Court Opinion

ID: 4220756
Source: CourtListenerOpinion
Date Created: 2017-11-15 22:02:10.584843+00
Date Added: 2024-06-11T14:42:18.677422
License: Public Domain

Cite as 2017 Ark. App. 618

                 ARKANSAS COURT OF APPEALS
                                        DIVISION I
                                       No. CV-17-117

                                                  Opinion Delivered   November 15, 2017

THY N. TRAN                                       APPEAL FROM THE PULASKI
                               APPELLANT          COUNTY CIRCUIT COURT,
                                                  SIXTEENTH DIVISION
V.                                                [NO. 60CV-15-1741]

THI T. VO AND TRAN NGOC UYEN                      HONORABLE MORGAN E. WELCH,
VO                                                JUDGE
                     APPELLEES

                                                  REVERSED

                          N. MARK KLAPPENBACH, Judge

     Appellant Thy Tran (“Tran”) was in a nail-salon partnership with appellees Thi Vo and

Tran Ngoc Uyen Vo (collectively “Vo”). The salon was established and operated in leased

space in Maumelle, Arkansas. Within months, the relationship among the partners soured.

After being ousted from the partnership and the salon, Tran sued Vo alleging several claims

related to being wrongfully terminated, excluded from the still-active business, and deprived

of her share of the partnership’s assets. A jury in Pulaski County Circuit Court found in favor

of Tran and against Vo on the claims of breach of contract and conversion, awarding Tran

$57,200 in compensatory damages and $114,400 in punitive damages. Vo filed a motion for

new trial or remittitur. The trial court upheld the compensatory-damages award but granted

Vo’s motion for a new trial or remittitur as to the punitive-damages award. In this one-brief
                                 Cite as 2017 Ark. App. 618

appeal, Tran asserts that the trial court erred in granting a new trial or remittitur. We agree

that the trial court erred and reverse.

       Here, the trial court decided to grant a new trial or remittitur for a reason it raised sua

sponte and not for any of the reasons set forth in Vo’s motion. The trial court determined

that it had not fully instructed the jury regarding punitive damages. Although Vo had

objected during trial that a punitive-damages instruction should not have been given at all

because there was no evidence of malice on Vo’s part, the trial court disagreed and decided

to give the model jury instruction on punitive damages. Vo admittedly did not raise any

objection to the form of this model jury instruction, either during discussions between the

court and counsel or when the jury was instructed. The jury was instructed as follows on

punitive damages, in line with the Arkansas Model Jury Instruction on this topic:

       Now, in addition to compensatory damages for actual losses [Tran] may have
       sustained, [Tran] asked for punitive damages. Punitive damages may be imposed to
       punish a wrongdoer and deter the wrongdoer and others from similar conduct. In
       order to recover punitive damages from the defendants, [Tran] has the burden of
       proving by clear and convincing evidence, first, that the defendants [Vo], knew or
       ought to have known, in light of the surrounding circumstances, that their conduct
       would naturally and probably result in damage and that they continued such conduct
       with malice or reckless disregard of the consequences from which malice may be
       inferred, or that [Vo] intentionally pursued a course of conduct for the purpose of
       causing damage.

       The jury rendered the verdict as recited above. Vo filed a motion for new trial or

remittitur within ten days of the judgment being filed. In that motion, Vo challenged the

entire award, both compensatory and punitive, presenting various arguments, none of which

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concerned jury instructions.1 Tran responded to each of the bases raised by Vo, asserting that

no new trial or remittiur was warranted.

         At the hearing on the motion for new trial or remittitur, the trial judge remarked that

the punitive-damages instruction was not complete because the second page was missing,

leaving out the definition of “clear and convincing evidence.” The model instruction recites

that “‘[c]lear and convincing evidence’ is proof that enables you without hesitation to reach

a firm conviction that the allegation is true.” The trial court, sua sponte, raised this as an

issue.

         Tran’s attorney asserted that the jury “understood punitive damages and how they’re

going to work.” Only then, and with prodding by the trial court, did Vo’s attorney agree

with the trial court that the failure of the jury to be given a definition of clear and convincing

evidence constituted “an error or irregularity” in the proceedings. Vo’s attorney said that he

followed along with the trial court’s reading of this model jury instruction to the jury to

ensure its accuracy but did not recall thinking that this instruction was incomplete. The trial

court stated from the bench that it had the discretion to raise this issue on its own in the

         1
        Vo’s arguments included contentions (1) that the trial court made an improper
comment as to the credibility of Vo’s CPA witness and asked prejudicial and improper
questions of the CPA such that a mistrial should have been granted; (2) that the jury
improperly awarded punitive damages based on breach of contract and not the tort of
conversion; (3) that the jury awarded compensation on gross profits instead of net profits
resulting in an excessive compensatory award; and (4) that the jury’s compensatory award
improperly gave Tran more money than she would have received had the partnership
agreement been honored.

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interest of justice and that the lack of a definition of “clear and convincing evidence”

invalidated the punitive-damages award. The trial court remarked that, regardless of whether

the attorneys realized that the instruction lacked that definition, “I knew about it and it’s been

bothering me.”

       A formal order was prepared and filed. The order set forth that Arkansas Rule of Civil

Procedure 59(a) provides that a new trial may be granted when there is any irregularity in the

proceedings or when there is error in the assessment of the amount of recovery, whether too

small or too large. The order found that the jury instruction on punitive damages “was

incomplete, and thus the jury was not properly instructed on the basis for awarding punitive

damages.” The order recited that Ark. R. Civ. P. 59 implicitly grants a trial court power to

order a new trial when the damages are excessive, unless the prevailing party agrees and

consents to a remittitur. The trial court’s order upheld the compensatory-damages award but

gave Tran the option of agreeing to the remittitur of the punitive-damages award or

submitting to a new trial.2 Tran filed a timely notice of appeal from that order.3

       Remittitur is within the inherent power of the court if an award is grossly excessive

       2
         Speaking from the bench, the trial court told Tran’s attorney that the options were
to “set aside the whole thing and grant you a new trial if you want” or to allow the judgment
to stand with only the compensatory-damages award.
       3
         Initially, a finality issue arose as to this appeal, filed as docket number CV-16-741,
and on November 30, 2016, our court permitted Tran to dismiss the appeal to obtain a final
order disposing of all claims. The trial court entered a final order, and Tran filed another
notice of appeal in order to appeal the order granting a new trial or remittitur. This was
docketed as the present appeal under docket number CV-17-117.

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or appears to be the result of passion or prejudice. Holmes v. Hollingsworth, 234 Ark. 347, 352
S.W.2d 96 (1961). It may be ordered sua sponte. McNair v. McNair, 316 Ark. 299, 307, 870
S.W.2d 756, 761 (1994). When considering the issue of remittitur of punitive damages, we

review the issue de novo. See Smith v. Hansen, 323 Ark. 188, 914 S.W.2d 285 (1996). We

consider the extent and enormity of the wrong, the intent of the party committing the wrong,

all the circumstances, and the financial and social condition and standing of the erring party.

See United Ins. Co. of Am. v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998); McLaughlin v.

Cox, 324 Ark. 361, 922 S.W.2d 327 (1996). Punitive damages are a penalty for conduct that

is malicious or perpetrated with the deliberate intent to injure another. See United Ins. Co.,

supra. When punitive damages are alleged to be excessive, we review the proof and all

reasonable inferences in the light most favorable to the party awarded those damages, and we

determine whether the verdict is so great as to shock the conscience of this court or to

demonstrate passion or prejudice on the part of the trier of fact. See Houston v. Knoedl, 329
Ark. 91, 947 S.W.2d 745 (1997); Collins v. Hinton, 327 Ark. 159, 937 S.W.2d 164 (1997).

       In this case, however, the grant of a new trial or remittitur of punitive damages was

based solely on the notion that the jury was required to be informed of a definition of “clear

and convincing evidence.” The remittitur was not grounded in any defect in stating what

Tran had to prove in order to be awarded punitive damages; in any inherent problem with

the amount awarded such as the award’s ratio or relationship to compensatory damages; in any

perceived passion or prejudice of the jury; or in the allegation that the punitive-damages

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instruction should not have been given at all. The trial court’s order of remittitur here simply

does not fall within the ambit of the law regarding remittitur.

       Thus, our focus is on whether the trial court abused its discretion in finding that a new

trial was warranted due to a jury instruction not including a definition of clear and convincing

evidence. We hold that such an abuse of discretion is demonstrated in this instance.

       The law affecting the granting of a new trial is well settled. Arkansas Rule of Civil

Procedure 59(a) (2016) provides that a new trial may be granted, among other reasons, for any

irregularity in the proceedings by which a party was prevented from having a fair trial or for

error in the assessment of the amount of recovery, whether too large or too small. Pursuant

to Ark. R. Civ. P. 59(e), a trial court has the discretion to grant a motion for a new trial,

timely filed, for a reason not stated in the motion, but the trial court must give the parties

notice and an opportunity to be heard on the matter, and it must specify in its order the

ground therefor. The test we apply on review of the granting of a new trial is whether there

was a manifest abuse of discretion. Carr v. Woods, 294 Ark. 13, 740 S.W.2d 145 (1987); Eisner

v. Fields, 67 Ark. App. 238, 998 S.W.2d 421 (1999). A manifest abuse of discretion in granting

a new trial means discretion improvidently exercised, meaning that the discretion is exercised

thoughtlessly and without due consideration. Nazarenko v. CTI Trucking Co., 313 Ark. 570,

856 S.W.2d 869 (1993). A showing of an abuse of discretion is more difficult when a new

trial has been granted because the party opposing the motion will have another opportunity

to prevail. Young v. Honeycutt, 324 Ark. 120, 919 S.W.2d 216 (1996). Accordingly, that party

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has less basis for a claim of prejudice than does one who has unsuccessfully moved for a new

trial. Carr v. Woods, supra; Garnett v. Crow, 70 Ark. App. 97, 99–100, 14 S.W.3d 531, 533

(2000).

          We hold that the trial court abused its discretion in granting a new trial to Vo based

on purported irregularities to which there were no proper objections raised by Vo. See Grubbs

v. Hindes, 101 Ark. App. 405, 414, 278 S.W.3d 575, 581 (2008). The failure to object to the

giving of an erroneous jury instruction before the case is submitted to the jury constitutes a

waiver of any error committed by the court in giving it. Delta Sch. of Commerce, Inc. v. Wood,

298 Ark. 195, 769 S.W.2d 738 (1989); Tinsley v. Cross Dev. Co., 277 Ark. 306, 642 S.W.2d
286 (1982); Willis v. Elledge, 242 Ark. 305, 413 S.W.2d 636 (1967). Vo did not object to the

form of the model jury instruction at the time the trial court determined that it would be

given, nor did Vo raise an objection when the jury instruction was read to the jury on the

basis that the jury instruction was incomplete. Vo did not raise an objection to the lack of a

definition of clear and convincing evidence in the motion for new trial.

       Arkansas Rule of Civil Procedure 51 requires the trial court to inform counsel of the

jury instructions it proposes to submit to the jury and states that

       [n]o party may assign as error the giving or the failure to give an instruction unless he
       objects thereto before or at the time the instruction is given, stating distinctly the
       matter to which he objects and the grounds of his objection, and no party may assign
       as error the failure to instruct on any issue unless such party has submitted a proposed
       instruction on that issue. Opportunity shall be given to make objections to instructions
       out of the hearing of the jury.

       A mere general objection shall not be sufficient to obtain appellate review of the

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       court’s action relating to instructions to the jury except as to an instruction directing
       a verdict or the court’s action in declining to do so.

       Jefferson v. Nero, 225 Ark. 302, 307, 280 S.W.2d 884, 886–87 (1955), is instructive and

reflects the supreme court’s opinion that

       the failure to instruct on a question is not ground for reversal, where no request is
       made therefor. . . If appellant felt the word “negligently” should have been more
       specifically defined it was incumbent upon him to request such an instruction before
       he could complain on appeal.

       In this case, the jury was properly instructed that Tran bore the burden to establish

certain facts by clear and convincing evidence in order to be awarded punitive damages.

Absent evidence to the contrary, there is a presumption that the jury has obeyed its

instructions. Pearson v. Henrickson, 336 Ark. 12, 20, 983 S.W.2d 419, 424 (1999). The jury

never sent a query to the trial court indicating any confusion about what this instruction

meant or what the definition of “clear and convincing evidence” was.4 In this particular case,

we hold that the trial court abused its discretion in granting a new trial or remittitur of

punitive damages. See Ford Motor Co. v. Nuckolls, 320 Ark. 15, 894 S.W.2d 897 (1995). Vo

did not demonstrate that remittitur or new trial was warranted, and the basis improperly raised

by the trial court on its own did not warrant a new trial or remittitur.

       4
        The trial judge had instructed the jurors that they were “not required to set aside your
common knowledge[.]” The jury had been instructed that the party with the burden of proof
must establish it by a preponderance of the evidence “unless a different standard of proof is
required by another instruction.” With regard to punitive damages, the jury had been
instructed that Tran bore the burden to prove entitlement to those damages “by clear and
convincing evidence.” The jury had been instructed, “[i]f any of you needs to communicate
with me for any reason, write me a note and give it to the bailiff.”

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       Reversed.

       WHITEAKER and VAUGHT, JJ., agree.

       Hancock Law Firm, by: Alex Burgos; and Brett D. Watson, Attorney at Law, PLLC, by:

Brett D. Watson, for appellant.

       One brief only.

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