Opinion ID: 1374687
Heading Depth: 1
Heading Rank: 9

Heading: the award of punitive damages was proper

Text: Sierra Pacific argues that the trial court abused its discretion in submitting the question of punitive damages to the jury. It further argues that even if an award were proper, the trial court abused its discretion in failing to find that the $750,000 amount was excessive. We disagree with Sierra Pacific's first argument and remand to the district court with respect to the second argument.
Punitive damages are not favored in the law and therefore should be awarded only in the most unusual and compelling circumstances. Cheney v. Palos Verdes Investment Corp., 104 Idaho 897, 904-05, 665 P.2d 661, 668-69 (1983). The policy behind such damages is deterrence rather than punishment. Id. at 905, 665 P.2d at 669. An award of punitive damages will be sustained on appeal only when it is shown that the defendant acted in a manner that was `an extreme deviation from reasonable standards of conduct, and that the act was performed by the defendant with an understanding of or disregard for its likely consequences.' Id. (Citation omitted.) The justification for punitive damages must be that the defendant acted with an extremely harmful state of mind, whether that state be termed `malice, oppression, fraud, or gross negligence.' Id., quoting Morrison v. Quality Produce, Inc., 92 Idaho 448, 450, 444 P.2d 409, 411 (1968). The decision of whether to submit the question of punitive damages to the trier of fact rests within the discretion of the trial court. Cheney, supra, 104 Idaho at 904, 665 P.2d at 669 ([A]n award for exemplary damages should be left first to the determination of the trier of fact.... Such deference to the trial court is consistent with the appellate overview of compensatory damages.); Duty v. First State Bank of Oregon, 71 Or.App. 611, 693 P.2d 1308, 1315 (1985), review denied, 298 Or. 822, 698 P.2d 963 (1985); State v. Haley, 687 P.2d 305, 320 (Alaska 1984); Schmidt v. American Leasco, 139 Ariz. 509, 679 P.2d 532, 535 (Ct.App.1983); Branch v. Western Petroleum, Inc., 657 P.2d 267, 278 (Utah 1982); Newman v. Basin Motor Co., 98 N.M. 39, 644 P.2d 553, 558 (Ct.App. 1982); Mince v. Butters, 200 Colo. 501, 616 P.2d 127, 129 (1980); Kelly Broadcasting Co., Inc. v. Sovereign Broadcast, Inc., 96 Nev. 188, 606 P.2d 1089, 1093 (1980). The issue of an alleged excessive award of punitive damages also is largely within the discretion of the trial judge. Cheney, supra, 104 Idaho at 905, 665 P.2d at 669. Because punitive damages by their nature are incapable of definite ascertainment and cannot be governed or measured by any precise standards, id., at 904, 665 P.2d at 660, quoting Cox v. Stolworthy, 94 Idaho 683, 688, 496 P.2d 682, 687 (1972), the true basis for an award of one amount of punitive damages as opposed to another amount lies in an overall appraisal of the circumstances of the case. Boise Dodge, Inc. v. Clark, 92 Idaho 902, 908, 453 P.2d 551, 557 (1969). Applying these rules to this case, we affirm the district court's decision to submit the issue to the jury.
The facts of this case compellingly justified both the trial court submitting the question of punitive damages to the jury and the jury awarding punitive damages. The facts included the following: (1) Sierra Pacific employees used a bolt which, according to maintenance manuals, was both the wrong size and strength to connect the pilot's controls with the plane's elevator devices. (2) The employees installed the bolt backwards. (3) The employees never secured the bolt with a nut and cotter pin. Instead, the bolt was allowed to hold the pilot's controls and the elevator devices together by mere tension. (4) Inexplicably, maintenance forms surrounding the reassembly of the pilot's control rods to the elevator devices came up missing. Identical forms covering identical maintenance performed on two other similar planes at the same time as the plane in this case nevertheless were found. No explanation for the mysterious disappearance of the crucial forms was ever offered, which disappearance violated Federal Aviation Administration rules. (5) Numerous other maintenance record and quality control irregularities pervaded Sierra Pacific's operations. (6) Sierra Pacific employees signed maintenance forms stating that they had checked and rechecked the bolt in question approximately one year after its installation and found no problems. Evidence at trial conclusively showed that had the employees properly inspected the bolt, they would have discovered that it was not secured by either a nut or a cotter pin, and that it was too small to use in the first place. Thus, the jury could have found that these employees either lied about this required inspection or did in fact inspect the bolt, callously and shockingly permitted the unfastened bolt to continue to hold the devices together. In either event, their behavior on this point is inexcusable. (7) Sierra Pacific leased the plane in issue to Transwestern Airlines for use as a commercial airplane; Sierra Pacific knew that scores of people would use the plane as a mode of travel. The above evidence conclusively showed that Sierra Pacific acted in a manner that the jury could have found was an extreme deviation from reasonable standards of conduct. Cheney, supra, 104 Idaho at 905, 665 P.2d at 669. Innocent lives were placed in extreme jeopardy as the result of grossly negligent conduct committed over a long period of time. See Cheney, supra, at 905, 665 P.2d at 669. The evidence demonstrated that federal maintenance standards were violated, maintenance manual instructions were ignored, and either outright fraud was committed or a callous indifference to the safety of passengers was exhibited. Accordingly, the trial court was correct in committing to the wisdom and experience of the jury the decision of whether to award punitive damages. The trial court instructed the jury on punitive damages in a manner consistent with the law we have set forth above. We find no error or abuse of discretion in the giving of the instructions or in the jury's consideration of the issue. Hence, we hold that the evidence in this case justified a jury's award of punitive damages. We decline to review whether the district court abused its discretion in holding that the $750,000 punitive damage award was not excessive. Because Sierra Pacific's motion for a new trial based on excessive damages also included an argument that the punitive damage award was excessive, and because the district court has yet to articulate its reasoning for denying Sierra Pacific's motion on this issue, pursuant to Part II of our opinion above, we likewise remand to the district court to state the grounds of upon which it decides this issue. In so doing, the court will apply the Dineen standard quoted above, see ante, p. 721, and ascertain whether the punitive damage award appears to have been given under the influence of passion or prejudice. Dineen, supra, 100 Idaho at 625, 603 P.2d at 580. In applying Dineen to an allegation of an excessive award of punitive damages, it is important to note, as quoted above, that punitive damages are by their very nature incapable of definite ascertainment and cannot be governed or measured by any precise standards. Cheney, supra, 104 Idaho at 904, 665 P.2d at 660, quoting Cox, supra, 94 Idaho at 688, 496 P.2d at 687. An overall appraisal of the circumstances of the case, Boise Dodge, supra, 92 Idaho at 908, 453 P.2d at 557, is necessary to determine if the award will adequately serve as a deterrent to similar future conduct. Cheney, supra, 104 Idaho at 905, 665 P.2d at 661. In summary, we affirm the district court's decision to submit the issue of punitive damages to the jury, and in the propriety of an award in this case. We remand to the district court to determine whether the amount of punitive damages is excessive. As in Part II of our opinion above, we also direct the district court to state the grounds upon which it bases its conclusion.