Opinion ID: 424016
Heading Depth: 1
Heading Rank: 3

Heading: The effect of the jury verdicts

Text: 70 The jury verdict for Gregg on the issue of common law fraud stands, but, because of the error in instructions, the assessment of compensatory damages cannot stand. However, USI's argument that once it is recognized that the damages were calculated under an incorrect instruction, Gregg as a matter of law was not injured, therefore he no longer had a cause of action for common law fraud, is frivolous. The basis of Gregg's fraud claim is USI's alleged fraudulent promises to provide sufficient capital for successful operation of the former Gregg companies and to employ Gregg to operate and manage his former companies. Balancing of the value of stock reciprocally transferred, or to be transferred, is unrelated to Gregg's allegations of fraud. 71 This leaves the question of what happens to the $500,000 award of punitive damages. We would have thought that under Florida law punitive damages are not recoverable in a tort action unless the jury finds the defendant liable for compensatory, or at least nominal, damages. McLain v. Pensacola Coach Corp., 152 Fla. 876, 13 So.2d 221 (1943); Hanft v. Southern Bell Telephone & Telegraph Co., 402 So.2d 453 (Fla.Dist.Ct.App.1981); Hauser Motor Co. v. Byrd, 377 So.2d 773, 775 (Fla.Dist.Ct.App.1979). We are now not certain. In Eglin Federal Credit Union v. Curfman, 386 So.2d 860, 862 (Fla.Dist.Ct.App.1980), the district court of appeals held that the jury's failure to assess compensatory damages did not preclude award of punitive damages where the special verdict form used by the jury expressly found the party liable for the tort. The jury verdict here found that USI defrauded Gregg, and we have held that this verdict stands. We remand to the district court for it to give first consideration to the viability of the award of punitive damages, an issue of Florida law that has been neither briefed nor argued to us. 72 USI contends that the faulty instruction on damages reversibly affected its counterclaims asserting common law fraud (First) and securities fraud (Second and Third), on which the jury found in favor of Gregg. It argues that the basis for the jury's verdict might be that although Gregg committed fraud USI suffered no injury, and such a finding of no injury might have been brought about by the court's incorrectly excluding the right to receive earnout stock from calculation of the consideration given up by USI on the closing date. The several possible verdicts submitted to the jury included in each a unit covering liability and a second component assessing damages (with a blank for the amount of damages). The verdict returned on USI's counterclaims was only the liability component, We find for Gregg on USI's counterclaim against Gregg. As the case was presented to and decided by the jury, nothing supports USI's contention that this verdict on liability in favor of Gregg was based upon a jury conclusion that Gregg had committed fraud but USI had suffered no damages. 73