Opinion ID: 1740168
Heading Depth: 1
Heading Rank: 15

Heading: Issue of Remittitur of Punitive Damages

Text: The defendants argue that the trial court erred in refusing to order a remittitur of the verdict. The trial judge in his Hammond order reviewed the jury verdict, using not only the three guideposts set out by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), but also applying the factors set forth in Green Oil Co. v. Hornsby, 539 So.2d 218, 223-24 (Ala.1989), and Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986):
1. The reprehensibility of the defendants' conduct. In BMW I, the Court opined the most important indicium of the reasonableness of punitive damage awards is the degree of reprehensibility of the defendant's conduct. See BMW, 517 U.S. at 575, 116 S.Ct. 1589. The [U.S.] Supreme Court did not provide any particular standard to measure reprehensibility; however, it recognized that trickery and deceit are more reprehensible than negligence, and that acts of affirmative misconduct such as making deliberate false statements, are more reprehensible than making an innocent misrepresentation. Life Insurance Company of Georgia v. Parker, [726 So.2d 619 (Ala.1998)]. In this case, the Court finds from the evidence a clear pattern of deceit and deliberate misrepresentation by the defendants, Cooper & Company, Lloyd Botsford, and Jordan Cooper, which induced the plaintiffs to purchase the subject property. The facts proved that Cooper & Company and its agents had ample notice of significant flooding in the Sunchase subdivision well in advance of the transactions at issue. The evolution of the evidence then goes on to establish that, notwithstanding said knowledge, Lloyd Botsford and Jordan Cooper withheld this vital information from their own sales staff, the plaintiffs, and with regard to the Lester and Willis transactions, even made express fraudulent representations. The reprehensibility of the defendants' conduct certainly supports the jury's punitive damage awards. 2. The ratio of punitive damages to the amount of actual or potential harm suffered by the plaintiffs. A second indicium of either reasonableness or excessiveness is the ratio of the punitive damage award to the actual harm inflicted upon the plaintiff. Parker, [726 So.2d 619]. At the hearing on March 8, 1999, the defendants conceded that they did not challenge the ratio of the compensatory to punitive damage awards. Accordingly, this factor weighs against a finding that the punitive damage awards were excessive. 3. Sanctions for comparable conduct. A third indicium of the reasonableness or excessiveness of the jury's verdict is a comparison of the amount of the punitive damage award with any civil or criminal penalties that could be imposed for comparable conduct. BMW I, 517 U.S. at 583, 116 S.Ct. 1589. There are no comparable penal sanctions or civil sanctions. Section 34-27-36(a) and (a)(2) of the Code of Alabama (1975) permit the Real Estate Commission, whose role is to monitor the activities of its brokers in real estate transactions, to revoke a broker's licenses and/or fine the broker for making a material misrepresentation, or failing to disclose to [a] potential purchaser any latent structural defect or any other defect known to the broker, salesperson, or company. An administrative slap on the wrist does nothing to make the plaintiffs whole, nor adequately punishes the wrongdoer. This element supports a finding that the punitive damage awards were not excessive. 4. Summary of BMW I analysis. Analyzing the facts of this case within the conceptual framework of BMW I leads this court to conclude that the amount of punitive damages is not excessive. The defendants, motivated by greed, engaged in a pattern of trickery and deceit, not negligent conduct. The only meaningful remedy available to the plaintiff is punitive damages, and the ratio of punitive to compensatory damages certainly conforms to the mandates of the Alabama Supreme Court.
1. The punitive damage award and the actual or likely harm. The actual harm caused by the defendants' conduct is substantial, and the amount awarded by the jury to punish the wrongdoer and deter future avarice is appropriate. Four families bought homes which either cannot be resold or, if resold, could only bring an amount far less than what they paid. Furthermore, during periods of heavy rain, they live in the midst of raging waters which pose obvious threats to their property and their physical safety. These factors weigh in favor of the size of the punitive damage awards. 2. The reprehensibility of the defendants' conduct. As previously stated, this Court indeed finds the conduct of the defendants to be reprehensible because the evidence irrefutably establishes that their conduct was the product of trickery and deceit. The record is devoid of a single innocent misrepresentation. This factor weighs heavily in favor of the size of the punitive damage awards. 3. The defendants' profit from their misconduct. This Court must determine if the culpable conduct was profitable to the defendants, and ensure that the defendants suffer a loss in excess of their profit. Green Oil, 539 So.2d at 223. The evidence illustrates that the defendants profited in the amount of $15,105.00 from commissions on the sales broken down as follows: Willises $4,250.00; Sergeants$3,628.00; Woodhams $3,835.00; and Lesters $3,395.00. These amounts show that the profit resulting from the defendants' fraud was modest. This factor, therefore, weighs against the imposition of a substantial punitive damage award. 4. The defendants' financial position. The parties have not addressed the issue of the adverse effect this judgment will have on the defendants. The defendants' insurance policy provides for coverage up to the policy limits of $100,000.00 per wrongful act; $300,000.00 aggregate; and a supplemental policy of $1,000,000.00 excess. This factor weighs against a finding that the punitive damage awards were excessive. 5. The costs of litigation. The Court shall consider the collective costs of litigation to encourage plaintiffs to bring wrongdoers to trial and to reward the plaintiff's counsel for assuming the risk of bringing the lawsuit. [ Parker, 726 So.2d at 624 (citing] Green Oil, 539 So.2d at 223). The record before the Court shows that the case against the defendants took roughly twenty-nine months to come to trial after the case was filed. Further, pre-trial discovery involved approximately 18 depositions and the retention of an expert witness. The trial lasted a full seven days. The plaintiffs irrefutably incurred substantial expenses in litigating this case, supporting a finding that the award of punitive damages is not excessive under this factor. Under Parker, this factor weighs against a finding that the punitive damage awards were excessive. 6. Criminal sanctions. For reasons previously stated, no criminal sanction is available to the plaintiff. Moreover, this factor is inapplicable here as the record before the Court indicates that the defendants waived consideration of the criminal sanction Hammond/Green Oil factor. This factor weighs against a finding that the punitive damage awards were excessive. 7. Other civil actions. The record before the Court does not indicate that the defendants have similar cases pending. A similar type case was tried before this Court in January of 1999 with the jury finding in favor of the defendants. Following Parker, this factor weighs in favor of finding the award of punitive damages excessive. 8. Summary of the Hammond/Green Oil factors. After analyzing the factors articulated by Hammond, 493 So.2d 1374, and Green Oil, 539 So.2d 218, this Court concludes that five of the factors weigh in favor of the jury's award of punitive damages, and two factors weigh against it. IV. CONCLUSION The assessment of punitive damages should be made with a view towards punishing the defendant, deterring others from similar conduct, and vindicating the public. Fuller v. Preferred Risk Life Ins. Co., 577 So.2d 878 (Ala.1991). The number of factors supporting the jury's award of punitive damages in this cause significantly outweighs the single factor in opposition. Moreover, this Court does not arrive at its conclusion because of simple arithmetic. Each factor is carefully weighed in light of the evidence and the mandates of precedential authority. The weighing of these factors is the salient concern, and the most consequential component of this Court's legal calculus is the reprehensibility of the defendants' conduct, which, at the risk of redundancy, reveals a pattern of trickery and deceit. Accordingly, after due consideration of the evidence and applicable precedential authorities, this Court determines that the punitive damages awarded in this case were not excessive and affirms the verdict of the jury. After a thorough examination of the record in this case, including the evidence produced in the post-verdict Hammond hearing, we conclude that the respective punitive damage awards of $250,000 each to three of the four plaintiff-couples exceed what the tests of BMW of North America, Inc. v. Gore, supra , allow. To pass the tests, these three punitive damage awards must be remitted by the respective sums stated in the table below: Plaintiffs Punitive Award Remittitur Remaining Pun. Award Woodham $250,000 $58,337 $191,663 Lester $250,000 $20,620 $229,380 Sergeant $250,000 $71,462 $178,538 The remainders of these three reduced punitive damage awards, together with the punitive damage award in favor of the Willises, which is not excessive, together with the respective compensatory awards in favor of the four sets of plaintiffs, adequately punish the defendants and should deter similar conduct.