Opinion ID: 2520201
Heading Depth: 3
Heading Rank: 2

Heading: The Nature of Price's Misconduct

Text: ¶ 35 This factor requires us to analyze Price's misconduct in terms of maliciousness, reprehensibility, and wrongfulness. Campbell I, 2001 UT 89 at ¶ 27, 65 P.3d 1134. It parallels the reprehensibility factor described by the United States Supreme Court in Gore [14] and recognizes that certain wrongdoings are more egregious and blameworthy than others so as to justify larger awards. See Campbell I, 2001 UT 89 at ¶ 27, 65 P.3d 1134; Gore, 517 U.S. at 575-76, 116 S.Ct. 1589. Deliberate false statements, acts of affirmative misconduct, [and] concealment of evidence of improper motive support more substantial awards, Gore, 517 U.S. at 579, 116 S.Ct. 1589, as do acts involving trickery and deceit. Id. at 576, 116 S.Ct. 1589; Campbell I, 2001 UT 89 at ¶ 32, 65 P.3d 1134. The United States Supreme Court has also stated that economic injury, especially when done intentionally through affirmative acts of misconduct, or when the target is financially vulnerable, can warrant a substantial penalty. Gore, 517 U.S. at 576, 116 S.Ct. 1589. [15] ¶ 36 In this case, the jury found Price liable for breach of its fiduciary duty to the Smiths, breach of partnership agreements, and conversion of partnership assets. Along with the verdict, the trial court entered special findings stating that the jury could have found by clear and convincing evidence a pattern of deceit, failure to disclose and misrepresentation. In particular, the court detailed Price's prolonged, deliberate failure to inform the Smiths of the execution of the contribution agreements and the resulting unavailability of the three options that Price originally gave the Smiths regarding how their interests could be handled in the REIT transaction. The court also detailed Price's conflicting and intentionally misleading calculations of the value of the Smiths' interests in the mall property in the REIT. The calculations given to the Smiths differed significantly from the company's own calculations, which the company did not reveal until six years of litigation had ensued. Additionally, the court detailed Price's acts of financial misconduct, including payment of excessive fees to itself as general partner, commingling funds from different Price-owned properties, and accruing interest to itself on its own capital contributions while denying the Smiths interest on their contributions. ¶ 37 We agree with the trial court that Price's actions amount to affirmative misconduct showing deliberate misrepresentation and disregard of the rights of the Smiths. Price's actions accordingly support a substantial award of punitive damages.