Opinion ID: 1819871
Heading Depth: 1
Heading Rank: 6

Heading: phase i findings on entitlement to punitive damages

Text: Although I do agree with the majority's conclusion that the Third District misapplied our decision in Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), in holding that compensatory damages must be determined before a jury can consider entitlement to punitive damages, I cannot agree with the majority's view that the trial court erred in allowing the jury to consider the entitlement of the class to punitive damages during Phase I of the trial based on the majority's conclusion that proof of liability, which includes both reliance and causation, is a missing predicate here to the determination of entitlement to punitive damages. For the reasons that follow, I would allow the jury's determination of punitive conduct and of entitlement to punitive damages to stand for the class to be later applied as the case proceeds. This Court has previously addressed whether a plaintiff can recover punitive damages where the factfinder has found a breach of duty but no compensatory or actual damages have been proven. Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989). In Ault, we clearly recognized that an express finding of a breach of duty should be the critical factor in an award of punitive damages. Id. Further, this Court has held that a finding of liability alone will support an award of punitive damages `even in the absence of financial loss for which compensatory damages would be appropriate.'  Id. (quoting Lassitter v. Int'l Union of Operating Eng'rs, 349 So.2d 622, 626 (Fla.1977)); see also Mortellite v. Am. Tower, L.P., 819 So.2d 928, 935 (Fla. 2d DCA 2002) (concluding that, based on the trial court's finding of breach of duty, the appellant was ultimately entitled to a punitive damage award even if, after remand, it was again determined that he was not entitled to compensatory damages); Horizon Leasing v. Leefmans, 568 So.2d 73, 75 (Fla. 4th DCA 1990) ([A] plaintiff can recover punitive damages where the fact finder has found a breach of duty but no compensatory or actual damages have been proven.). In this matter, Tobacco asserts, and the majority agrees, that the jury in Phase I only determined that Tobacco breached its duty and that a breach of duty does not constitute a finding of liability under Ault. Contrary to this assertion, the Phase I jury in the present case found Tobacco responsible with regard to the common core issues pertaining to liability and general causation. This is supported by the fact that the trial plan only allowed the jury to proceed to the next stage of Phase Ia determination of entitlement to punitive damagesif liability was found. The final judgment awarding compensatory damages to the three class representatives and punitive damages to the entire class was only possible after liability was determined because a judgment for damages could not be entered if there had been no finding of liability. See Oliveira v. Ilion Taxi Aero LTDA, 830 So.2d 241, 242 (Fla. 4th DCA 2002) (recognizing as does Ault, that as a matter of law a judgment for damages cannot be entered where there is no finding of liability); Cont'l Assurance Co. v. Davis, 538 So.2d 542, 544 (Fla. 1st DCA 1989) (concluding that absent the jury's finding of liability on the underlying fraud issue, there can be no valid award of punitive damages, citing Ault ); Cloutier v. Cent. Contracting, Inc., 418 So.2d 1233, 1234 (Fla. 5th DCA 1982) (concluding that a verdict finding damages without finding liability cannot support the damage award). Pursuant to Ault, the jury's finding of liability and responsibility with regard to the common core issues alone in Phase I could support the jury's determination that the class was entitled to punitive damages, notwithstanding that compensatory damages have not yet been awarded to all class members. In fact, a final judgment awarding punitive damages has been affirmed notwithstanding that the judgment awarded no compensatory damages. See Russin v. Richard F. Greminger, P.A., 563 So.2d 1089 (Fla. 4th DCA 1990) (citing Ault ). A finding of liability, not compensatory damages, is the sine qua non of entitlement to a punitive damage award. In support of its argument that compensatory damages are a prerequisite for awarding punitive damages, Tobacco relies, as did the subsequent panel in Engle II, on only a concurring opinion in Ault, in which it was stated: The crucial element in determining whether punitive damages may be awarded absent an award of compensatory damages is proof of the underlying cause of action. Where actual damage is an essential element of the underlying cause of action, an award of compensatory damages must be a prerequisite to an award of punitive damages. This case involved the torts of assault and battery, which do not require proof of actual damage. 853 So.2d at 457 (Ehrlich, C.J., concurring specially). However, a majority of this Court did not agree with that statement and did not join with that concurring opinion and, therefore, it is of no precedential value whatsoever. See Greene v. Massey, 384 So.2d 24, 27 (Fla.1980) (A concurring opinion does not constitute the law of the case nor the basis of the ultimate decision unless concurred in by a majority of the Court. . . . The special concurring opinion has no precedential value and it cannot serve to condition or limit the concurrence in the [majority] opinion. . . .); Lendsay v. Cotton, 123 So.2d 745, 746 (Fla. 3d DCA 1960) (A concurring opinion has no binding effect as precedent; such an opinion represents only the personal view of the concurring judge and does not constitute the law of the case.). Moreover, neither the Ault court nor any other Florida court has ever addressed Ault in the class action context. Due to the uniqueness and purpose of the class action device, which allows a jury to determine liability with regard to common issues first before determining individual damages, in my view, the jury's verdict in Phase I finding Tobacco liable with regard to the common issues is a sufficient predicate to constitute a finding of liability under Ault. This conclusion is supported by the fact that had the jury in Phase I found Tobacco not liable with regard to the common issues of liability and general causation each class member's claim at that point would have been rendered moot, thereby precluding Phase II. In addition, a key factor in considering whether compensatory damages should be awarded prior to a determination of entitlement to punitive damages in a class action is whether the awarding of one is critical to awarding the other. In other words, is the relative timing of the awards the determinative factor? I conclude that the timing of the awards should not be the absolute controlling factor. Compensatory and punitive damages serve distinct purposes. See Arab Termite & Pest Control of Fla., Inc. v. Jenkins, 409 So.2d 1039, 1042-43 (Fla.1982). In Arab Termite we recognized the distinction between compensatory and punitive damages, specifically: [T]he amount of compensation for loss is an entirely separate matter from the amount of punitive damages. Punitive damages apply to wrongdoing not covered by the criminal law, where the private injuries inflicted partake of public wrongs. They are to be measured by the enormity of the offense, entirely aside from the measure of compensation for the injured plaintiff. Jenkins, 409 So.2d at 1042-43. In awarding punitive damages, the focus is on the defendant's conduct, not on the conduct of the plaintiff or the extent of the injury to be compensated. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 474 (5th Cir. 1986). While the purpose of compensatory damages is to restore the injured party to the position it would have been [in] had the wrong not been committed, Laney v. Am. Equity Inv. Life Ins. Co., 243 F.Supp.2d 1347, 1354 (M.D.Fla.2003), the purpose of punitive damages is not to further compensate the plaintiff, but to punish the defendant for its wrongful conduct and to deter similar misconduct by it and other actors in the future. Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d 483, 486 (Fla.1999). Punitive damages are appropriate when a defendant engages in conduct which is fraudulent, malicious, deliberately violent or oppressive, or committed with such gross negligence as to indicate a wanton disregard for the rights of others. W.R. Grace & Co.-Conn. v. Waters, 638 So.2d 502, 503 (Fla.1994). The punitive damage inquiry, unlike that for compensatory damages, focuses primarily on the egregiousness of the defendant's conduct. Watson v. Shell Oil Co., 979 F.2d 1014, 1019 (5th Cir.1992). Moreover, the United States Supreme Court has also recognized the distinct purposes of compensatory and punitive damages: The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct. The latter, which have been described as quasi-criminal, operate as private fines intended to punish the defendant and to deter future wrongdoing. A jury's assessment of the extent of a plaintiff's injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (citations omitted). Punitive damages are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence. Gertz v. Robert Welch, Inc., 418 U.S. 323, 350, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). Punitive damages serve a broader function; they are aimed at deterrence and retribution. State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). Entitlement to punitive damages, therefore, aimed at deterrence and retribution for a public wrong, is distinct and not dependent on the specific injury suffered by the class member. While no plaintiff in the Engle Class may ultimately receive an award of punitive damages without proving that he or she suffered actual damages in Phase III, the determination with regard to entitlement to punitive damages on a class basis need not be made concurrently with an evaluation of a particular claimant. See Sterling v. Velsicol Chemical Corp., 855 F.2d 1188, 1217 (6th Cir.1988) ([T]he district court need not defer its award of punitive damages prior to determining compensatory damages for the entire class of 128 individuals. So long as the court determines the defendant's liability and awards representative class members compensatory damages, the district court may in its discretion award punitive damages to the class as a whole at that time.) Moreover, although the Unites States Supreme Court has recognized that compensatory damages and punitive damages are typically awarded at the same time by the same decisionmaker, it has never held that entitlement to these damages must absolutely be assessed at the same time. Cooper Indus., Inc., 532 U.S. at 432, 121 S.Ct. 1678 (emphasis supplied). Therefore, in my view, the relative timing of the assessment of entitlement to punitive damages and a compensatory damage award is not critical. See Jenkins, 782 F.2d at 474. But see Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417-18 (5th Cir.1998). It is important to highlight the distinction between a jury determination that a class is entitled to punitive damages before compensatory damages have been actually awarded versus an actual jury award of a specific amount to a class as a lump sum punitive damage award before compensatory damages have been determined. In my view, the former comports with the requirements of due process while the latter, as the majority correctly concludes, does not. However, contrary to the conclusion reached by the majority, in my view, the trial court did not abuse its discretion in allowing the jury in Phase I of the trial plan to determine whether the class was entitled to punitive damages after liability regarding the common issues had been determined. Notwithstanding the above, I concur in the majority's holding which disapproves the trial court's trial plan in Phase II-B in which it allowed a lump sum punitive damage award to be determined prior to a determination of individual class members' compensatory damage awards, which will occur in Phase III, based on due process concerns. A simple determination of entitlement to punitive damages on a class basis does not violate Tobacco's due process rights because no class member will be awarded punitive damages until the class member has been awarded compensatory damages in Phase III. See In re New Orleans Train Car Leakage Fire Litigation, 795 So.2d 364, 379 (La.Ct.App.2001) (determining that there was no due process violation where the quantum of punitive damages was determined when the quantum of compensatory damages had been determined as to only 20 of 8,047 plaintiff class members). Ultimately, Tobacco will not be required to pay a class member punitive damages until that class member demonstrates his or her entitlement to compensatory damages in Phase III. Tobacco will have the opportunity to be heard at each Phase III trial with regard to why that individual plaintiff is not entitled to compensatory damages. To date, Tobacco has not been required to pay any class member a punitive damage award. Therefore, because Tobacco in Phase III will be heard with regard to each class member's compensatory damage claim before they are required to pay that class member any punitive damages, I conclude that Phases I and II-A of the trial court's trial plan did not violate Tobacco's due process rights, and that the jury's finding with regard to entitlement to punitive damages should stand. The majority today has inflicted serious harm to class actions which involve egregious behavior and has done so contrary to the clear law of Florida.