Opinion ID: 1769612
Heading Depth: 1
Heading Rank: 4

Heading: Whether the award of damages was excessive or otherwise improper.

Text: Allstate contends that the $2,000,000 damages award rendered against it is excessive and is the result of bias, passion, prejudice, or other improper motive. The trial court entered the following order after its hearing conducted pursuant to Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986): This cause, coming on to be heard ore tenus on the 8th day of July, 1991 on Allstate Insurance Company's motion for judgment notwithstanding the verdict or, in the alternative, for a new trial (`post-trial motion') and its motion to conduct a Hammond hearing and after hearing and weighing argument of counsel, the Court finds as follows: This is a fraud claim based on misrepresentation and concealment by Defendant Allstate through its agent Dan Phillips. Mr. Hilley testified that at the time of the application, Phillips informed him `in the event my house burns, they (Allstate) would rebuild my home or they would find me a replacement or they would pay me the market value of my home of $35,000.' What Allstate concealed from Plaintiff was that he first must obtain construction financing on his own to rebuild or at least get the house `in the dry' before Allstate would pay Mr. Hilley. It is not disputed that Hilley attempted to obtain financing at least at two financial institutions but to no avail. Consequently, Allstate refused to pay him, as represented to him by Phillips, and Hilley suffered a twenty-five thousand dollar loss because of his inability to obtain financing. The jury justifiably found that Phillips misrepresented and concealed the extent of coverage in order to induce Hilley to purchase the insurance. Additionally, there was testimony by Allstate that twenty to twenty-five percent of other homeowner insureds do not or cannot rebuild their homes after loss. While Plaintiff failed to produce [evidence as to] how many of the twenty to twenty-five percent could not obtain financing to rebuild, Allstate did admit that this situation arises often and they handle those situations in the same manner as in this case. There was sufficient evidence for the jury to find that the misrepresentation and concealment of coverage to Hilley was routinely extended to similarly situated insureds of Allstate. This Court has reviewed the evidence in this case from the impaneling of the jury to the post-trial motions and finds no reason or ground to order a new trial or a remittitur. The jury was extremely attentive during the trial of the case. The jury had a diverse background, from well-educated professional people to career hourly wage earners. They had an opportunity to observe the demeanor of each of the witnesses and the truthfulness thereof. The Court has looked for, but not found, bias, passion, prejudice, corruption, or other improper motives affecting the jury, its verdict, or any other aspect of the trial. This court has read and considered the long list of rules applicable to a review of jury verdicts set out with great clarity in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), and has found no reason to reduce or set aside the verdict. The verdict is justified by the evidence in this case, as will be discussed below. This Court is not authorized to become a thirteenth juror. In absence of any specific grounds enumerated in Hammond, supra, the Court is authorized to reduce a verdict only if it finds that it is `excessive as a matter of law.' Can it be said that the two million dollar verdict is excessive as a matter of law? A look at the facts reveal that James Hilley and his wife bought a home and wanted it insured. Being a home builder, he made substantial improvements on the home. Phillips inspected it and told Mr. Hilley that he had as `nice a home as is in the neighborhood' and placed a value of thirty-five thousand dollars on it. As a result of his conversation with Phillips, Hilley believed that, if a total loss occurred, he would be paid thirty-five thousand dollars. In essence, Phillips denied this. The jury found Hilley was justified in believing this and further found that he was not paid [in accordance with] the representations that were made to Hilley.... This finding is justified under the evidence. The disturbing fact in this case is the enormity of the wrong. Allstate's adjustor, Benjamin F. Frazier, testified that as the fire insurance adjustor in North Alabama, he has had other cases where homeowners are incapable of rebuilding their homes and that if `they do not replace it, we don't pay it.' James Hilley and other similarly situated policy holders were never informed that their homeowner's coverage was dependent on their respective financial abilities. Allstate's wrong consisted of falsely representing to these policy holders the extent of coverage on their homes and concealing the necessity of obtaining financing prior to Allstate's paying. The jury was justified in finding that this conduct was intentional, gross and malicious. A large and substantial fine [is] justified to punish the wrongdoer in this case and to prevent similar wrongdoings in the future. Under Hammond, supra, and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala. 1989), certain factors must be considered by the Court in evaluating the verdict. First, if the harm is grievous, the damages should be much greater. Here, Hilley [and] his pregnant wife and children were left homeless after being assured by Allstate that they would be `fully protected' in the event of total loss. Also, there is ample evidence to support a conclusion that this happens to twenty to twenty-five percent of Allstate's policy holders who suffer a total loss. It is without dispute that this conduct by Allstate [toward] Hilley is not an isolated case, but to the contrary, the normal way a policy holder can expect to be treated if he cannot obtain financing to rebuild his own home. Another consideration under Hammond, supra, is whether or not the defendant profited by [its] action. It is almost without dispute that Mr. Hilley suffered a twenty-five thousand dollar loss or, put differently, Allstate saved twenty-five thousand dollars by refusing to pay Mr. Hilley. This `profit' to the defendant, coupled with other similarly situated policy holders of the defendant, easily can result in enormous savings to Allstate Insurance. Finally, the financial position of the defendant is a factor to be considered.... No evidence was offered as to the financial position of Allstate and the Court is left without any guideline with which to judge the financial impact of this fine. For all the Court knows, the two million dollar fine is nothing more than a `slap on the wrist' to this wrongdoer. In fact, for all the Court knows, an additur may be appropriate in order to foster the primary purpose of punitive damages; i.e., to punish the wrongdoer and prevent similar wrongdoings in the future. As noted by this Court, the culpability and enormity of the wrong are both great in this case, thereby calling for a substantial fine. The Court cannot say the two million dollar fine imposed by this attentive jury is `excessive as a matter of law.' Accordingly, [the] defendant's motions for new trial, judgment notwithstanding the verdict, and reduction of the jury verdict are due to be, and they are hereby, denied. . . . . /s/ Julius S. Swann, Jr. Circuit Judge We believe that the facts of this case strongly support the trial court's conclusions. The trial court did not err in declining to reduce the $2,000,000 damages award. [3] [O]nly where the record establishes that the award is excessive or inadequate as a matter of law, or where it is established and reflected in the record that the verdict is based upon bias, passion, corruption, or other improper motive may a trial court order a new trial or remittitur. Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986). The record does not support Allstate's assertion that the jury's verdict was the result of bias, passion, prejudice, or any other improper motive. It has long been the rule in Alabama that jury verdicts carry with them a presumption of correctness, and that this presumption is strengthened when the trial court denies a motion for new trial. Alfa Mut. Ins. Co. v. Northington, 561 So.2d 1041, 1048 (Ala. 1990). See also Charter Hosp. of Mobile, Inc. v. Weinberg, 558 So.2d 909, 911 (Ala. 1990). Based upon the foregoing reasons, the judgment is affirmed. AFFIRMED. MADDOX, SHORES and KENNEDY, JJ., concur. HOUSTON, J., concurs specially.