Opinion ID: 1138293
Heading Depth: 1
Heading Rank: 13

Heading: Issue 12: The punitive damages award and the trial court's Hammond order.

Text: As noted previously, the jury returned a general verdict awarding damages of $6,230,000. The trial court denied Independent Life's request for a separate verdict form for punitive damages. Thus, the jury's general verdict did not state what portion of the award represented compensatory damages and what portion represented punitive damages. [1] The plaintiff's counsel did not ask the jury for a specific amount of compensatory damages for Casey's economic loss and mental anguish, but did request a punitive damages award of $17 million. Even given Casey's economic loss of approximately $1,200 in premiums she paid after her 65th birthday, plus interest, and additional compensatory damages for her mental anguish relating to the belief that her Independent Life policy had terminated, the jury's award may represent $6 million or more in punitive damages. [2] Independent Life first argues that the punitive damages award is excessive as a matter of law, because, it contends, the verdict represents a punitive/compensatory ratio of 4996:1, considering Casey's $1,200 economic loss. Thus, Independent Life argues that the punitive damages award does not bear a reasonable relationship to the compensatory damages award. However, we note that the actual ratio of punitive to compensatory damages awarded by the jury is very likely less than 4996:1 because the jury may have awarded compensatory damages for Casey's mental anguish. Moreover, this Court has consistently rejected the argument that an award of punitive damages is excessive if it does not fall within a certain arbitrary ratio in regard to the compensatory damages award. Southern Life & Health Ins. Co. v. Turner, 586 So.2d 854 (Ala.1991); Nationwide Mut. Ins. Co. v. Clay, 525 So.2d 1339 (Ala.1987), cert. denied 488 U.S. 1040, 109 S.Ct. 863, 102 L.Ed.2d 988 (1989). See also, TXO Production Corp. v. Alliance Resources Corp., 509 U.S. ___, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993). Independent Life argues that the trial court's review of the jury verdict, required by Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), failed to properly analyze the factors set forth in Hammond and in Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989), and, thus, did not subject the punitive damages award to a meaningful review, as the United States Supreme Court has held is mandated by constitutional due process provisions. Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991). However, a jury's verdict bears a presumption of correctness, [3] and a motion for a new trial based on alleged excessiveness of the punitive damages award will be granted only if the court determines that the award is the result of passion, bias, corruption or other improper motive. Hammond supra, at 1378. We stated in Hammond that in reviewing a jury verdict to determine whether it is unconstitutionally excessive, the trial judge should consider the following factors: (1) [t]he culpability of the defendant's conduct; (2) the desirability of discouraging others from similar conduct; and (3) the impact [of the verdict] upon the parties. Id. at 1379. Thereafter, in Green Oil, we listed seven factors that a trial court could consider when reviewing whether a punitive damages award was excessive or inadequate. The Green Oil factors encompass and expand on the Hammond factors, and include: (1) the relationship of the punitive damages award to the harm that has actually occurred and is likely to occur because of the defendant's misconduct (it must be a reasonable relationship); (2) the reprehensibility of the defendant's conduct; (3) the profit gained by the defendant because of its misconduct; (4) the defendant's financial position; (5) the costs of litigation; (6) criminal sanctions ... imposed on the defendant [because of the same] conduct; and (7) other civil actions against the same defendant, based on the same conduct. Green Oil, 539 So.2d at 223-24. In addition, Ala.Code 1975, § 6-11-23(b), mandates that the trial court consider additional factors when reviewing a punitive damages award: (1) the economic impact of the verdict on the defendant or on the plaintiff; (2) the size of the compensatory damages award; [4] (3) whether the defendant has previously been guilty of the same misconduct; and (4) any effort on the part of the defendant to remedy the wrong complained of and the opportunity to do so. With the exception of the last factor regarding the defendant's remedial efforts, these statutory factors appear to be encompassed within the Green Oil factors. Thus, a trial court's Hammond order discussing a punitive damages award must include a review of all the factors listed in Hammond, Green Oil, and § 6-11-23(b), to the extent that they are not redundant, and should also include any additional factors the court finds meaningful in the particular case. As noted by the United States Supreme Court in Haslip, the trial court's Hammond ruling is subject to this Court's review on appeal, which ensures that punitive damages awards are not grossly out of proportion to the severity of the offense. Haslip, 499 U.S. at 22, 111 S.Ct. at 1045. In addition to the fact that this Court uses the same factors the trial court uses in reviewing a punitive damages award, this Court has stated that the constitutionality of Alabama's punitive damages law rests, in part, on this Court's use of comparative analysis during judicial review of a punitive damages award. BMW of North America v. Gore, 646 So.2d 619, 628 (Ala.1994). See Haslip, supra. Comparison of the verdict in the case being reviewed with verdicts in other similar cases is helpful in maintaining consistency in punitive damages awards. However, as we emphasized in Gore, the use of a comparative analysis is not intended to replace judicial review utilizing the Green Oil factors, but is only one step in the process of judicial review. Finally, we note that all the factors listed above, and any other factors that might be used in judicial review of a punitive damages award, arise from the same central concept that the purpose of punitive damages is to punish the wrongdoer and to deter the wrongdoer and others from committing similar wrongs in the future. Green Oil, 539 So.2d at 222. Accordingly, we undertake a review of the punitive damages award against Independent Life.