), we stated, The pecuniary ability to respond to a verdict for punitive damages may be considered by a jury, but it is not the sole factor to be considered by them. [3] In Aaron v. Rinaldi, 296 So.2d 632 (Fla. App. 1974), the following issue was certified to the District Court of Appeals, Third District: