Opinion ID: 1618310
Heading Depth: 1
Heading Rank: 4

Heading: The Punitive-Damages Award

Text: Finally, Line argues that the jury's punitive-damages award was excessive. He asserts that in Exxon Shipping Co. v. Baker, 554 U.S. ___, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008), the United States Supreme Court established a new constitutionally accepted ratio of punitive damages to compensatory damages of 0.65 to 1. We reject Line's argument in light of the Baker Court's explicit limitation of its holding to federal maritime common law. The appropriate standard for considering the excessiveness of the punitive-damages award is set out in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), and BMW of North America v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). At the outset, we note that the trial court held a hearing on the excessiveness of the damages awards pursuant to this Court's holding in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986). In its order pursuant to that hearing, it considered the factors set out in Ala.Code 1975, § 6-11-23, [8] Gore, supra, and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989). In that portion of its order addressing posttrial motions directed to damages, the trial court found that evidence had been presented to show that Line's conduct exhibited reckless disregard of the rights of others. The trial court noted that Line's conduct resulted in the loss of Hartford's surety bond and in substantial losses in interest and earnings for the conservatorship funds. The trial court noted that although Line received approximately $10,000 in legal fees from Dutton, paid out of the conservatorship, he did not receive compensation as a fiduciary and noted that the fact that he did not profit from his conduct supported a reduction of the punitive-damages award. The trial court noted that Line's financial condition was poor and that he had no ability to pay the damages claims. However, the trial court noted that Line had insurance that might cover the damages awards and further noted that Line had testified that the damages awards would not affect his financial position. [9] Thus, the trial court concluded that the factors that Line's conduct was reprehensible and that the punitive-damages award would have no impact on him outweighed the fact that he did not profit from his disregard of his fiduciary duties. In concluding its discussion rejecting Line's motion for a remittitur of the punitive-damages award, the trial court also stated: An award of a punitive damage award has two purposes: to punish the defendant before the court and to deter others similarly situated from such conduct in the future. This Court believes that the verdict of this jury can have an important impact on fiduciaries across this State and will hopefully make them more conscientious in dealing with minors' funds. We note that the actual compensation Ventura received in damages in this case is Hartford's $500,000 bond and the jury award of $200,000 in compensatory damages. Ventura presented evidence indicating that his economic losses were in excess of $900,000, an amount he would have received had the conservatorship funds been prudently managed by simply investing in certificates of deposit. We consider these facts and the facts set out in the trial court's analysis in light of the guideposts set out by the United States Supreme Court for the assessment of punitive damages: In [ BMW of North America, Inc. v.] Gore, [517 U.S. 559 (1996),] the United States Supreme Court set out three `guideposts' for courts to look to when reviewing a punitive-damages award. Those guideposts, as most recently restated in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 1520, 155 L.Ed.2d 585 (2003), are as follows: `(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.' Reprising its criteria for analysis of reprehensibility in Gore, the Campbell Court stated that to determine a defendant's reprehensibility`the most important indicium of the reasonableness of a punitive damages award'a court must consider `whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm resulted from intentional malice, trickery, or deceit, or mere accident.' 538 U.S. at 419, 123 S.Ct. at 1521. Shiv-Ram, Inc. v. McCaleb, 892 So.2d 299, 316 (Ala.2003). The Court in Shiv-Ram also noted: [W]e do not consider that the ratio between the punitive-damages award and the compensatory-damages award of slightly less than three to one is unreasonable. See AutoZone, [Inc. v. Leonard, 812 So.2d 1179, 1187 (Ala.2001)], approving a ratio of punitive damages to compensatory damages of 3.7:1, despite the fact that all of the $75,000 compensatory-damages award in excess of $3,000 necessarily related to mental anguish. 892 So.2d at 317. This case presents an example of a conscious disregard of fiduciary duty that resulted in financial losses to a minor who was certainly financially vulnerable. Those losses, and this controversy, were not a mere accident. [10] Under these circumstances we will not hold the trial court in error for refusing to grant the remittitur. The judgment is due to be affirmed. AFFIRMED. WOODALL, SMITH, PARKER, and SHAW, JJ., concur.