Anderson v. Latham Trucking Co.

728 S.W.2d 752, 55 U.S.L.W. 2616, 1987 Tenn. LEXIS 1005

• Court: Tennessee Supreme Court
• Decided: April 13, 1987
• Status: Published

Opinions

OPINION

FONES, Justice.

We limited the grant of plaintiff’s Rule Eleven application to the issue of whether evidence of a defendant’s financial condition is necessary or essential to sustain an award of punitive damages.

On 27 November 1983, plaintiff was preparing to move her disabled vehicle from the shoulder of Highway 27 in Scott County, Tennessee. Although plaintiff’s automobile was completely outside the white line demarking the outer edge of the highway, a tractor-trailer, which was passing another vehicle, struck plaintiff’s car. Plaintiff suffered personal injuries and incurred $3500 in medical expenses. The tractor-trailer that hit plaintiff’s car did not stop.

The jury rendered a verdict in favor of plaintiff for $100,000 in compensatory damages, $75,000 in punitive damages, and $825 for her demolished vehicle. The trial judge suggested a remittitur of the compensatory damages to $20,000 and the punitive damages to $7,500; the property damage judgment was not altered. Plaintiff accepted the suggested remittiturs under protest and appealed.

The Court of Appeals affirmed the trial judge’s grant of remittiturs of compensatory and punitive damages. With respect to compensatory damages the intermediate court pointed to evidence upon which the trial judge could have concluded that plaintiff had grossly exaggerated her injuries. The reason given by the Court of Appeals for its approval of the reduction in punitive damages was that there was no evidence in the record of the financial condition of defendant Latham Trucking Company; and citing Breault v. Friedli, 610 S.W.2d 134 (Tenn.App.1980), it held that “in the absence of such proof a substantial judgment for punitive damages may not be sustained.”

Breault was a Rule Nine discretionary appeal wherein the principal issue was whether plaintiff could compel pre-trial discovery of defendant’s financial condition on the basis that the complaint alleged a cause of action for punitive damages. As background for consideration of that issue, the Court of Appeals said:

Evidence concerning the financial condition of the defendant is essential in determining the amount of punitive damages.

610 S.W.2d at 136.

In Coppinger Color Lab, Inc. v. Nixon, 698 S.W.2d 72 (Tenn.1985), that identical sentence appears as part of a quote from 9 Tenn.Jur. Damages § 34, pp. 68, 69. That quote was followed by the statement that the evidence merely indicated that Nixon was a man of considerable wealth but that his net worth was not clearly shown.

It has been the rule in this State since before the turn of the century that evidence of the financial status of a defendant, or the defendants, is one of the factors that may be considered in assessing punitive damages. Cumberland Telephone & Telegraph Co. v. Shaw, 102 Tenn. 313, 52 S.W. 163 (1899); Herstein v. Kemker, 19 Tenn.App. 681, 94 S.W.2d 76 (1936); Suzore v. Rutherford, 35 Tenn.App. 678, 251 S.W.2d 129 (1952); Odom v. Gray, 508 S.W.2d 526 (Tenn.1974).

In Odom v. Gray, supra, there were six defendants in the trial court and evidence of the financial condition of only one defendant was adduced. On appeal, the defendants insisted that a joint judgment against all defendants could not stand because the financial status of only one defendant had been shown. This Court adopted the rule that a joint judgment for punitive damages against two or more defendants is permissible even though the financial condition of all defendants was not proven. 508 S.W.2d at 534. It would obviously be inconsistent with that rule to have a mandatory requirement that, in the case of a single defendant, it would be necessary that plaintiff prove the financial condition of defendant to sustain an award of punitive damages. Parenthetically, we are unable to find any authority for a difference in the rule where the punitive damages are “substantial.”

It has never been the intention of this Court to depart or deviate from the principles that the rule, adopted in Odom dictates. Thus, the plaintiff or the defendant, or defendants, may offer proof of the financial condition of a defendant, or any one or all of multiple defendants; but it is not essential or mandatory that the record contain any such evidence to sustain an award of punitive damages.

The Court of Appeals has examined the record and found evidence to justify the trial judge’s action in suggesting a very substantial remittitur of compensatory damages. The plaintiff had the opportunity to have a new trial rather than accept the suggested remittiturs under protest and appeal but chose the latter. We approve the Court of Appeals’ action in affirming the trial judge’s remittitur of compensatory damages. The trial judge’s re-mittitur of punitive damages was within a reasonable proportion of the reduction of the compensatory damages. Thus, we affirm the result reached by the Court of Appeals, although disagreeing with the reasons for its approval of the trial judge’s reduction of punitive damages.

Affirmed and remanded to the trial court for enforcement of the judgment.

BROCK, C.J., HARBISON, J., and LADD, Special Justice, concur. DROWOTA, J., dissents.