Underwood vs. Charter Federal
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IN THE COURT OF APPEALS OF TENNESSEE FILED March 08, 1999 AT KNOXVILLE Cecil Crowson, Jr. Appellate C ourt Clerk ALVIN UNDERWOOD, Appellant/Cross-Appellee, v. CHARTER FEDER AL SAVINGS BANK, Appellee /Cross-A ppellant. ) ) ) ) ) ) ) ) ) ) C/A NO. 03A01-9809-CV-00288 KNOX CIRCU IT HON. WHEELER ROSENBALM, JUDGE AFFIRMED AND REMANDED DAVID DA Y, Cookeville, for Appellant/Cross-Appellee. GREGORY C. LOGUE and MICHAEL J. KING, WOOLF, McCLANE, BRIGHT, ALLE N & C ARPE NTER , PLLC ., Knoxville , for App ellee/Cross-A ppellant. O P I N IO N Franks, J. This is an appeal in an action for damages for wrongful execution, where th e jury awarde d $105,0 00.00 in co mpensa tory damage s, and $42 0,000.00 in punitive damages, and the Trial Judge suggested a remittitur of $200,000.00 on the punitive damages award. By way of background, in 1988, appellee Charter Federal Savings Bank ( Charter Federal )1 brought suit against Randy Underwood to collect on two promissory notes. Default judgment was taken as to Randy and a garnishment was issued to his fath er, plaint iff Alv in Und erwoo d d/b/a U nderw ood A utomo tive Par ts. Alvin answered the garnishment, stating that Randy did not work for him, but the answer w hich was filed with th e Clerk ap parently did no t immediate ly 1 Charter Federal was later acquired by First American Bank. appear in the file at the Clerk s office. On August 5, 1988, Charter Federal petitioned for a scire facias to secure a c onditional ju dgemen t against Alv in based u pon his failure to answer the garnishment. The petition was served upon Randy, who apparently did not advise Alvin of its issuance. On September 6, 1988, a final judgment was entered against Alvin, and on Octo ber 17, 198 8, representa tives from C harter Fede ral and the K nox Co unty Sheriff s Department went to Underwood A uto Parts and levied on vehicles, tools, auto parts and other items at the business location. On October 26, Alvin filed a motion to set aside the judgment, contending that he had properly answered the garnishment, but on N ovember 9, 198 8, the seized property was sold. T he Chancery Court granted Alvin s motion to set aside the judgment and awarded him the proceeds of the sale, finding that Alvin had timely answered the garnishment. This court, on appeal of that action, affirmed.2 This suit followed. Charter Federal contends that it is entitled to a new trial based on juror misconduct. One juror apparently maintained a checking account with First American that had become overdrawn. At the time of the trial he no longer maintained the account, although a co llection agency was appa rently still seeking to recover a deficiency from the juror. Du ring voir dire, the trial court asked all prospective juro rs the following question: Are any of you employed at this time or any family member employed by the bank in any capacity or do any kind of business with the bank, such as selling supplies to the bank or providing any kind of services to them for which you receive compensation or payment? Charter F ederal con tends that this ju ror s failure to respond to this 2 Charter Federal Savings Bank v. Underwood, (Tenn. App. Eastern Section filed May 3, 1991.) 2 questio n and o thers co nstitutes juror m iscond uct. Failure to disclose information during voir dire must be based upon a materia l questio n reaso nably calc ulated to produ ce an a nswe r. State v. Atkins, 867 S.W.2d 3 50, 356 (T enn.Crim .App. 199 3). The T rial Court ca refully conside red this issue, and said: The Co urt s looked very carefully at the questions th at it propounded to perspective jurors and must conclude that those questions were designed to elicit information from jurors about their conne ction at the pre sent time, that is a t the time of th e trial, and that the Court in no instance delved into any prior connections, although the parties through their counsel did ask about some prior connections including whether any juror had been sued by a bank. But it does not appea r that [the juror in question] or other jurors w ere specifically asked about controversies between them and other banks other than lawsuits, and the Court simply cannot conclude from the questions that were propounded and the responses given by the prospectiv e jurors that the questions th at the Cou rt asked abo ut in connections between jurors and the bank were sufficient to cause [the juror in que stion] to revea l his prior exp erience w ith the defen dant in this case, and the Court does not believe that there has been a showing of any intent or neglect on his part to conceal his prior banking experience with the defendant, and must most respectfully conclude that there s been no show ing of juror bias sufficie nt to impug n the verdic t in this case and grant a new trial. The record supports the Trial Judge s conclusions. Some questions directed specifically to other jurors and not the juror in question, arguably could have provoked a respo nse from this juror, but non e of those questions ad dressed this juror s course of conduct with the bank. We find no merit in this issue. Charter Federal further contends that the Trial Court improperly allowed the plaintiff to relitigate certain issues, and insists that an issue may not be relitigated if it is actually and necessarily determined in a former action between the parties as ruled in King v. Brooks, 562 S.W.2d 42 2, 424 (Tenn. 197 8). Charter Federal contends the Trial Court erred in admitting evidence concerning its alleged w rongful conduc t regarding the answe r to the garnishment. In 3 the original Chancery Court action, both the Trial Judge and this Court determined that plaintiff timely filed an answer and that the answer was legally sufficient. These were the only issues that were actually and necessarily determined. In its findings, the Chancery Court did note that a scire facias was issued upon the failure of an Answer of Underwood Auto Parts to be docketed in the Court s file . . . . Additionally, the Chance llor noted tha t Charter Fe deral presen ted eviden ce that the an swer w as not in the file or computer system when judgment was originally entered. The Court stated that [h]owever this may be, plaintiff did answer. Thus, the presence of the answer in the file was not a nece ssary finding. Further, evidence ab out Charter Federal s wrongf ul conduc t or indepen dent know ledge of th e answe r was not n ecessary to dete rmin e wh ethe r the Plaintiff had actu ally an swe red the garnishm ent. A ccor ding ly, the plain tiff wa s entitled to introd uce the dispute d evide nce. Charter Federal also argues that the Trial Court erred in permitting eviden ce con cerning suffici ency of s ervice o f proce ss and o ther pro cedura l defec ts. As noted previously, these issues were not actually and necessarily determined in the prior pro ceed ing. T hus, the T rial C ourt did n ot err in permitting this testim ony. Charter Federal maintains that it is entitled to a new trial because the jury s award was excessive. First, it argues that the evidence does not support the jury s award of $105,000.00 in compensatory damages. Plaintiff claimed damages based up on the valu e of the inv entory, equipm ent sold, lost pro fits, damag e to reputation a nd emotio nal distress. Th e record ref lects that the T rial Judge ca refully scrutinized the award and properly fulfilled its duty to act as the thirteenth juror and approved the jury s verdict. Charter Federal presented its own evidence, including expert testimony, concerning damages. The jury found plaintiff s claims to be cred ible a nd awar ded dam ages acco rdingly. The record con tains sufficient material evidence o f damages to sup port 4 the jury s verdict, and we affirm. Charter F ederal furth er argues th at the plaintiff failed to mitig ate his damages because he did not stop the execution sale from going forward. The plaintiff believed that allowing the sale to continue would be better because his inventory and equipment had been damaged after the seizure. Charter Federal had the burden of proof on the is sue of mitigatin g dam ages. Price v. Osborne, 147 S.W.2d 412 (Tenn.A pp. 1940 ), and the jury w as properly instru cted on this iss ue and ap parently believed the plaintiff acted properly. The Trial Court did not err in approving the award of compensatory damages. Both parties have appealed the award of punitive damages. Plaintiff contends that the damages as remitted were insufficient, while Charter Federal argues that punitive damages were not justified or were excessive. To be entitled to punitive damages, a plaintiff must prove by clear and convincing evidence that the defendant acted e ither inte ntionall y, fraudu lently, mali ciously or reckles sly. Hodges v. S.C. Toof & Co., 833 S .W.2d 896 (T enn. 19 92). A ddition ally, Hodges lists factors to consider in assessing punitive damage awards. The record shows the Trial Court followed the requirements of Hodges to decide whether punitive damages were justified. The Court considered the manner in which the plaintiff s property was levied upon and the conduct of the parties, particularly the defendant following that levy, and after defendant was advised that the levy was inappropriate in determining that the evidence met the criteria of Hodges. The record supports the Trial Judge s conclusion finding that punitive damages were justified in this case. The Trial Court is required to review the jury s award of punitive damages and set forth reasons for its decision. In this case, the Trial Court reviewed the eviden ce suppo rting an aw ard of pu nitive dam ages in light o f the factors stated in Hodges, but plaintiff argues the Trial Court did not properly state its reasons for 5 remitting the award. In analyzing the factors of Hodges, the Trial court noted mitigating circ umstance s. For exam ple, the Co urt noted the re was no specific evidence that Charter Federal profited from its conduct and the plaintiff s answer was not in th e file be fore the levy occu rred. The Tria l Court pro perly analyzed the jury s award a nd set forth its reasons for suggesting a remittitur. The award, as remitted, retains the integrity of the jury s verd ict. See Guess v. Maury, 726 S.W.2d 906 (Tenn.App. 1986). We affirm the judgment of punitive damages as remitted. Finally, plaintiff arg ues that the T rial Court co mmitted er ror in connection with its suggestion of a remittitur of the punitive damages award from $420,00 0.00 to $22 0,000.00. T he plaintiff c laims that the T rial Court erro neously gave him a choice o f accepting the remittitur of punitive da mages, or a new trial on all issues, including lia bility. We believe the plaintiff has misconstrued what the Trial Court did in this case. The Trial Court directed that its memorandum opinion be incorporated into its Orde r addressing the defen dant s post-tria l motions. T hat Opinio n provide s, in part, as follows: . . . the Court is constrained to conclud e that the award of c ompensatory damage s in the amo unt of $1 05,000 is w arranted by the evidence in this case and that the evidence does not preponderate against that finding by the jury, and the court approves that verdict of $105,000 for compensatory damages in this case in all respects. The Court s Order makes three decrees: 1. Defendant s Motions except as to remittitur are denied, and the Court affirms the verdict of $105,000.00 in favor of the Plaintiff for compensatory damages. 2. The Court orders that punitive damages are appropriate in this case, but suggests a remittitur in favor of the Defendant of $200,000.00, thus making the punitive damage award to be the sum of $220,000.00. 3. The Plaintiff shall have fifteen (15) days from the entry of this Order 6 in which to accept the suggestion of remittitur or a new trial shall be granted. (Emphasis added). While the order does not expressly limit the scope of the new trial to the issue of punitive damages, we believe a fair reading of the entire order indicates that this is what the Court intended to do. It is unlikely the Judge would have approve d the verdic t as the thirteenth judge only to c onditionally gra nt a new tria l. Moreover, assuming arguendo plaintiff s interp retation of th e judgme nt is correct, such judg ment wo uld be in the Trial Cou rt s discretion. T his issue is w ithout merit. The judg ment of th e Trial Co urt is affirme d, and the c ost of the ap peal is assessed one-half to each party, and the cause is remanded. __________________________ Herschel P. Franks, J. CONCUR: ___________________________ Don T. McM urray, J. ___________________________ Charles D. Susano, Jr., J. 7
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