Opinion ID: 2640748
Heading Depth: 2
Heading Rank: 7

Heading: The AOAO's Claims for Punitive Damages

Text: Finally, the AOAO contends that the circuit court erred in granting summary judgment in favor of Royal, Lee, and Liu on its claims for punitive damages. The AOAO argues that, [a]lthough there are more, two points alone should have permitted the issue of punitive damages to reach the jury: (1) [t]he defendants knew the defective nature of their work would be hidden beneath or within hardened concrete and would be difficult and costly to discover; and (2) [t]he work was so defective and pervasive that, when considered together with the fact that the defects would necessarily be hidden, a fair inference arises that the defendants performed the work with an entire want of care and/or a conscious indifference to consequences that was motivated by a desire to cut costs and boost profits. Specifically, with respect to Royal and Lee, the AOAO asserts that: Royal admittedly knew of the serious soil compaction deficiency at Building 3, yet made no effort to: (1) determine if the same defective condition existed under any of the other buildings; or (2) inform the City Building Department or prospective purchasers of this serious and potentially costly defect. As the subcontractor responsible for the defective soil compaction, Lee could reasonably be inferred to have had the same information as Royal regarding the deficient compaction at Building 3. The AOAO claims that, with respect to Liu, [t]he concrete floor deficiencies were not isolated to one or two floor slabs but found throughout the project, which consisted of multiple townhouse structures. This pervasiveness permits a reasonable inference that the deficient methods used by Liu to install the floors was a systematic practice motivated by a desire to cut costs and boost profits. Specifically, the AOAO argues that [t]he slabs did not conform to project specifications and the Building Code [because, i]n many areas[,] the slabs were significantly thinner than the required minimum of [four] inches[] and . . . metal reinforcement was so misplaced so as to render them ineffective. Royal contends that, even assuming arguendo that the compaction work was done improperly . . . and that the Compaction Report was incorrect, these facts do not establish by clear and convincing evidence that Royal acted wantonly, oppressively, or with malice to warrant an award of punitive damages. Lee similarly contends that the AOAO has not and cannot establish that [Lee] acted wantonly, oppressively, with a spirit of mischief or criminal indifference, or acted with an entire want of care that would raise a presumption to conscious indifference to the consequences. Liu maintains that the record remains devoid of any support, much less clear and convincing evidence, for [the AOAO's] punitive damage claim against Liu. Punitive damages are generally defined as those damages assessed in addition to compensatory damages for the purpose of punishing the defendant for aggravated or outrageous misconduct and to deter the defendant and others from similar conduct in the future. Masaki v. Gen. Motors Corp., 71 Haw. 1, 6, 780 P.2d 566, 570 (1989) (citations omitted). In order to recover punitive damages, [t]he plaintiff must prove by clear and convincing evidence that the defendant has acted wantonly or oppressively or with such malice as implies a spirit of mischief or criminal indifference to civil obligations, or where there has been some wilful misconduct or that entire want of care which would raise the presumption of a conscious indifference to consequences. Id. at 16-17, 780 P.2d at 575 (citation omitted). In determining whether an award of punitive damages is appropriate, the inquiry focuses primarily upon the defendant's mental state, and to a lesser degree, the nature of his conduct. In the case of most torts, ill will, evil motive, or consciousness of wrongdoing on the part of the tortfeasor are not necessary to render his conduct actionable. In a negligence action, for example, the defendant may be required to make compensation if it is shown that he failed to comply with the standard of care which would be exercised by an ordinary prudent person, no matter how innocent of desire to harm. In contrast, to justify an award of punitive damages, a positive element of conscious wrongdoing is always required. Thus, punitive damages are not awarded for mere inadvertence, mistake, or errors of judgment. Restatement (Second) of Torts § 908, comment b; [W.P. Keeton,] Prosser [& Keeton on the Law of Torts § 2], at 10 [(5th ed.1984)]. Something more than the mere commission of a tort is always required for punitive damages. Prosser, at 9. Id. at 7, 780 P.2d at 570-71 (some citations omitted) (emphases added). Here, even assuming arguendo that Royal and Lee inadequately compacted the soil at Newtown Meadows, thereby resulting in damages to the AOAO, such actions would amount to a mere commission of a tort, not justifying an award of punitive damages. Masaki, 71 Haw. at 7, 780 P.2d at 571 (citation omitted). Furthermore, even assuming arguendo that Royal and Lee were or should have been aware of the serious soil compaction deficiency at Building 3, the AOAO does not cite to any authority in support of its position that Royal and Lee were obligated to determine if the same defective condition existed under any of the other buildings or to inform the City Building Department or prospective purchasers of th[e] serious and potentially costly defect. Likewise, with respect to Liu, even assuming arguendo that Liu improperly constructed the floor slabs at Newtown Meadows, such action would amount to mere inadvertence, mistake, or errors of judgment[,] id., under the circumstances of this case. Inasmuch as the AOAO has not shown a positive element of conscious wrongdoing in order to justify an award of punitive damages, id., against Royal, Lee, and Liu, we hold that the circuit court did not err in granting summary judgment in favor of Royal, Lee, and Liu on the AOAO's claims for punitive damages. [47]