Court Opinion

ID: 9600576
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:28:27.558151+00
Date Added: 2024-06-11T09:08:20.486835
License: Public Domain

BAKES, Justice,
dissenting:
I dissent from that portion of the majority opinion which affirms the award of punitive damages against the defendant Palos Verdes, but nevertheless gratuitously, and by obiter dictum, throws out the rules relating to punitive damages which were established in Cox v. Stolworthy, 94 Idaho 683, 496 P.2d 682 (1972), and which have been consistently followed by this Court until today. See, e.g., Yacht Club Sales & Service, Inc. v. First Natl. Bank of North Idaho, 101 Idaho 852, 623 P.2d 464 (1980); Linscott v. Rainier Natl. Life Ins. Co., 100 Idaho 854, 606 P.2d 958 (1980); Hatfield v. Max Rouse & Sons Northwest, 100 Idaho 840, 606 P.2d 944 (1980); Thompson v. Dalton, 95 Idaho 785, 520 P.2d 240 (1974); Jolley v. Puregro Co., 94 Idaho 702, 496 P.2d 939 (1972). I say gratuitously because the rule announced by the Court today with regard to overruling Cox v. Stolworthy, supra, was not raised by either party in their issues on appeal. This Court has repeatedly stated that it will not consider issues not assigned as error. See Cox v. Mountain Vistas, Inc., 102 Idaho 714, 639 P.2d 12 (1981); State ex rel. Haworth v. Berntsen, 68 Idaho 539, 200 P.2d 1007 (1948).
When the majority states that “Cox has been demonstrated to be at best unworkable and at worst impossible,” ante at 668, the appellant in this case will surely ask in a petition for rehearing, “Where has it been demonstrated in this case?” It was not shown before the trial court because the issue was never raised there. It has not *932been demonstrated on appeal because the parties did not assign that as error. In fact, just to the contrary, appellant’s counsel stated at oral argument:
“I think that this Court owes it to litigants and attorneys alike to adopt and be consistent on rules with respect to punitive damages. And you’ve done so— you’ve enunciated a rule — and whether I agree with it or disagree with it is immaterial, it seems to me, in terms of the context of your question. Now, if you’re going to ... say, well, this is a separate tort, and this is something else, and we should have a cubby hole for each one, we’re back where we started before that line of decisions started; I think it would be error of this Court; I think it would be a disservice to this state, to the people, and to the attorneys. And I say that sincerely, and you know, each one of you, that I’m on the other side 99.9% of the time. But we need a rational rule, and I think you’ve set one up. Now, I don’t always agree with it — I can’t say that. But it’s something I understand, and it’s something I can apply, and it’s something I can tell my clients is the law, and it’s as good as any I can devise. I don’t know how you can better it. And I say that sincerely.... ” (Emphasis added.)
Contrary to the majority’s assertion, the record in this case “demonstrates” that the Cox standards are something that can be understood, and something that can be applied. There is nothing in the record of this case to support the majority’s statement that the Cox standards have “been demonstrated to be at best unworkable and at worst impossible.” Ante at 668.
The only attempt by the majority to “demonstrate” the Cox standards to be unworkable results from an erroneous reading of the decision of this Court in Jolley v. Puregro Co., 94 Idaho 702, 496 P.2d 939 (1972). The majority quotes in part from 94 Idaho at 709, 496 P.2d 939 as follows:
“The difficulty with these standards is that they provide no definable objective guidelines for determining what is a reasonable exemplary damages award; the standards appear to serve merely as manipulative vehicles by which the reviewing court can substitute its viscerally-dictated judgment for that of the trier of fact. See generally Summerfield v. Pringle, 65 Idaho 300, 316 et seq., 144 P.2d 214, 222 et seq. (1943) (J. Ailshie dissenting); Note, ‘Exemplary Damages in the Law of Torts,’ 70 Harv.L.R. 517, 529-531 (1957).” Jolley v. Puregro Co., supra, 94 Idaho at 709, 496 P.2d at 946.
However, a careful reading of the quoted portion from the original text of the opinion, taken in context, will disclose that in using the words, “The difficulty with these standards,” the Court in Jolley was not referring to the standards of Cox v. Stolworthy, as the majority infers, but to the standards which existed prior to Cox v. Stolworthy. The Court in Jolley v. Puregro upheld and approved the Cox standards.
Additionally, the majority appears to have misread the facts in Jolley v. Puregro. Thus, the majority states that the Court, in Jolley, “attempted to fit various factual situations into one of the three delineated categories ... often without success or, if successful, achieved in an unconvincing manner.” Ante at 667. Further, the majority states, “Although the case [Jolley v. Puregro] clearly involved a private business dispute, we, for reasons which the unkind or critical might call convenience, held the existence of an element of consumer fraud and classified the matter under category one of the Cox scheme.” Ante at 667. However, a careful reading of the facts in Jolley v. Puregro, supra, will disclose that not only had the plaintiff Jolley’s property been misappropriated by the defendant Puregro, but as the Court noted, “Apparently Puregro also took the equipment of other farmers, at least some of whom reclaimed their equipment from Puregro at their Mountain Home business location.” Supra 94 Idaho at 704, n. 1, 496 P.2d at 941, n. 1. The Court found evidence of a “knowing ‘business practice’ of taking other persons’ property and, when not immediately reclaimed, selling the same and retaining the funds.” Supra at 711, 496 P.2d at 946. The Court then noted:
*933“That brings this case close enough to the Boise Dodge case [where Boise Dodge turned back the odometers oí several used cars, thereby perpetrating a fraud on several purchasers of those automobiles] to justify an award of additional exemplary damages over and above those additional damages allowable under the general rule in Cox v. Stolworthy, i.e., reasonable attorney fees, witness fees, and other non-compensable litigation costs including lost time and inconvenience.” Id.
Thus, the majority’s statement that “Cox has been demonstrated to be at best unworkable and at worst impossible” finds no support in the record of this case, or in our previous cases, particularly Jolley v. Puregro.
The other premise upon which the majority relies in overruling Cox v. Stolworthy is that the definitive standards set out in Cox are “inconsistent with [the] law as P -elates to other damages .... ” Ante at 667. The majority again states that theme at page 668 when it states, “A judge or jury should not be hampered with strictly construed schemes or rules which inappropriately require the forcing of many-faceted fact patterns into neat pigeonholes or compartments. Such deference to the trial court is consistent with the appellate overview of compensatory damages.” However, a review of the law as it relates to compensatory damages will disclose that the Cox v. Stolworthy standards are much less strict and give a great deal more latitude to the factfinder than often do the rules and standards relating to compensatory damages. For example, this Court has previously adopted specific formulas to be utilized by trial courts in computing an award of compensatory damages. The area of the law involving injury to property is replete with such formulas. For instance, the measure of damages for temporary injury to property generally is the diminution in the rental value of the property or the amount necessary to restore it to its former condition. Bradford v. Simpson, 97 Idaho 188, 541 P.2d 612, appeal after remand, 98 Idaho 830, 573 P.2d 149 (1975): see Alesko v. Union Pacific RR. Co., 62 Idaho 235, 109 P.2d 874 (1941) (if injury is temporary, value of premises in original condition or diminution in market value is limit of recovery if smaller than cost of restoration). If the property is totally destroyed, the measure of damages is the value of the property at the time and place of its destruction. Skaggs Drug Centers, Inc. v. City of Idaho Falls, 90 Idaho 1, 407 P.2d 695 (1965). On the other hand, if property is (only partially destroyed, the measure of damages is the difference between the reasonable market value of the property at the place of injury, immediately before and immediately after injury or, if such sum be less, the reasonable cost of repairs to restore the property to its previous condition. Id; see also C.C. Anderson Stores Co. v. Boise Water Corp., 84 Idaho 355, 372 P.2d 752 (1962); Thompson v. First Security Bank of Idaho, N.A., 82 Idaho 259, 352 P.2d 243 (1960). Similarly', specific rules regarding the measure of damages to be awarded for crop loss have been developed. As stated in Eliopulos v. Kondo Farms, Inc., 102 Idaho 915, 919, 643 P.2d 1085, 1089 (Ida.App.1982), “The measure of damages for crop loss is the difference between the value of crops actually raised, and the value of crops that would have been raised under normal conditions.” See Casey v. Nampa & Meridian Irr. Dist., 85 Idaho 299, 379 P.2d 409 (1963) (less the cost of maturing, harvesting and marketing).
Damages to be awarded in cases involving sales agreements are also to be determined under specific guidelines. In Snook v. Olinger, 36 Idaho 423, 211 P. 559 (1922), this Court stated that damages to be awarded to a buyer for a seller’s failure to deliver goods, in breach of contract, is the difference between the agreed purchase price of the goods and the market price of similar goods in the vicinity at the time delivery should have been made. See Bowman v. Adams, 45 Idaho 217, 261 P. 679 (1927) (seller’s remedy). Upon a buyer’s refusal of acceptance, a seller is entitled to resell the goods and recover the difference between the contract price and the price received on resale. See Hisaw v. Ingram, *93494 Idaho 751, 497 P.2d 1052 (1972); Ore-Ida Potato Products, Inc. v. Larsen, 83 Idaho 290, 362 P.2d 384 (1961).
This Court has fixed the measure of damages to be awarded in other types of contract cases as well. In a case involving the breach of a construction contract, the measure of damages to be awarded is the market price of completing or correcting the work. See Nelson v. Hazel, 91 Idaho 850, 433 P.2d 120 (1967); Boise City v. National Surety Co., 30 Idaho 455, 165 P. 1131 (1917). When a defective piece of equipment is installed and full contract price is not paid, the measure of damages for the breach of contract is, in addition to special damages, the difference between the amount actually paid by the owner and the reasonable value of the equipment received. See Rino v. Statewide Plumbing & Heating Co., 74 Idaho 374, 262 P.2d 1003 (1953).
Finally, in cases involving the transfer of real property the measure of damages to which a vendor is entitled upon a buyer’s default is the difference between the contract price and the market value of the premises at the time of breach. See Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979) (damages usually enhanced by rental value of premises during purchaser’s occupation); Anderson v. Michel, 88 Idaho 228, 398 P.2d 228 (1965) (unless parties have otherwise stipulated); State ex rel. Robins v. Clinger, 72 Idaho 222, 238 P.2d 1145 (1951). Conversely, damages to which a purchaser of land is entitled upon the seller’s breach of contract is the difference between the actual value of the property received and the purchase price. See Smith v. Holmquist, 47 Idaho 611, 277 P. 574 (1929).
The foregoing list of cases setting the standards for the measurement of damages previously applied by this Court in reviewing awards of compensatory damages is not exhaustive. It merely illustrates that even awards of compensatory damages must comply with strict standards set by this Court and are not within the unlimited discretion of the factfinder.
In overruling Cox, the majority abandons the punitive damages standards utilized consistently and successfully by this Court for more than ten years in favor of a system which employs no guidelines whatsoever. The majority places the decision of whether to award punitive damages and the amount of such an award entirely within the discretion of the trier of fact, which in turn is subject to review under the discretion of the trial court. The ad hoc punitive damage awards that are sure to follow will result in inconsistency and unpredictability in this area of the law. Furthermore, the resulting inconsistency will lead to evermore appeals of punitive damage awards, requiring the appellate courts to make a determination of whether an abuse of discretion in awarding the punitive damages has been shown, another ad hoc determination.
The so-called “general advisory guidelines” which the majority now says will be applicable to punitive damage awards are merely those rules that were in effect prior to our decision in Cox which, because of their uncertainty, led this Court to adopt the standards enunciated therein. In Jolley v. Puregro, supra, the Court said of those pre-Cox standards:
“The difficulty with these standards [pre Cox v. Stolworthy] is that they provide no definable objective guidelines for determining what is a reasonable exemplary damages award; the standards appear to serve merely as manipulative vehicles by which the reviewing court can substitute its viscerally-dictated judgment for that of the trier of fact.” 94 Idaho at 709, 496 P.2d at 946 (citations omitted).
Application of the “rules” advocated by the majority will merely result in one level of discretionary review being followed by another, with each reviewing court substituting its judgment for that of the previous reviewer. This procedure will not be unlike the procedures criticized by Chief Justice Donaldson in Cooper v. Board of Comm’rs of Ada County, 101 Idaho 407, 411, 614 P.2d 947, 951 (1980), and will result in “government by men rather than government by law.” With today’s opinion, the Court has *935abandoned a decade’s effort to bring some rationality to the law of punitive damages,