Court Opinion

ID: 2687980
Source: CourtListenerOpinion
Date Created: 2014-07-31 21:45:11.820385+00
Date Added: 2024-06-11T12:38:44.096929
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 13-1456
                              Filed May 14, 2014

PAUL GARBER and TAMMIE GARBER,
     Plaintiff-Appellees,

vs.

JEREMIAH HOSMER and BILL LYONS CAR COMPANY,
     Defendant-Appellants.
________________________________________________________________

      Appeal from the Iowa District Court for Cerro Gordo County, Gregg R.

Rosenbladt, Judge.

      Jeremiah Hosmer and Bill Lyons Car Company appeal from the jury award

of punitive damages against them. REVERSED AND REMANDED.

      Joel J. Yunek of Yunek Law Firm, P.L.C., Mason City, for appellants.

      Jason Springer of Springer & Laughlin Law Offices, P.C., Des Moines, for

appellees.

      Considered by Danilson, C.J., and Potterfield and McDonald, JJ.
                                          2

POTTERFIELD, J.

       Jeremiah Hosmer and Bill Lyons Car Company (jointly Hosmer) appeal

from the jury award of punitive damages against them. We reverse the award as

the jury found no wilful and wanton acts leading to actual injury of Paul and

Tammie Garber (the Garbers) by Hosmer to support an award of punitive

damages.

       Tammie Garber purchased a recreational vehicle from the Bill Lyons Car

Company. The Garbers later attempted to return the vehicle, and an altercation

between Paul Garber and Jeremiah Hosmer ensued.1 On June 6, 2012, the

Garbers filed suit against Hosmer for civil assault, civil battery, fraudulent

misrepresentation, and loss of consortium.          They also requested punitive

damages. Trial was held August 6–8, 2013. The jury submitted a verdict on

August 8, which read in relevant part as follows:

       Question No. 1: Was the defendant, Jeremiah Hosmer at fault for
       assault?
       Answer “yes” or “no.”
       ANSWER: NO
       ....
       Question No. 8: Was the defendant, Jeremiah Hosmer at fault for
       battery?
       Answer “yes” or “no.”
       ANSWER: NO
       ....
       Question No. 15: Did Tammie Garber suffer a loss of spousal
       consortium as a result of the assault or battery to Paul Garber?
       Answer “yes” or “no.”
       ANSWER: NO
       ....
       Question No. 17: Do you find the defendant, Bill Lyons Car
       Company liable for any of the damages listed in Question No. 16?
       Answer “yes” or “no.”

1
  The testimony by both parties regarding the details of this altercation are in direct
contradiction.
                                       3

      ANSWER: NO
      ....
      Question No. 19: Was the defendant, Jeremiah Hosmer at fault for
      fraudulent misrepresentation?
      Answer “yes” or “no.”
      ANSWER: NO
      ....
      Question No. 24: Do you find by a preponderance of clear,
      convincing and satisfactory evidence the conduct of the defendant,
      Jeremiah Hosmer constituted willful and wanton disregard for the
      rights or safety of Paul Garber?
      Answer “yes” or “no.”
      ANSWER: Yes
      Question No. 25: What amount of punitive damages, if any, do you
      award against the defendant, Jeremiah Hosmer?
      ANSWER: $20,000.00
      ....
      Question No. 26: Is the defendant, Bill Lyons Car Company liable
      for punitive damages?
      Answer “yes” or “no.”
      ANSWER: Yes
      ....
      Question No. 27: What amount of punitive damages, if any, do you
      award against the defendant, Bill Lyons Car Company?
      ANSWER: $5,000.00

The court considered whether the jury’s verdict that Hosmer committed no

assault, battery, or fraudulent misrepresentation was inconsistent with the award

of punitive damages.    The court entered judgment on the award of punitive

damages, finding the jury “was presented evidence from which they could find

that Plaintiff Paul Garber suffered actual damages” and therefore punitive

damages could be awarded without a finding of compensatory damages.

      Hosmer and Bill Lyons Car Company appeal from the jury’s award of

punitive damages. The question we are presented with is whether or not this

award of punitive damages without any finding of fault against either defendant

can stand under our law. We conclude it cannot.
                                           4

       Generally, the trial court has some discretion when faced with
       inconsistent answers in a verdict. See Dutcher v. Lewis, 221
       N.W.2d 755, 762 (Iowa 1974) (“The trial court has three alternatives
       where the answers are consistent with each other but inconsistent
       with the general verdict: (1) order judgment appropriate to the
       answers notwithstanding the verdict; (2) order a new trial; or
       (3) send the jury back for further deliberations. Ordinarily, it is
       discretionary with the court as to which of these alternatives to
       choose.”). However, the question whether a verdict is inconsistent
       so as to give rise to the exercise of that discretion is a question of
       law.

Clinton Physical Therapy Servs., P.C. v. John Deere Health Care, Inc., 714

N.W.2d 603, 609 (Iowa 2006); see also State v. Merrett, 842 N.W.2d 266, 275–

76 (Iowa 2014) (“As we explained in [State v. Fintell, 689 N.W.2d 95, 101 (Iowa

2004)], ‘If jury verdicts are to be examined for inconsistency, the test to be

applied is whether the verdict is so logically and legally inconsistent as to be

irreconcilable within the context of the case.’”).

       Iowa Code section 668A.1 (2011) governs the award of punitive damages,

and reads, in part:

       1. In a trial of a claim involving the request for punitive or exemplary
       damages, the court shall instruct the jury to answer special
       interrogatories or, if there is no jury, shall make findings, indicating
       all of the following:
       a. Whether, by a preponderance of clear, convincing, and
       satisfactory evidence, the conduct of the defendant from which the
       claim arose constituted willful and wanton disregard for the rights or
       safety of another.

Punitive damages “are not recoverable as of right and are only incidental to the

main cause of action. The reason for requiring actual damages to be shown is

that punishment and deterrence are warranted only when harm has been done.”

Pringle Tax Serv., Inc. v. Knoblauch, 282 N.W.2d 151, 154 (Iowa 1979) (internal

citation omitted). “In determining whether punitive damages are so excessive
                                          5

that they demonstrate passion and prejudice on the part of the jury, we will

consider whether the punitive damage award is reasonably related to the

malicious conduct of the defendant which resulted in actual injury or damage to

the plaintiff.”   Ryan v. Arneson, 422 N.W.2d 491, 496 (Iowa 1988).             “Only

evidence that is relevant to the underlying wrong for which liability is imposed can

support an award of punitive damages.” Wilson v. IBP, Inc., 558 N.W.2d 132,

142 (Iowa 1996) (emphasis added).

       In Knoblauch, our supreme court upheld a district court’s award of punitive

damages absent a finding of actual damages. 282 N.W.2d at 152. The district

court in that case (a bench trial) found in its ruling that defendant had violated the

covenant not to compete, but had destroyed evidence, preventing the calculation

of actual damages, though there was no question such actual damages were

suffered. Id. In upholding the district court’s award, our supreme court held:

       Harm has been established when the record shows actual damage
       has been suffered, even though for one reason or another the
       damages have not been computed or awarded. Therefore we hold
       that a failure to award actual damages will not bar exemplary
       damages when actual damage has in fact been shown.

Id. at 154. The district court in this case upheld the jury’s award of punitive

damages under this language.           However, we find the case at hand is

fundamentally distinguishable since the issue here is not damages, but whether

there was fault on the part of Hosmer. The jury explicitly rejected every claim of

harmful conduct on the part of Hosmer, and so did not reach the issue of

compensatory damages, but went on to award punitive damages.

       Answers to special interrogatories by a jury constitute special findings of

particular questions of fact.   Iowa R. Civ. P. 1.934.      “Like a special verdict,
                                          6

special interrogatories help to focus the jury on the important issues in the case

that bear upon the general verdict the jury must reach.” Clinton Physical Therapy

Servs., P.C., 714 N.W.2d at 610.         Iowa Code 668A(1)(a) requires “tortious

actions or fraudulent activity” for punitive damages to be permissible. Watkins v.

Lundell, 169 F.3d 540, 544–45 (8th Cir. 1999) (“While an ordinary breach of

contract does not give rise to punitive damages in Iowa, if the breach is

accompanied by or results in independently tortious actions or fraudulent activity

then punitive damages are permissible.”); see also Pogge v. Fullerton Lumber

Co., 277 N.W.2d 916, 919 (Iowa 1979). The jury expressly found no tortious

actions or fraudulent activity in this case by answering all of the special

interrogatories regarding the underlying claims in the negative. The trial court

erred in entering judgment on punitive damages; we reverse the award of

punitive damages in this case and remand to the trial court for proceedings

consistent with this opinion. See Kimmel v. Iowa Realty Co., Inc., 339 N.W.2d

374, 384 (Iowa 1983) (stating the proper procedure for curing error on

improperly-submitted exemplary damages is to “modify[] the judgment so as to

comport with that which should have been entered and remand[] the case to the

district court for entry of the proper judgment”).

       REVERSED AND REMANDED.