Court Opinion

ID: 6956707
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:38:47.050325+00
Date Added: 2024-06-11T16:08:17.601046
License: Public Domain

MANION, Circuit Judge,
concurring.
I join the court’s opinion and the thorough analysis of the instructions set out in part II.C of the opinion. I agree that the defendants are entitled to a new trial on the issue of punitive damages. I also concur with part II.D that concludes that under the circumstances in this case the admission of testimony from previous Subway landlords was not an abuse of discretion.
I am not as convinced, however, that punitive damages were warranted in the first *518place, even if the jury had been properly instructed. SSS indeed had no assets to speak of; initially Jannotta detrimentally relied on the representations that the company had the substantial value that would enable it to pay rent if the franchise subtenant did not. When the tenants did not pay, neither did SSS, thus damaging Jannotta. But Nicholas Jannotta was a sophisticated landlord who negotiated what he thought was a fairly strong lease (it included a revenue-sharing provision and a market area restriction). And he did collect rent payments from various tenants for nearly eight years. The Jannottas even executed “estoppel certificates” on two occasions that stated that the lease had not been breached, although they claim that was simply to get a new paying tenant on board. Furthermore, the Jannottas fully recovered what they had lost, albeit by filing suit. So there can be little doubt that the real losers here are the subtenants who opened a Subway business only to be subjected to inevitable failure because of the unwarranted competition — not from other fast food chains, but from their own. In my view (obviously it is only mine, since the issue was not before the jury) if anyone merited punitive damages it was the tenants who lost everything, including all the rent they had paid.
That being said, I accept the fact that a jury could have seen fit to award punitive damages, even under the instructions given. The question is how much. Even if the evidence established gross fraud with intent to injure (see Roboserve v. Kato Kagaku, 78 F.3d 266, 275-76 (7th Cir.1996)), and punitive damages were warranted, the amount awarded in this ease was much too high. (Punitive damages are not beyond an appellate court’s review. See Tincher v. Wal-Mart Stores, Inc., 118 F.3d 1125 (7th Cir.1997).) When denying the motion for remittitur, the district court commented that the owners were extremely wealthy. They were wealthy indeed, but that is not the only factor to be considered (nor should it be one of the most important). The jury principally must look at the enormity of the wrong and the potential liability of the defendant resulting from multiple claims. Any punitive damages should be confined to this case, and I would consider appropriate a three-to-one ratio (approximately $1 million), as opposed to the thirty-to-one ratio the jury actually awarded.
Enough said. The parties will present the punitive damages issue to a fresh jury under restructured instructions from the court. What went on before will be instructive to the parties and the court but will not be of any consequence in the next jury decision.