Court Opinion

ID: 9702639
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:19:57.950417+00
Date Added: 2024-06-11T18:21:40.122486
License: Public Domain

SABERS, Justice
(concurring in part, dissenting in part).
I dissent on Cross-Appeal Issue I on the basis that a compensatory damage award against a principal is sufficient to support a punitive damage award against the agent of that principal.
Both Schaffer and Ehrichs (Plaintiffs) were awarded compensatory and punitive damages against the principal, Edward D. Jones Co. They also were awarded punitive damages against the agents, Edwards and Tebben. The trial court struck these punitive damage awards, relying upon settled South Dakota law that punitive damages are not allowed absent an award of compensatory damages. Case v. Murdock, 488 N.W.2d 885, 889 (S.D.1992). Plaintiffs argue on cross-appeal that we should reinstate the punitive damage awards against Edwards and Tebben because they are supported by the award of compensatory damages against Jones. I agree.
The jury submitted three written questions. The first asked whether compensatory damages must be the same for all defendants. The second asked: “Can only one Defendant be listed for compensatory damages?” The third question asked “If punitive damages were to be awarded, can there be different dollar amounts for each Defendant?” In response, the jury was informed that it could assess punitive damages in differing amounts against each of the Defendants and referred to Instruction No. 41, which told the jury that it could assess damages “against either the individual broker or Edward D. Jones or both if the evidence so shows.” Plaintiffs argue that “[g]iven the verdict, the language of Instruction 41 and the jury’s questions, it is obvious the jury believed it could assess the compensatory damages solely against Jones and have that award serve as the basis for punitive damages against all the Defendants.” I agree again.
Plaintiffs note that the jury was never told that an award of punitive damages must be supported by a specific award for compensatory damages. If such an instruction had been given, the jury may have awarded Plaintiffs at least nominal damages against *931Tebben and Edwards sufficient to support an award of punitive damages. Plaintiffs failed to submit such an instruction, however, “and cannot now predicate error on the court’s failure to so instruct.” Eldridge v. Northwest G.F. Mutual Ins. Co., 88 S.D. 426, 221 N.W.2d 16, 20 (1974) (citing SDCL 15-6-51(a); Ross v. Ross, 77 S.D. 358, 92 N.W.2d 147 (1958)).
Unlike the conference opinion however, I decline to view the failure to return compensatory damages against Edwards and Teb-ben as an exoneration by the jury. Rather, under the totality of the circumstances, the award of punitive damages is an indication by the jury that they believed Edwards and Tebben to be culpable parties whose willful disregard of Plaintiffs’ rights warranted punishment. Wells v. Smith, 171 W.Va. 97, 297 S.E.2d 872, 881 (1982), overruled in part by Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897, 908 (1991) (overruling Wells only “to the extent that it stands for the proposition that a jury may return an award for punitive damages without finding any compensatory damages.”).
Where there is evidence implicating the defendants] as [ ] active participants] in a tortious plan or scheme which deliberately disregards the rights of others, and the jury returns compensatory damages against some of those involved in the scheme, the failure of the jury to return an award of compensatory damages against a particular defendant will not of itself allow that defendant to escape liability for punitive damages assessed against him.
Wells, 297 S.E.2d at 881 (emphasis added).
There is even more reason against a broad application of the rule that prohibits punitive damages absent an award of compensatory damages here because compensatory damages against Jones clearly resulted, at least in part, from the conduct of the agents, Edwards and Tebben. As noted by the conference opinion, “[t]he rationale of the rule requiring actual damages before punitive damages may be awarded is that we do not punish conduct, no matter how malicious or reprehensible, which in fact causes no injury.” Dicker, 523 P.2d at 375. Therefore, the reasons for the rule are also satisfied because we are only punishing conduct which in fact caused injury. In fact, it would be improper for the jury to return compensatory damage verdicts against Edwards and Tebben if such damages were already included in the compensatory damages against Jones. Such would be prohibited as double recovery. See Nelson v. Web Water Development Ass’n, Inc., 507 N.W.2d 691, 701 (S.D.1993) (Sabers, J., concurring specially).
In my opinion, the jury’s failure to return an award of compensatory damages against Tebben and Edwards does not relieve them from liability for the award of punitive damages because the punitive damage awards are supported by the award of compensatory damages against Jones. The rule should be that an award of compensatory damages against the principal is sufficient to support an award of punitive damages against the agent of the principal. Therefore, I would reverse the trial court’s granting of the motion to strike the punitive damage awards against Edwards and Tebben and remand with instructions to reinstate them.*

 I acknowledge an argument can be made that Plaintiffs failed to impress upon the jury the need to award compensatory damages sufficient to support an award for punitive damages and request the necessary jury instruction.