Opinion ID: 1774332
Heading Depth: 1
Heading Rank: 2

Heading: Corporate Direct Liability for Punitive Damages

Text: In Bankers Multiple Line Insurance Co. v. Farish, 464 So.2d 530, 533 (Fla. 1985), we discussed the second basis for corporate punitive damages liability, direct corporate liability, and expressly distinguished the vicarious liability theory set forth in Mercury Motors. In Bankers, the president of an insurance company, together with another managing officer of the insurer, encouraged a client of Farish to discharge Farish as the client's attorney and seek other counsel. The attorney sued the insurance company as well as the president of the insurer in his individual capacity. The jury returned a verdict in favor of the attorney against the insurer, including both compensatory and punitive damages, but found in favor of the president of the insurer and refused to award damages for his personal actions. This Court approved the award of punitive damages against the insurer because of the evidence of culpability on the part of the other corporate managing officer of the insurer apart from the actions of the president. Although we never used the specific terminology, it is apparent that the insurer was liable for punitive damages based on its own direct liability through the actions of its other managing officer and not on the basis of vicarious liability. Shortly after our decision in Bankers, we again had an occasion to discuss the direct corporate liability theory for punitive damages in Winn-Dixie Stores, Inc. v. Robinson, 472 So.2d 722 (Fla. 1985). In Winn-Dixie, the plaintiff sued for false imprisonment, malicious prosecution, and conversion when he was falsely detained and accused of shoplifting. The facts established that the plaintiff's detention and arrest were expressly approved by an assistant manager of that store. The trial court granted Winn-Dixie's motion for directed verdict on the issue of punitive damages on the basis that the store could not be held vicariously liable under the rule in Mercury Motors. The district court reversed that ruling, finding liability for punitive damages and concluding that the rule in Mercury Motors was not an issue in the case. We affirmed that portion of the district court's decision and stated: Most recently in Bankers Multiple Line Insurance Co. v. Farish, 464 So.2d 530 (Fla. 1985), we expressly held that Mercury Motors was not intended to apply to situations where the agent primarily causing the imposition of punitive damages was the managing agent or primary owner of the corporation. We also hold that Mercury Motors is not applicable in the present case where the suit was tried on the theory of the direct liability of Winn-Dixie, and the jury, by special verdict, decided that Winn-Dixie should be held directly liable for punitive damages. Id. at 724 (emphasis added). It is this statement that led to the certification of the district court's question in this case. According to Schropp, the first sentence in this quote acknowledges the managing agent theory of corporate liability for punitive damages and distinguishes the theory from the vicarious liability rule found in Mercury Motors. Schropp then asserts that, because the next sentence begins with the words we also hold, a new theory of direct corporate liability distinct from the managing agent and vicarious liability theories was established by that decision. Under this new theory, Schropp asserts that there is no requirement that the jury find punitive behavior on the part of a managing agent. In both Bankers and Winn-Dixie, a managing agent of the defendant corporation had acted in a manner that subjected the corporation to liability for punitive damages. In Bankers, we held that liability for punitive damages rested on the actions of an officer of the defendant corporation. In Winn-Dixie, we omitted a detailed recitation of the facts of the case in part because the facts had been set out fully in the opinion of the district court. The district court's opinion in Winn-Dixie noted that an assistant store manager expressly approved the torts committed against the plaintiff. See Robinson v. Winn-Dixie Stores, Inc., 447 So.2d 1003, 1004 (Fla. 4th DCA 1984). The acts of the store manager provided the jury with sufficient evidence of misconduct sufficient for direct liability under the Bankers managing-agent rule. We reject Schropp's contention that there is a third theory of general punitive damages liability for a corporate employer. A corporation can act only through its agents. See Sunrise Olds-Toyota, Inc. v. Monroe, 476 So.2d 240, 240-41 (Fla. 5th DCA 1985) (Any intentional conduct attributed to a corporation must be committed by an officer, agent, or employee of the corporation.), disapproved on other grounds, Martin-Johnson, Inc. v. Savage, 509 So.2d 1097 (Fla. 1987). If that person is a managing agent or holds a policy-making position, liability for punitive damages is available pursuant to the principles set forth in Bankers; [2] if that person is an employee, liability for punitive damages may be predicated on proof of facts that satisfy the independent negligence rule in Mercury Motors. We decline to extend corporate liability for punitive damages beyond the theories announced in these two circumstances. Schropp also asserts that, in the event this Court declines to find a distinct direct corporate theory of liability for punitive damages, sufficient evidence was presented to the jury from which it could have found Crown liable under the managing agent theory. Schropp suggests that he presented evidence that Crown's managing agents, including the service manager, provided the requisite willful and wanton misconduct from which Cohen was exonerated, and that corporate liability for the punitive damages award could be predicated on the acts of these agents. We note that the district court in this case characterized Cohen as the only person who could possibly be responsible as a managing agent for the claims in Count VI. Crown, 636 So.2d at 35. The district court correctly states that Cohen is the only managing agent alleged anywhere in the entire complaint to have committed any post-sale fraud against Schropp. Since the jury exonerated Cohen from Schropp's allegation of willful and wanton misconduct, we agree with the district court that the jury was left with no legal basis on which to impose punitive damages against Crown based on a managing agent theory. For the reasons expressed, we answer the certified question in the negative and approve the decision of the district court in the instant case. It is so ordered. GRIMES, C.J., and SHAW, KOGAN, HARDING and ANSTEAD, JJ., concur. WELLS, J., concurs specially with an opinion, in which SHAW, KOGAN and ANSTEAD, JJ., concur.