Alkire v. First National Bank
Annotate this CaseJanuary 1996 Term
_______________
No. 23125
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LARRY E. ALKIRE,
Appellant
v.
FIRST NATIONAL BANK OF PARSONS,
A NATIONAL BANKING ASSOCIATION,
Appellee
v.
MOSLER, INCORPORATED, A DELAWARE CORPORATION,
THIRD-PARTY DEFENDANT BELOW
____________________________________________________
Appeal from the Circuit Court of Tucker County
Honorable C. Reeves Taylor, Judge
Civil Action No. 90-C-28
REVERSED AND REMANDED WITH DIRECTIONS
___________________________________________________
Submitted: January 17, 1996
Filed: July 15, 1996
James Paul Geary, Esq. David A. Sims, Esq.
Geary & Geary Debra Tedeschi Hall
Petersburg, West Virginia Sims & Hall
Attorney for the Appellant Elkins, West Virginia
Attorneys for Appellee
JUSTICE RECHT delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. The standard of review recited in Syllabus Point 1 in Mildred L.M. v. John O.F.,
192 W.Va. 345, 452 S.E.2d 436 (1994) and in Syllabus Point 1 in Barefoot v. Sundale
Nursing Home, 193 W.Va. 475, 457 S.E.2d 152 (1995), and their progeny, is clarified to
read as follows: In reviewing a trial court's denial of a motion for judgment notwithstanding
the verdict, it is not the task of the appellate court reviewing facts to determine how it
would have ruled on the evidence presented. Its task is to determine whether the
evidence was such that a reasonable trier of fact might have reached the decision below.
Thus, in ruling on a denial of a motion for judgment notwithstanding the verdict, the
evidence must be viewed in the light most favorable to the nonmoving party. If on review,
the evidence is shown to be legally insufficient to sustain the verdict, it is the obligation of
the appellate court to reverse the circuit court and to order judgment for the appellant.
2. In reviewing a trial court's granting of a motion for judgment notwithstanding the
verdict, it is not the task of the appellate court reviewing facts to determine how it would
have ruled on the evidence presented. Its task is to determine whether the evidence was
such that a reasonable trier of fact might have reached the decision below. Thus, in ruling
on the granting of a motion for judgment notwithstanding the verdict, the evidence must
be viewed in the light most favorable to the nonmoving party. If on review, the evidence
is shown to be legally sufficient to sustain the verdict, it is the obligation of the appellate
court to reverse the circuit court and to order judgment for the appellant.
3. The granting of a motion for judgment notwithstanding the verdict is reviewed de
novo, which triggers the same stringent decisional standards that are used by the circuit
courts. While a review of this motion is plenary, it is also circumscribed because we must
review the evidence in a light most favorable to the nonmoving party.
4. "In actions of tort, where gross fraud, malice, oppression, or wanton, willful, or
reckless conduct or criminal indifference to civil obligations affecting the rights of others
appear, or where legislative enactment authorizes it, the jury may assess exemplary,
punitive, or vindictive damages; these terms being synonymous." Syllabus Point 4,
Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58 (1895).
5. Under our punitive damage jurisprudence, it is imperative that the amount of the
punitive damage award be reviewed in the first instance by the trial court by applying the
model specified in Syllabus Points 3 and 4 of Garnes v. Fleming Landfill, Inc., 186 W.Va.
656, 413 S.E.2d 897 (1991), and Syllabus Point 15 of TXO Production Corp. v. Alliance
Resources Corp., 187 W.Va. 457, 419 S.E.2d 870 (1992), aff'd, 509 U.S. 443, 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993). Thereafter, and upon petition, this Court will review the
amount of the punitive damage award, applying the standard specified in Syllabus Point
5 of Garnes.
6. Every post-trial analysis as to the amount of the punitive damage award should be
conducted by the trial court exclusively within the boundaries of Syllabus Points 3 and 4
of Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991), and Syllabus
Point 15 of TXO Production Corp. v. Alliance Resources Corp., 187 W.Va. 457, 419 S.E.2d 870 (1992). We remove from the lexicon of reviewing the amount of a punitive damage
award the terms "really mean" and "really stupid," as they were applied in TXO.
7. Our punitive damage jurisprudence includes a two-step paradigm: first, a
determination of whether the conduct of an actor toward another person entitles that
person to a punitive damage award under Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58
(1895); second, if a punitive damage award is justified, then a review is mandated to
determine if the punitive damage award is excessive under Garnes v. Fleming Landfill,
Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991).
Recht, Justice:
The plaintiff, Larry E. Alkire, appeals an order of the Circuit Court of Tucker
County which vacated a jury verdict awarding him $1,050,000.00 in punitive damages.
We find reversible error in the trial court's vacating that portion of the verdict that awarded
punitive damages and, therefore, reverse that decision and remand this case for further
proceedings consistent with this opinion.
I.
THE FACTS
In 1986, Mr. Alkire, a resident of Tucker County and a recent high school
graduate, was employed by Parsons Texaco, owned by Russell and Joyce Shahan.
One of Mr. Alkire's duties was to take the daily receipts from Parsons Texaco and
Shop-N-Go (also owned by the Shahans) and deposit them in a night depository of the
defendant, First National Bank of Parsons (the Bank). On June 28, 1986, Mr. Alkire
made a deposit consisting of two bags from Shop-N-Go and one bag from Parsons
Texaco in the Bank's night depository. On the following day, the two Shop-N-Go bags
were retrieved from the night depository, but the Parsons Texaco bag was not to be
found. Consequently, the Parsons Texaco deposit was never logged upon the Bank's
records.
Approximately one month after the deposit, Mr. Alkire's employer became aware
of the missing deposit. A criminal investigation ensued under the direction of the West
Virginia State Police. Mr. Alkire was the target of the investigation upon suspicion that
he stole the missing deposit. The investigation climaxed with the matter being presented
to the Tucker County grand jury during its October 1986 term. The grand jury refused to
charge Mr. Alkire with a crime by returning a non-true bill. See W. Va.Code 52-2-8
(1923);(1) W. Va. R.Crim.P. 6(f).(2)
The grand jury's refusal to formally charge Mr. Alkire with a crime did little to
extinguish the shadow of suspicion surrounding him among the citizens of Parsons. The
uncertainty as to Mr. Alkire's involvement in the missing deposit made life difficult for Mr.
Alkire to the extent that he felt shunned in the community, feeling more "at ease away from
Tucker County than ... in Tucker County." The resulting slights, ridicule, embarrassment,
and shame became manifest to the point that, according to Mr. Alkire's mother, he suffered
a complete personality change.
Nearly two and one-half years after the deposit was lost, the Bank, by sheer
fortuity, discovered the deposit lodged in the recesses of the night depository. Despite
locating the lost deposit, the Bank chose not to inform Mr. Alkire of this discovery because,
according to the Bank, Mr. Alkire was not the customer whose deposit was missing. Mr.
Alkire eventually learned of the recovery of the deposit through an anonymous telephone
call on or about April 18, 1989, approximately six weeks after the deposit was recovered.
This civil action was filed by Mr. Alkire alleging the Bank's negligence, gross
negligence and fraud. The complaint demanded relief in the form of both compensatory
and punitive damages. The Bank impleaded Mosler, Inc., the manufacturer of the night
depository,(3) contending that any negligence in the construction, installation, and/or
maintenance of the night depository, which was the proximate cause of Mr. Alkire's
injuries, was attributable solely to Mosler. Following a jury trial, a verdict was returned
in favor of Mr. Alkire in the amount of $210,000 in the form of compensatory damages and
$1,050,000 in the form of punitive damages. The jury found the Bank to be the only party
at fault, with no culpability being found on the part of Mr. Alkire or Mosler, Inc.
II.
POST-TRIAL MOTIONS
The Bank filed post-trial motions, including: (1) a motion for a judgment
notwithstanding the verdict pursuant to West Virginia Rules of Civil Procedure 50(b);(4) (2)
a motion for a new trial pursuant to West Virginia Rules of Civil Procedure 59(a);(5)
and
(3) a motion for a reduction in the amount of the punitive damage award pursuant to West
Virginia Rules of Civil Procedure 59(e) (remittitur).(6)
The trial court denied all of the post-trial motions, except the motion which
opposed the punitive damage award. The trial court reasoned that there was insufficient
evidence to justify the issue of punitive damages being submitted to the jury. The trial
court expressed this opinion at first by seemingly reducing the amount of the punitive
damage award to zero, which would appear to implicate the granting of the motion for a
remittitur. In actuality, what the trial court did was to vacate the entire punitive damage
award, thereby granting the Bank's motion for judgment notwithstanding the verdict, on the
issue of punitive damages, pursuant to Rule 50(b) of the West Virginia Rules of Civil
Procedure.(7)
Because the trial court vacated the entire punitive damage award, no analysis was
made regarding the amount of the punitive damage award as required by our opinion in
Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991). The trial court
obviously reasoned that because the Bank's conduct did not entitle Mr. Alkire to a punitive
damage award, the amount of the award was irrelevant.
III.
STANDARD OF REVIEW
Mr. Alkire frames the issue on this appeal in terms of the trial court's failure to conduct
the nine-step post-trial analysis designed to measure the amount of the punitive damage
award as directed by Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897
(1991). We decline to accept this appeal in the shape moulded by Mr. Alkire.(8)
The trial
court dispensed with any analysis regarding the amount of the punitive damage award
because it was superfluous. Why go through the analysis of determining whether a
verdict is excessive if there is no verdict to analyze? The only issue on this appeal is
whether the trial court was justified in vacating the punitive damage award on the ground
that there was insufficient evidence of the type of malicious, wanton, willful, or reckless
conduct on the part of the Bank toward Mr. Alkire to submit the issue of punitive damages
to the jury.
We now frame our standard of review within the boundaries of the sufficiency of
the evidence to support the punitive damage verdict and judgment entered on that verdict.
This standard of review is a variation on the theme announced by this Court in two recent
opinions: Mildred L.M. v. John O.F., 192 W.Va. 345, 452 S.E.2d 436 (1994) and Barefoot
v. Sundale Nursing Home, 193 *128 W.Va. 475, 457 S.E.2d 152 (1995). Mildred L.M.
and Barefoot, like this case, engage in an examination of a decision relating to a motion
for judgment notwithstanding the verdict under Rule 50(b) of the West Virginia Rules of
Civil Procedure.
The procedural configuration of Mildred L.M. and Barefoot is significantly different
from this case because in those cases, the trial court denied the motion for judgment
notwithstanding the verdict, with an appeal filed by the moving party. In this case, the trial
court granted the motion for judgment notwithstanding the verdict, and an appeal filed by
the nonmoving party. This procedural difference requires a transposition of the standard
of review announced in Mildred L.M. and Barefoot regarding the denial of a motion for
judgment notwithstanding the verdict to a standard of review adapted to the granting of a
motion for judgment notwithstanding the verdict. Accordingly, the standard of review
recited in Syllabus Point 1 in Mildred L.M. v. John O.F., 192 W.Va. 345, 452 S.E.2d 436
(1994) and in Syllabus Point 1 in Barefoot v. Sundale Nursing Home, 193 W.Va. 475, 457 S.E.2d 152 (1995), and their progeny, is clarified to read as follows:
In reviewing a trial court's denial of a motion for judgment notwithstanding
the verdict, it is not the task of the appellate court reviewing facts to
determine how it would have ruled on the evidence presented. Its task
is to determine whether the evidence was such that a reasonable trier of
fact might have reached the decision below. Thus, in ruling on a denial
of a motion for judgment notwithstanding the verdict, the evidence must
be viewed in the light most favorable to the nonmoving party. If on
review, the evidence is shown to be legally insufficient to sustain the
verdict, it is the obligation of the appellate court to reverse the circuit court
and to order judgment for the appellant.
The standard of review, when a trial court grants a motion for a judgment
notwithstanding the verdict, such as in this case, will be as follows:
In reviewing a trial court's granting of a motion for judgment
notwithstanding the verdict, it is not the task of the appellate court
reviewing facts to determine how it would have ruled on the evidence
presented. Its task is to determine whether the evidence was such that
a reasonable trier of fact might have reached the decision below. Thus,
in ruling on the granting of a motion for judgment notwithstanding the
verdict, the evidence must be viewed in the light most favorable to the
nonmoving party. If on review, the evidence is shown to be legally
sufficient to sustain the verdict, it is the obligation of the appellate court
to reverse the circuit court and to order judgment for the appellant.
Having made those minor procedural adjustments to the formulation of the
standard of review vis-a-vis the granting and denying of a motion for judgment
notwithstanding the verdict, we can continue with our discussion of the standard of review
of the evidence in this case. We now can extrapolate from our analysis in Barefoot to the
extent that the trial court's granting of a motion under Rule 50(b) will be affirmed only if the
facts and inferences point so strongly and overwhelmingly in favor of the movant that no
reasonable jury could have reached a verdict against the movant. Barefoot, 193 W.Va.
at 482, 457 S.E.2d at 159. In performing this analysis, the credibility of the witnesses will
not be considered, conflicts in testimony will not be resolved, and the weight of the
evidence will not be evaluated. In other words, we will affirm the circuit court's ruling
granting the motion if, after scrutinizing the proof and inferences derivable therefrom in the
light most favorable to Mr. Alkire (the nonmoving party), we determine that a reasonable
fact finder could have reached but one conclusion: that the Bank was entitled to judgment.
The granting of a motion for judgment notwithstanding the verdict is reviewed de novo,
which triggers the same stringent decisional standards that are used by the circuit courts.
Barefoot, 193 W.Va. at 482, 457 S.E.2d at 159. While a review of this motion is plenary,
it is also circumscribed because we must review the evidence in a light most favorable to
the nonmoving party. Id.
Against this analysis, we examine whether the trial court properly granted the Bank's
motion for a judgment notwithstanding the verdict.
IV.
DOES BANK'S CONDUCT JUSTIFY
A PUNITIVE DAMAGE AWARD?
The type of conduct which gives rise to punitive damages in West Virginia was
first formulated in Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58 (1895), where the Court
stated in Syllabus Point 4:
In actions of tort, where gross fraud, malice, oppression, or wanton,
willful, or reckless conduct or criminal indifference to civil obligations
affecting the rights of others appear, or where legislative enactment
authorizes it, the jury may assess exemplary, punitive, or vindictive
damages; these terms being synonymous.
Although there are tempting shorthand phrases to characterize the type of conduct
which warrants punitive damage consideration, for example, "conscious indifference,"
Glasscock v. Armstrong Cork Co., 946 F.2d 1085, 1093 (5th Cir.1991), reh'g denied, 951 F.2d 347, cert. denied Celotex Corp. v. Glasscock, 503 U.S. 1011, 112 S. Ct. 1778, 118 L. Ed. 2d 435 (1992); "reckless, willful and wanton," Defender Industries, Inc. v.
Northwestern Mutual Life Ins. Co., 938 F.2d 502, 505 (4th Cir.1991); "particularly
egregious" Eichenseer v. Reserve Life Ins. Co., 934 F.2d 1377, 1382 (5th Cir.1991), we
are still committed to the traditional rule announced in Mayer and cited with approval in a
number of subsequent cases. See Syllabus Point 1, Goodwin v. Thomas, 184 W.Va. 611,
403 S.E.2d 13 (1991); Syllabus Point 1, Wells v. Smith, 171 W.Va. 97, 297 S.E.2d 872
(1982), overruled, in part, on other grounds by Syllabus Point 1, Garnes v. Fleming
Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991). See also Davis v. Celotex Corp.,
187 W.Va. 566, 420 S.E.2d 557 (1992); Syllabus Point 9, Cook v. Heck's Inc., 176 W.Va.
368, 342 S.E.2d 453 (1986); Syllabus Point 1, Painter v. Raines Lincoln Mercury, Inc., 174
W.Va. 115, 323 S.E.2d 596 (1984); Bond v. City of Huntington, 166 W.Va. 581, 591 n. 8,
276 S.E.2d 539, 545 n. 8 (1981); Syllabus Point 3, Stevens v. Friedman, 58 W.Va. 78, 51 S.E. 132 (1905).
Do the facts and inferences in this case point so strongly and overwhelmingly in
favor of the Bank to the extent that it did not act so maliciously, oppressively, wantonly,
willfully, recklessly, or with criminal indifference to civil obligations that no reasonable jury
could have reached a verdict against the Bank on the issue of punitive damages?
We are convinced after reviewing this entire record that the facts and inferences
do not point so strongly and overwhelmingly in favor of the Bank to the extent that no
reasonable jury could have reached a verdict against the Bank. After scrutinizing the proof
and inferences derivable therefrom in the light most hospitable to Mr. Alkire, we are
convinced that the evidence of the Bank's misconduct both before and after the recovery
of the missing deposit was such that a reasonable trier of fact could have easily reached
a decision which punishes the Bank and returns a punitive damage award in favor of Mr.
Alkire.
This record is replete with evidence to the extent that for some inexplicable reason
the Bank was determined not to do all that it could have reasonably done to prevent the
disintegration of Mr. Alkire's good name and reputation in the community of Parsons. Mr.
Alkire was branded in this small Tucker County community as a thief. The Bank had the
opportunity to remove the cloud of suspicion, but it exercised a meaningful choice to
misrepresent the status of the search for the missing deposit, and thereafter concealed its
recovery which could have immediately restored Mr. Alkire's good reputation in the
community.(9)
We learn from reviewing this transcript that the jury heard testimony of a deliberate
decision by the Bank to misinform the Alkire family after they repeatedly requested that
representatives of the manufacturer of the night depository (Mosler) be retained to
determine if the missing deposit was lost within the system and for some mechanical
reason could not be found. The jury was told that the Alkire family was willing to pay for
this type of investigation. The Bank informed the Alkires that such an investigation had
been completed and produced no results. The Bank was not telling the truth.
Further, the jury was told that once the deposit was recovered, the Bank chose not
to inform Mr. Alkire of the discovery, and but for an anonymous telephone call to the Alkire
family, there was a reasonable likelihood that the recovery of the missing deposit never
would have been made public, thus permanently condemning Mr. Alkire for an act of which
he was completely innocent.
When we analyze the evidence of the Bank's conduct in a light most favorable to
Mr. Alkire, we determine that a reasonable fact finder could have reached the conclusion
that Mr. Alkire was entitled to a judgment of punitive damages.
V.
DEVELOPMENT ON REMAND
We have determined that Mr. Alkire was entitled to a punitive damage award.
The unresolved question is whether Mr. Alkire is entitled to the punitive damage verdict
returned by the jury in the amount of $1,050,000.
As we noted, Mr. Alkire invites this court to perform a de novo review of all of the
Garnes factors and thereafter to reinstate the entire punitive damage award of $1,050,000.
We decline that invitation since under our punitive damage jurisprudence, it is imperative
that the amount of the punitive damage award be reviewed in the first instance by the trial
court by applying the model specified in Syllabus Points 3 and 4 of Garnes v. Fleming
Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991), and Syllabus Point 15 of TXO
Production Corp. v. Alliance Resources Corp., 187 W.Va. 457, 419 S.E.2d 870 (1992),
aff'd, 509 U.S. 443, 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993).(10) Thereafter, and upon petition, this Court will review the amount of the punitive damage
award, applying the standard specified in Syllabus Point 5 of Garnes.(11)
Because the trial court, for reasons we have discussed, did not submit the punitive
damage award to a Garnes analysis to determine whether or not it was excessive, such
an analysis must now be done upon remand.
We would inform the trial court that this analysis should be conducted exclusively
within the boundaries of Syllabus Points 3 and 4 of Garnes, and Syllabus Point 15 of
TXO.(12) We believe that it is appropriate at this time to remove from the lexicon of
reviewing the amount of a punitive damage award the terms "really mean" and "really
stupid," as they were applied in TXO.(13)
We should emphasize that our punitive damage jurisprudence includes a two-step
paradigm: first, a determination of whether the conduct of an actor toward another person
entitles that person to a punitive damage award, see Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58 (1895); second, if a punitive damage award is justified, then a review is mandated
by Garnes to determine if the punitive damage award is excessive.
VI.
CONCLUSION
The evidence on the issue of punitive damages is shown to be legally sufficient
to sustain a verdict of punitive damages in favor of Mr. Alkire. This case is remanded
to the Circuit Court of Tucker County to perform an analysis upon the punitive damage
verdict to determine whether the award of $1,050,000 is excessive as tested by
Syllabus Points 3 and 4 of Garnes and Syllabus Point 15 of TXO.
Reversed and remanded
with directions.
1. --
2. W. Va. R.Crim.P. 6(f) provides:
An indictment may be found only upon the concurrence of 12 or
more jurors. The indictment shall be returned by the grand jury to
a circuit judge in open court. If a complaint is pending against the
defendant and 12 jurors do not concur in finding an indictment, the
foreperson shall so report to the circuit judge in writing forthwith.
3. W. Va. R. Civ. P. 14(a) provides, in pertinent part:
At any time after commencement of the action a defending
party, as a third-party plaintiff, may cause a summons and
complaint to be served upon a person not a party to the
action who is or may be liable to him for all or part of the
plaintiff's claim against him.
4.
5. W. Va. R. Civ. P. 59(a) provides:
A new trial may be granted to all or any of the parties and on
all or part of the issues (1) in an action in which there has
been a trial by jury, for any of the reasons for which new
trials have heretofore been granted in actions at law; and
(2) in an action tried without a jury, for any of the reasons for
which rehearings have heretofore been granted in suits in
equity. On a motion for a new trial in an action tried without
a jury, the court may open the judgment if one has been
entered, take additional testimony, amend findings of fact
and conclusions of law or make new findings and
conclusions, and direct the entry of a new judgment.
6. All post-trial motions were to be considered in the alternative. The motion for a
remittitur is technically a motion to alter or amend judgment pursuant to W. Va. R. Civ.
P. 59(e), which provides:
A motion to alter or amend the judgment shall be served not
later than 10 days after entry of the judgment.
7. The trial court's comments regarding the various post-trial motions are revealing
of its true intention as follows: "I have to give a judgment notwithstanding the verdict of
the jury or I guess I have to remit this and the remittitur would be zero." As the written
order states, "to the extent that the defendant's motion is for judgment notwithstanding
the verdict as to the issue of punitive damages and seeks thereby to strike the jury's
award of punitive damages, the motion is hereby GRANTED, and the punitive damages
award is ORDERED stricken."
8. Although the issue we decide today was not precisely presented to us by the
appellant, and while we would ordinarily not take note of errors not called to our
attention, we have the plenary power--indeed, the duty--to notice errors to which no
exception has been taken, if the error is obvious from the record or appellate briefs,
and if it would otherwise seriously affect the fairness, integrity, or public reputation of
judicial proceedings, or otherwise result in a misleading application of the law. United
States v. Atkinson, 297 U.S. 157, 160, 56 S. Ct. 391, 392, 80 L. Ed. 555 (1936); Silber v.
United States, 370 U.S. 717, 718, 82 S. Ct. 1287, 1288, 8 L. Ed. 2d 798 (1962) (per
curiam); see also New York Cent. R.R. Co. v. Johnson, 279 U.S. 310, 318-19, 49 S. Ct. 300, 303-04, 73 L. Ed. 706, as amended by, --- U.S ----, 49 S. Ct. 417, --- L.Ed.2d ----
(1929) ("[F]ailure of counsel to particularize an exception will not preclude this Court
from correcting the error."); Mitchell v. Hadl, 816 S.W.2d 183, 185 (Ky.1991) ("When
the facts reveal a fundamental basis for decision not presented by the parties, it is our
duty to address the issue to avoid a misleading application of the law.").
9. The conduct of the Bank brings to mind:
Who steals my purse steals trash; 'tis something, nothing;
But he that filches from me my good name Robs me of that which not enriches him,
And makes me poor indeed.
William Shakespeare, Othello act 3, sc. 3.
10. Syllabus Point 3 of Garnes instructs circuit courts how to instruct juries in
determining the amount of punitive damages to award, and Syllabus Point 4 instructs
circuit courts how to review the propriety of the amount of the punitive damages
awarded by a jury:
3. When the trial court instructs the jury on punitive
damages, the court should, at a minimum, carefully explain
the factors to be considered in awarding punitive damages.
These factors are as follows:
(1) Punitive damages should bear a reasonable relationship to the
harm that is likely to occur from the defendant's conduct as well as
to the harm that actually has occurred. If the defendant's actions
caused or would likely cause in a similar situation only slight harm,
the damages should be relatively small. If the harm is grievous,
the damages should be greater.
(2) The jury may consider (although the court need not specifically
instruct on each element if doing so would be unfairly prejudicial to
the defendant), the reprehensibility of the defendant's conduct.
The jury should take into account how long the defendant
continued in his actions, whether he was aware his actions were
causing or were likely to cause harm, whether he attempted to
conceal or cover up his actions or the harm caused by them,
whether/how often the defendant engaged in similar conduct in the
past, and whether the defendant made reasonable efforts to make
amends by offering a fair and prompt settlement for the actual harm
caused once his liability became clear to him.
(3) If the defendant profited from his wrongful conduct, the punitive
damages should remove the profit and should be in excess of the
profit, so that the award discourages future bad acts by the
defendant.
(4) As a matter of fundamental fairness, punitive damages should
bear a reasonable relationship to compensatory damages.
(5) The financial position of the defendant is relevant.
4. When the trial court reviews an award of punitive damages, the
court should, at a minimum, consider the factors given to the jury
as well as the following additional factors:
(1) The costs of the litigation;
(2) Any criminal sanctions imposed on the defendant for his
conduct;
(3) Any other civil actions against the same defendant, based on
the same conduct; and
(4) The appropriateness of punitive damages to encourage fair and
reasonable settlements when a clear wrong has been committed.
A factor that may justify punitive damages is the cost of litigation to
the plaintiff.
Because not all relevant information is available to the jury, it is
likely that in some cases the jury will make an award that is
reasonable on the facts as the jury know them, but that will require
downward adjustment by the trial court through remittitur because
of factors that would be prejudicial to the defendant if admitted at
trial, such as criminal sanctions imposed or similar lawsuits
pending elsewhere against the defendant. However, at the option
of the defendant, or in the sound discretion of the trial court, any of
the above factors may also be presented to the jury.
Syllabus Points 3 & 4, Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991).
11. Syllabus Point 5 of Garnes provides:
5. Upon petition, this Court will review all punitive damages
awards. In our review of the petition, we will consider the same
factors that we require the jury and trial judge to consider, and all
petitions must address each and every factor set forth in Syllabus
Points 3 and 4 of this case with particularity, summarizing the
evidence presented to the jury on the subject or to the trial court at
the post-judgment review stage. Assignments of error related to a
factor not specifically addressed in the petition will be deemed
waived as a matter of state law.
Syllabus Point 5, Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991).
12. Syllabus Point 15, TXO Production Corp. v. Alliance Resources Corp., 187
W.Va. 457, 419 S.E.2d 870 (1992), provides as follows:
The outer limit of the ratio of punitive damages to
compensatory damages in cases in which the defendant has
acted with extreme negligence or wanton disregard but with
no actual intention to cause harm and in which
compensatory damages are neither negligible nor very large
is roughly 5 to 1. However, when the defendant has acted
with actual evil intention, much higher ratios are not per se
unconstitutional.
13. A "really mean" and "really stupid" analogy was suggested in the majority
opinion in TXO to assist the trial court in determining whether the ratio of compensatory
to punitive damages was proper. This analysis was not embodied within any syllabus
point of the opinion. Indeed, the United States Supreme Court, in affirming TXO,
noted that the terms "really mean" and "really stupid" "played little, if any, part in [the
West Virginia Supreme Court's] actual evaluation of the propriety of the damages
award [as evidenced] from the reasoning in its thorough opinion." TXO Production
Corp. v. Alliance Resources Corp., 509 U.S. 443, 465, 113 S. Ct. 2711, 2724, 125 L. Ed. 2d 366 (1993), aff'g 187 W.Va. 457, 419 S.E.2d 870 (1992).
We believe the dichotomy of "really mean" and "really stupid" can cause more
mischief than benefit to the cause of analyzing the ratio of a compensatory to a punitive
damage award. Part of the mischief is created when the "really mean" and "really
stupid" standard bleeds into the analysis of whether the conduct of an actor justifies
any punitive damage award in the first instance. In addition, Syllabus Point 15 in TXO
does provide a useful barometer in calculating the ratio between compensatory and
punitive damage, and while that analysis is more prosaic, it is infinitely more functional.
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