Opinion ID: 2494143
Heading Depth: 3
Heading Rank: 1

Heading: Gore Reprehensibility Guidepost and Green Oil Factors (1), (2), (5), and (7)

Text: Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct. Gore, 517 U.S. at 575, 116 S.Ct. 1589. The circuit court's Hammond order is instructive on this point; it states, in pertinent part: Ross is an anathema upon the court system and the public. He has engaged in a pattern and practice of ignoring and actively avoiding the authority of the courts himself, while using hyper-technical or distorted interpretations of the law that suit him against others. The harm Ross causes in the process is substantial, not only to the private parties directly involved, but also to the integrity of the law and the integrity of society. In this case, Ross purchased the tax interest in the property at issue. [MERS], holding a pre-existing mortgage on the property, foreclosed upon and then redeemed the property from the tax sale by payment to the Madison County Judge of Probate, receiving a Certificate of Redemption. Ross began negotiation with [MERS] for further payment to him for purported improvements he made to the property. Simultaneously, [MERS] instituted Court proceedings to remove Ross's tenants from the property. Ross's knowledge of and involvement with those proceedings is evident, as is his avoidance of legitimately having his entitlement to any payments finally determined through such proper channels. Ross made considerable effort to keep his right to additional payments a live issue, giving him, in his mind, a colorable claim to possess the property, while actively avoiding any action he might be required to admit resolved the issue. Ross also, during the relevant time, unsuccessfully sued [Fletcher] for failing to pay him rent on the involved property and received a judgment indicating he was not entitled to collect rent from tenants on that property [Ross v. Fletcher, DV-05-2689]. Despite ... court rulings that provided Ross ample notice of his tenuous position, Ross persisted in possessing the property and renting it to tenants. [MERS], having received a final order of the Madison County Circuit Court ejecting Ross's tenants, informed Ross of that Court action and conveyed the property to the [Rosen-Ragers].... .... Ross's conduct in this case cannot be viewed in isolation. This Court previously adjudicated the case of Cindy L. Schrock v. Howard Ross, CV 06-900. In that case, Ross also purchased the tax interest in a property. That property was redeemed by a mortgage company after foreclosing on the property. That property was sold to an innocent third party, Cindy Schrock. Ms. Schrock entered into her new property and evidenced her possession. When Ms. Schrock was away from her property on vacation, Ross moved tenants in and fought to keep them in the property. This Court, after a full trial, restored possession to Ms. Schrock and ordered Ross to pay damages of $16,639. .... The scope of Ross's enterprise, as well as his general way of doing business, is further evidenced by the fact that the Madison County Judge of Probate holds approximately $150,000 for Ross. When the property at issue in this case was redeemed by a payment of approximately $1,600 to the Probate Judge, Ross did not collect the redemption money, to which he was entitled, as the tax sale purchaser. According to Ross's testimony, he purposely failed to collect the funds for concern that his claims to possession of the property would thereby be diminished. Similar evidence was presented in Ms. Schrock's case. Ross's approach to these funds is further evidence of the reprehensible gamesmanship he applies to his enterprise. The accumulation of these funds to approximately $150,000 evidences the vastness of his scheme. Finally, that Ross would deny himself possession of such a sum to further his scheme is evidence of its profitability and Ross's resources. Any citizen owning one of the numerous properties represented by the $150,000 in redemption proceeds held for Ross by the Probate Judge must beware. Ross avoids collecting those funds to aid his articulation of an excuse for possession of those properties. Ross has demonstrated that, if he can find those properties vacant due to an owner's holiday vacation, renovation or otherwise, he will lease them. He will lease them after a court rules his tenants cannot possess them. He will lease them after a court rules he is not entitled to collect rent on them. Every month he can lease them equals another rental payment received. He will not prosecute a resolution of his articulated excuses for possessing the properties or collect redemption payments due him, because to do so would alleviate excuses for possession and collecting further rent. Ross's tactics are of great concern. Each time Ross places tenants in a home belonging to another (whether the homeowner be on vacation or absent for other reasons), he places tenants and homeowners at great risk for dangerous confrontation. Each time he displays to a homeowner his ability to, in fact, place tenants in their home and collect rent in the face of deeds, certificates of redemption, court orders and other protections in which our society vests faith, he erodes confidence in our society and encourages the worst of behavior. Ross challenges those in his path to navigate the Court system and laws (with which he is quite experienced) and stop him if they can. The purpose of a punitive damages award is to deter conduct. Many court rulings should have deterred Ross before the punitive damages award in this case. Ross, however, is persistent. The circuit court correctly noted that this case cannot be considered in a vacuum. Although it is unrefuted that service of process was never formally effected upon Ross in MERS v. Campbell, CV-05-917, in which he could have resolved the precise issue regarding his possessory interest in this property, he had actual notice of ongoing litigation as early as February 13, 2006, when MERS informed him of an imminent hearing involving his claim to the itemized expenses. Also, as the trial court's Hammond order reveals, Schrock v. Ross, CV-06-900, was another civil action involving similar conduct in which an identical substantive issue was litigated to a conclusion adverse to Ross. ( Green Oil factor (7).) Ross appealed the judgment entered in that case, and this Court affirmed the judgment without an opinion on December 7, 2007. Ross v. Schrock, 25 So.3d 1204 (Ala.2007) (table). Although the trial court's final judgment in Schrock was not entered until December 22, 2006, that is, approximately two months after the Rosen-Ragers sued Ross, Schrock is still evidence of similar conduct, though not necessarily of Ross's knowledge of wrongdoing. With regard to the cost of litigation ( Green Oil factor (5)), the Rosen-Ragers submitted the affidavit of their attorney, which stated that the Rosen-Ragers had already paid attorney fees totaling $9,880.41 and had incurred other expenses totaling $6,247.21. In lieu of the further payment of attorney fees on an hourly basis, the Rosen-Ragers agreed to pay their counsel an undisclosed percentage of any sums ultimately collected from Ross. Notwithstanding this contingency-fee arrangement, the Rosen-Ragers' counsel computed the hours expended by the legal professionals employed as if billed at the regular hourly rates and arrived at $82,000 as the value of costs, expenses, and legal fees attributable to the prosecution of this case. To be weighed against these observations is the fact that the purchasing of tax-sale property is, in itself, a laudable practice, one to be encouraged, rather than discouraged. Hence, [t]he Alabama legislature... has enacted statutes favoring the sale of land to secure payment of delinquent taxes. William R. Justice, Redemption of Real Property Following Tax Sales in Alabama, 11 Cumb. L.Rev. 331, 331 (1980) (emphasis added). Ross testified that if the punitive-damages verdict is upheld, it will effectively put [him] out of business regarding properties that [he] could afford to buy at tax sales, and he will simply stop purchasing tax-sale properties. Because such a result would be counterproductive, the goal must be not to discourage Ross from engaging in the practice per se, but essentially to dissuade him from ignoring probate court orders and certificates. He has already been required to pay $16,639 in the Schrock case.