Court Opinion

ID: 9568224
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:01:40.973667+00
Date Added: 2024-06-11T10:24:28.991487
License: Public Domain

HUNTER, Judge,
dissenting.
Because I believe Bernard Scarborough (“plaintiff’) did not prove by clear and convincing evidence that defendant’s actions constituted willful or wanton conduct or malice warranting punitive damages, I respectfully dissent.
I.
The majority states that our standard of review is whether or not a scintilla of evidence existed to support the jury’s award. This is true for our review of the granting of a motion for judgment notwithstanding the verdict. However, per statute, the evidentiary standard for punitive damages is whether the existence of an aggravating factor — fraud, malice, or willful or wanton conduct- — -was proven by “clear and convincing evidence.” N.C. Gen. Stat. § 1D-15(b) (2005). One of this Court’s previous cases is particularly helpful in clarifying the interaction between these standards.
In Schenk v. HNA Holdings, Inc., 170 N.C. App. 555, 559, 613 S.E.2d 503, 507, disc. review denied, 360 N.C. 177, 626 S.E.2d 649 (2005), this Court considered a trial court’s grant of the defendant’s motion for directed verdict on the issue of punitive damages. As we have noted many times, “[o]n appeal, the standard of review for a judgment notwithstanding the verdict is the same as that for a directed verdict[.]” Scarborough v. Dillard’s, Inc., 179 N.C. App. 127, 132, 632 S.E.2d 800, 803 (2006).
“The standard of review... is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient ás a matter of law to be submitted to the jury.” Our North Carolina statutes establish the requirements for punitive damages as follows:
Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
*438N.C. Gen. Stat. § 1D-15(a) (2003). The existence of the aggravating factor must be proved by clear and convincing evidence. N.C. Gen. Stat. § 1D-15(b) (2003). ... To award punitive damages against a corporation, “the officers, directors, or managers of the corporation [must have] participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.” N.C. Gen. Stat. § 1D-15(c) (2003). . . . [T]he issue on appeal is whether there was sufficient evidence that the officers, directors, or managers of defendant, HNA Holdings, Inc., participated in or condoned willful or wanton conduct. See id.
Plaintiffs contend Winter’s order to destroy Whitlock’s memorandum constituted willful and wanton conduct by defendant. However, plaintiffs have not proved by clear and convincing evidence that destruction of the memorandum constituted “conscious and intentional disregard of and indifference to the rights and safety of others.” N.C. Gen. Stat. § 1D-5(7).
Schenk, 170 N.C. App. at 559-60, 613 S.E.2d at 507 (citations omitted) (emphasis added). The Court went on to examine the other evidence brought by the defendant under a clear and convincing standard. Id. at 560-61, 613 S.E.2d at 507-08. When the Court concluded no sufficient evidence had been presented, it overruled the plaintiffs’ assignment of error regarding the directed verdict. Id. at 562, 613 S.E.2d at 509.
.11.
As such, it seems clear that the question before this Court is whether plaintiff provided clear and convincing evidence of willful or wanton conduct or malice on the part of defendant. Because I believe no such evidence was presented, I would affirm.
“The clear and convincing evidence standard is greater than a preponderance of the evidence standard required in most civil cases and requires ‘evidence which should “fully convince.” ’ ” Schenk, 170 N.C. App. at 560, 613 S.E.2d at 508 (citation omitted). Punitive damages may be awarded against a corporation only if “the officers, directors, or managers of the corporation participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.” N.C. Gen. Stat. § 1D-15(c). Thus, plaintiff must prove that (1) the officers, directors, or managers of defendant Dillard’s participated in or condoned (2) conduct that was (a) fraudulent, (b) malicious, or (c) willful and wanton. This he cannot do.
*439A.
First, as to the conduct of Dillard’s employees, we note that plaintiff did not assign error to any of the trial court’s findings of fact, and as such, they are presumed to be correct. See Okwara v. Dillard Dep’t Stores, Inc., 136 N.C. App. 587, 591, 525 S.E.2d 481, 484 (2000). Among these unchallenged findings of fact are these: Schul met with the assistant district attorney solely in his capacity with the Charlotte-Mecklenburg Police Department, not as a part-time employee of Dillard’s; Dillard’s would not have been allowed to take part in any way in the initiation of a felony prosecution; Dillard’s took no part in the proceedings before the grand jury to obtain an indictment against plaintiff; and there was no evidence at trial that Dillard’s had any role in the location, timing, or circumstances of plaintiff’s arrest. Taking these findings as true, it is clear that plaintiff did not provide clear and convincing evidence to the trial court that Dillard’s officers, directors, or managers took part in the actions complained of. As such, he has not satisfied the first element to obtain punitive damages.
B.
Plaintiff next argues that there was sufficient evidence of (a) willful or wanton or (b) malicious conduct. I disagree.
1.
In 1995, our legislature enacted a statute regarding punitive damages that heightened the standard of proof for the “aggravating factors” — fraud, malice, or willful or wanton conduct — to clear and convincing evidence, and also established that punitive damages will not be awarded on the basis of vicarious liability. 1995 N.C. Sess. Laws ch. 514, § 1D-15. “Willful or wanton” means “the conscious and intentional disregard of and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm.” N.C. Gen. Stat. § 1D-5(7) (2005). Willful or wanton conduct is “more than gross negligence.” Id.
Plaintiff argues that Dillard’s acted willfully and wantonly by quickly procuring his prosecution for embezzlement, despite evidence that plaintiff made a mistake due to forgetfulness and knowing that it would cause him to lose his full-time job at First Union Bank. In support of this claim, plaintiff cites two cases in which our Supreme Court found sufficient evidence for punitive damages based on “a reckless and wanton disregard of plaintiff’s rights.” See Jones v. *440Gwynne, 312 N.C. 393, 409-10, 323 S.E.2d 9, 18 (1984) (holding that the jury could have found the employer’s superficial and cursory investigation of an employee’s alleged embezzlement “ ‘reckless and wanton disregard of the plaintiff’s rights’ ”); Williams v. Boylan-Pearce, Inc., 69 N.C. App. 315, 320, 317 S.E.2d 17, 20-21 (1984) (holding that the jury could find that the plaintiff-employee was prosecuted in a reckless and wanton manner where the employee who had plaintiff arrested for theft failed to seek out existing evidence in plaintiff’s favor).
However, these cases were decided prior to the enactment of our current punitive damages statute in 1995, discussed above. As such, the standard of proof in those cases was not clear and convincing, and these cases are no longer applicable.
Plaintiff further argues that Dillard’s acted willfully and wantonly by failing to inquire into his character or record and failing to obtain statements from all possible witnesses, including Betty Jordan, one of the two women who received the shoes, before terminating him and procuring his prosecution for embezzlement. Plaintiff also argues that Dillard’s failed to present exculpatory evidence to the police, as the police officers were not told that Mr. Gainsboro, the manager on duty on the night of the incident, stated that he thought Mr. Scarborough made “a mistake.”
However, Officers Wright and Schul took various steps to investigate plaintiff’s possible embezzlement. The day after the incident, before plaintiff was terminated, he was interviewed by Mr. Hicklin, Mr. McClusky, and Officer Wright, and Officer Wright took a written statement from him. At that time, Dillard’s had the register tape from the previous evening confirming that no payment was received for the shoes, and Mr. Gainsboro had spoken to witnesses Ms. Brown and Ms. Withers, the latter of whom believed Mr. Scarborough had purposely given away the shoes. Before Officer Schul met with Assistant District Attorney Proctor to discuss the embezzlement charge, he interviewed and obtained written statements from Ms. Brown, Ms. Withers, and Dillard’s manager Mr. Gainsboro. Ms. Withers stated that Mr. Gainsboro seemed to think that Mr. Scarborough made “a mistake,” but Mr. Gainsboro did not assert such in his statement to police. Although Dillard’s could have conducted a more thorough investigation, including interviewing positive character witnesses and Betty Jordan, Mr. Scarborough has not proven by clear and convincing evidence that Dillard’s actions constituted a reckless and wanton disregard of his rights.
*4412.
Plaintiff next argues that there was sufficient evidence of malice. I disagree.
“Malice” is defined by statute as “a sense of personal ill will toward the claimant that activated or incited the defendant to perform the act or undertake the conduct that resulted in harm to the claimant.” N.C. Gen. Stat. § 1D-5(5) (2005). Plaintiff argues that the jury could have inferred such ill will from evidence that Dillard’s store manager, Mr. McClusky, had previously reprimanded him for referring a customer to another shoe store, and from evidence that Dillard’s considered plaintiff to be inept. These rationales are speculative and depend on a series of inferences that could have been made by the jury, but certainly do not constitute clear and convincing evidence that defendant acted with malice.
III.
Because I believe that the correct standard in this case is the clear and convincing standard set out by statute, and that plaintiff has not met that standard, I would affirm.