Opinion ID: 1110800
Heading Depth: 3
Heading Rank: 2

Heading: Hammond/Green Oil Factors

Text: Next, we look to the factors enumerated by this Court in Hammond and Green Oil, supra. Those factors are: (1) the reprehensibility of Shiv-Ram's conduct; (2) the relationship of the punitive-damages award to the harm that actually occurred, or is likely to occur, from Shiv-Ram's conduct; (3) Shiv-Ram's profit from its misconduct; (4) Shiv-Ram's financial position; (5) the cost to Linda of the litigation; (6) whether Shiv-Ram has been subject to criminal sanctions for similar conduct; and (7) other civil actions Shiv-Ram has been involved in arising out of similar conduct.
Our assessment of the degree of the reprehensibility of the defendant's conduct is broader in a Hammond/Green Oil review than our assessment in a [ Gore ] review. Employees Benefit Ass'n v. Grissett, 732 So.2d 968, 980 (Ala.1998). In that regard, we consider `[t]he duration of the conduct, the degree of the defendant's awareness of any hazard which his conduct has caused or is likely to cause, and any concealment or cover up of that hazard, and the existence and frequency of similar past conduct.' Green Oil, 539 So.2d at 223 (quoting Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala.1987) (Houston, J., concurring specially)). In a footnote in its principal appellate brief, Shiv-Ram states: Shiv-Ram concedes that the case of Lance, Inc. v. Ramanauskas, 731 So.2d 1204 (Ala.1999), states that post-incident conduct may be considered as to the `duration' component of reprehensibility Id. at 1211. While Shiv-Ram questions whether it should be `punished' for acts occurring subsequent to those complained of by the plaintiff here and further believes Lance, Inc., may be distinguishable because the defendant there did not object to such `after the fact' evidence, id., Shiv-Ram concedes Lance, Inc. may require a broader conception of `duration' than the foregoing analysis suggests and invites the Court to note that there is simply no evidence in the record that anyone was harmed on any bed after McCaleb's alleged injury. Conversely, there is no evidence in the record indicating that anyone was [not] harmed on any bed after McCaleb's alleged injury. As noted, the customary practice in the hotel industry of preparing an incident report and a work order for repairs following an injury to a guest caused by room furnishings was not followed in Linda's case, and nothing suggests that a record would have been made of an injury to any other guest. Ray Patel testified that the rail projections on the metal bed frames still existed two and one-half years after Linda was injured. Neither side inquired of Ray as to whether during that period any employee or guest had sustained an injury from striking the projecting sharp ends of the bed frames. As this Court noted in Lance, 731 So.2d at 1218, [the injured party] provided ample evidence that [the defendant] has not taken remedial steps to prevent similar [injuries] from occurring. Ray's testimony was admissible at the postjudgment hearing on the alleged excessiveness of the punitive damages because it was offered to show that Shiv-Ram never intended to improve the safety of the beds in the rooms it rented to the public and that, therefore, its conduct was wanton. Macon County Comm'n v. Sanders, 555 So.2d 1054, 1057-58 (Ala.1990). Shiv-Ram does not challenge on appeal the propriety of the trial court's consideration of Ray Patel's testimony in making its independent assessment of the propriety of the amount of the punitive-damages award. Moreover, it was arguably admissible at the postjudgment hearing under the express language of § 6-11-23, Ala.Code 1975, permitting [a]ny relevant evidence, including but not limited to ... the nature and the extent of any effort the defendant made to remedy the wrong.... Because a review of the reprehensibility factor is more narrow under Gore and because we have concluded that Shiv-Ram's conduct was reprehensible under Gore, we need not readdress reprehensibility in our Hammond/Green Oil analysis. Therefore, this factor weighs against a remittitur of the $500,000 punitive-damages award.
`Punitive damages should bear a reasonable relationship to the harm that is likely to occur from the defendant's conduct as well as to the harm that actually occurred. If the actual or likely harm is slight, the damages should be relatively small. If grievous, the damages should be much greater.'  Green Oil, 539 So.2d at 223, quoting Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala.1987) (Houston, J., concurring specially). Sockwell, 829 So.2d at 138. In this case, as a result of Shiv-Ram's failure to properly inspect or to inquire about the motel premises at any time before or after the closing date, the injury suffered by Linda was significant and ongoing. Also, under Shiv-Ram's ownership, injuries to other patrons and employees were likely to occur; it took only one day of its ownership for Linda to be injured. This factor weighs against a finding that the punitive-damages award is excessive.
Shiv-Ram argues that it made no profit from its misconduct, and that, even if it did, the profit was offset by the compensatory damages that were awarded. It is apparent that Shiv-Ram did save money by not replacing the bed frames or otherwise correcting the dangerous condition. However, as Linda conceded in her brief to this Court, because the minimal savings Shiv-Ram enjoyed by failing to replace the frame did not have a significant impact on its profitability, this factor weighs in favor of a finding that the punitive-damages award is excessive. Grissett, 732 So.2d at 981.
Shiv-Ram concedes that it has liability insurance and it proffers no evidence that payment of the damages awarded will cause it any undue financial hardship. Therefore, this factor weighs against a finding of excessiveness. Lance, 731 So.2d at 1220.
Our analysis of this factor requires us to determine whether the punitive-damages award is adequate to reward Linda's counsel for assuming the risk of bringing the action and to encourage other potential plaintiffs to bring wrongdoers to trial. Green Oil, 539 So.2d at 223. Linda has conceded in her brief to this Court that this factor may be ignored in our review of the punitive-damages award. (Linda's brief at 62.) Thus, this factor is neutral as to whether there should be a remittitur of the punitive-damages award. Lance, 731 So.2d at 1220.
There is no evidence indicating that Shiv-Ram has been subject to any criminal sanctions for similar conduct; therefore, this factor does not require a remittitur. Lance, 731 So.2d at 1219.
There is no evidence indicating that Shiv-Ram has been subject to any other civil actions based on similar conduct; therefore, this factor does not require a remittitur. Lance, 731 So.2d at 1219.
After considering the Hammond/Green Oil factors, we conclude that only one of the factors (i.e., the fact that Shiv-Ram has not profited from its misconduct) weighs in favor of a finding of excessiveness. The other six factors are either inapplicable or weigh against a finding of excessiveness.