Gause v. Smithers

742 S.E.2d 644, 403 S.C. 140, 2013 WL 2422897, 2013 S.C. LEXIS 125

• Court: Supreme Court of South Carolina
• Decided: June 5, 2013
• Docket: Appellate Case No. 2011-183646; No. 27261
• Status: Published

Opinions

Justice HEARN.

Edward William Hunt (Father) appeals a jury verdict in favor of Don Gause finding him liable under the family purpose .doctrine for damages caused by the negligence of Edward Raymond Hunt (Son). Father argues he cannot be found liable under the family purpose doctrine; Son’s actions were not a proximate cause of Gause’s injuries; he should be granted a new trial due to prejudicial statements and a defective verdict form; and the punitive damages award should be overturned as impermissible under the family purpose doctrine. We affirm in part and reverse in part.

FACTUAL/PROCEDURAL BACKGROUND

Gause, a police officer for the City of Conway, was on duty when he responded to a call from a highway patrolman who had pulled over a Firebird driven by Son on suspicion of drunk driving. Instead of pulling off the highway into the emergency lane, Son stopped in the left lane of traffic on the four lane highway, and the patrolman stopped behind him with his lights flashing. When Gause arrived, he parked behind the patrolman, who subsequently left the scene, and also activated his blue lights. A second policeman also responded and eventually took Son into custody, leaving only Gause and the abandoned vehicle. Gause was filling out paperwork in his car and waiting for the tow truck to move the Firebird when a pickup truck driven by Nathan Smithers rear-ended him, propelling his cruiser into the Firebird.

Gause sued Smithers and Father — assuming he was the driver of the Firebird because it was registered in his name— for his injuries. Father moved to dismiss on the basis that Son, and not he, had been driving the Firebird that night. Realizing the mistake, Gause filed an amended complaint substituting Son as the defendant for the negligence claim and changing the claims against Father to negligent entrustment and liability under the family purpose doctrine. Son moved to be dismissed as a party because the amendment occurred after the statute of limitations had run, and the circuit court granted the motion, holding the amended complaint did not relate back under Rule 15(c), SCRCP. Gause appealed the grant of Son’s motion to be dismissed, and the court of appeals affirmed in Gause v. Smithers, 384 S.C. 130, 681 S.E.2d 607 (Ct.App.2009).

Father then moved for summary judgment on the grounds the case could not proceed under the theory of the family purpose doctrine because Son had been dismissed and additionally, Son did not proximately cause Gause’s injuries. The circuit court denied the motion and the case proceeded to a jury trial on the issue of Father’s liability under the family purpose doctrine.¹

At trial, Father acknowledged he owned the Firebird at the time of the accident, but testified he had transferred title to Son shortly before trial. He noted that prior to the accident he had performed some maintenance on the car, but stated that Son took over most of the maintenance after Father decided to sell it to him. According to Father, Son made a payment of $200 prior to the accident, but Father used that money to bail Son out of jail after the wreck. He testified Son lived with him, although he clarified that Son actually resided in a “broken-down motor home” next to his house, with electricity provided by an extension cord running from Father’s house.

Son testified that at the time of the accident he was twenty-five and lived with his parents. He could not remember whether he was employed then. He stated on the night of the accident he patronized a strip club in Myrtle Beach for four hours and then slept in his car for about an hour before attempting to drive home. He testified he was pulled over because the patrolman observed him weaving between the lanes, and he was taken to the detention center after he was stopped. Son further acknowledged he should have pulled off the road and was not sure why he stopped his car in a lane of travel.

Over Father’s objections, the court submitted the issue of Father’s liability under the family purpose doctrine to the jury. During deliberations, the jury asked the circuit court to clarify the identity of the defendants in the case, and the court brought the jury back in and stated that the father was the defendant, not the son. The jury returned a verdict for Gause, awarding actual damages of $155,432.64 and punitive damages of $60,000 against Smithers and $40,000 against Father. However, when the verdict was read, the parties realized that Son had been listed as a defendant in the caption. The court then sought to have the jurors consider a corrected verdict form, but the bailiff had already dismissed them and the court was unable to call them all back. The court, however, refused to grant a new trial, reasoning that the jury had not been confused and that any prior confusion was clarified by its previous instructions. This appeal followed.

ISSUES ON APPEAL

I. Did the circuit court err in failing to dismiss the case against Father when Son was no longer a party to the action?

II. Did the circuit court err in failing to direct a verdict in favor of Father?

III. Did the circuit court err in denying Father’s motions for a new trial based on the defective verdict form and prejudicial statements made by Gause and his attorney in regards to Son’s intoxication at the time of the incident?

IV. Did the circuit court err in allowing punitive damages to be assessed against Father when his liability was predicated on the family purpose doctrine?

LAW/ANALYSIS

I. FAILURE TO DISMISS

Father argues the circuit court erred in refusing to dismiss the case against him after Son was dismissed from the lawsuit because under the family purpose doctrine, Father’s liability was indivisible from Son’s. We disagree.

The family purpose doctrine, which arises from the law of agency, is derived from the notion that one “who has made it his business to furnish a car for the use of his family is liable as principal or master when such business is being carried out by a family member using the vehicle for its intended purpose, the family member thereby filling the role of agent or servant.” Campbell v. Paschal, 290 S.C. 1, 8, 347 S.E.2d 892, 897 (Ct.App.1986) (internal citation omitted). To impose liability under the family purpose doctrine the plaintiff must prove the defendant is the head of the family and owns, maintains, or furnishes the automobile. Reid v. Swindler, 249 S.C. 483, 496, 154 S.E.2d 910, 916 (1967). Whether the family purpose doctrine applies is ordinarily a question of fact for the jury, but where no factual issue is created, the question becomes one of law, properly decided by the circuit court. Evans v. Stewart, 370 S.C. 522, 527, 636 S.E.2d 632, 635 (Ct.App.2006).

Father relies on Jordan v. Payton, 305 S.C. 537, 409 S.E.2d 793 (Ct.App.1991), for the proposition that his liability is indivisible from Son’s liability In Jordan, the plaintiff was injured when a minor lost control of his vehicle and struck her house, and she sued the minor and his legal guardian based on the family purpose doctrine. Id. at 538, 409 S.E.2d at 793. Neither party filed an answer, and the plaintiff was granted a default judgment against both the minor and the guardian. Id. The court of appeals reversed the judgment against the minor pursuant to Rule 55, SCRCP, because a guardian ad litem had not been appointed for him. Id. The court also reversed the judgment against the legal guardian, noting that “the liability of [the guardian] depends upon the liability of the child. Therefore, the judgment must be valid against both or it is valid against neither.” Id. at 539, 409 S.E.2d at 794.

We find this case distinguishable. Although we agree the liability of Father hinges on the liability of Son, here, there has been no previous determination as to Son’s liability. In Jordan, the court of appeals noted, “Under the express language of [Rule 55, SCRCP], the default judgment entered against the child is void for all purposes, liability as well as damages.” Id. (emphasis added). Thus, by voiding the judgment, there was no longer a judgment that the minor was liable. Because the liability of the guardian rested on the negligence of the minor, there could be no judgment against the guardian if the minor had not been found negligent. Here, however, Son’s dismissal from the action was not grounded on a finding of no liability. Son was offered as a witness at trial and the jury was instructed that it had to consider both his personal liability as well as whether Father should be found liable under the family purpose doctrine. Son did not need to be a party to the action to allow the jury to make these determinations. We therefore find Father can be held liable even though Son was dismissed from the action.²

Moreover, allowing the case to proceed against Father alone is consistent with the theories of agency from which the family purpose doctrine developed. Under the doctrine of respondeat superior, an injured party can elect to sue both the principal and the agent, but is not required to sue the agent to recover from the principal. Austin v. Specialty Transp. Servs., Inc., 358 S.C. 298, 319, 594 S.E.2d 867, 878 (Ct.App. 2004). Furthermore, “[t]he rationale of the family purpose doctrine is that it serves to place financial responsibility upon the head of the family who is more likely to respond in damages when the family vehicle is used negligently by a person without sufficient assets of his own.” Lollar v. Dewitt, 255 S.C. 452, 456, 179 S.E.2d 607, 608 (1971). Thus, the reason for proceeding under the family purpose doctrine is to allow recovery from the more solvent parent, and requiring that the child be sued as well is unnecessary to accomplish that end.

II. DIRECTED VERDICT AND JUDGMENT NOTWITHSTANDING THE VERDICT

Father argues the circuit court erred in refusing to direct a verdict in his favor because the facts did not support application of the family purpose doctrine and Son’s actions did not proximately cause Gause’s injuries. We disagree.

“A motion for JNOV may be granted only if no reasonable jury could have reached the challenged verdict.” Welch v. Epstein, 342 S.C. 279, 300, 536 S.E.2d 408, 419 (Ct.App.2000). On appeal from a circuit court’s denial of a motion for a directed verdict or a JNOV, we apply the same standard as the circuit court by viewing the evidence and all reasonable inferences in the light most favorable to the non-moving party. RFT Mgmt. Co., L.L.C. v. Tinsley & Adams L.L.P., 399 S.C. 322, 331-32, 732 S.E.2d 166, 171 (2012). We will not reverse the circuit court’s ruling on a JNOV motion unless there is no evidence to support the ruling or where the ruling is controlled by an error of law. Law v. S.C. Dept. of Corr., 368 S.C. 424, 434-35, 629 S.E.2d 642, 648 (2006).

A. Applicability of the Family Purpose Doctrine

Father argues the circuit court erred in allowing the jury to consider his liability under the family purpose doctrine because Gause presented no evidence to establish liability under that theory. Examining the evidence in the light most favorable to Gause, we find the court properly submitted the issue to the jury.

Gause presented evidence that Father was the head of the household and owned, maintained, or provided the Firebird for Son’s use. At trial, both Father and Son admitted that Son was living with his parents at the time of the accident. Although Son lived in a broken-down motor home adjacent to Father’s home, it was on the same property and Son received electricity from Father’s home. Father also stated the Fire-bird was titled in his name, he paid the property taxes on it, he had a set of keys, and he could have taken the car away from Son if he wanted. Additionally, he acknowledged the Firebird was used by Son for his convenience and general use because he and his wife were tired of having to drive Son around. Accordingly, we find sufficient evidence existed to submit this issue to the jury.

B. Proximate Cause

Father additionally alleges the circuit court erred in submitting the issue of his liability to the jury because Son’s actions did not proximately cause Gause’s injury.

“Proximate cause is normally a question of fact for determination by the jury, and may be proved by direct or circumstantial evidence.” Player v. Thompson, 259 S.C. 600, 606, 193 S.E.2d 531, 533 (1972). The touchstone of proximate cause is foreseeability which is determined by looking to the natural and probable consequences of the defendant’s conduct. J.T. Baggerly v. CSX Transp., Inc., 370 S.C. 362, 369, 635 S.E.2d 97, 101 (2006). Plaintiff need not prove the defendant’s negligence was the sole proximate cause of the injury. Id. “To exculpate a negligent defendant, the intervening cause must be one which breaks the sequence or causal connection between the defendant’s negligence and the injury alleged.” Matthews v. Porter, 239 S.C. 620, 628, 124 S.E.2d 321, 325 (1962). “Only in rare or exceptional cases may the issue of proximate cause be decided as a matter of law.” Bailey v. Segars, 346 S.C. 359, 367, 550 S.E.2d 910, 914 (Ct.App.2001).

Son negligently stopped his vehicle in the left lane of traffic instead of pulling off the road into the emergency lane. “The danger of leaving a vehicle standing on the traveled portion of a highway is well known.” Jeffers v. Hardeman, 231 S.C. 578, 583, 99 S.E.2d 402, 404 (1957). It was reasonably foreseeable that by remaining in a lane of traffic, another car could crash into the back of the police cruiser that pulled him over. We therefore disagree with Son that Smithers’ actions broke the chain of causation and find sufficient evidence was presented for a jury to conclude Son’s negligence was a proximate cause of Gause’s injuries.

III. MOTIONS FOR A NEW TRIAL

Father contends the circuit court erred in refusing to grant his motions for a new trial based on the defective verdict form and on prejudicial statements made in regards to Son’s intoxication at the time of the incident.

A. Verdict Form

Father argues the circuit court erred in not granting a new trial because the verdict form was unclear as to who was the actual defendant in the case. We find this issue is not preserved. Father contends the verdict form was ambiguous because it allowed the jury to find “against Defendant Hunt,” but erroneously included Son’s name as well as Father within the caption. However, Father did not object to the caption form until after the verdict had been read. See Johnson, 317 S.C. at 421, 453 S.E.2d at 912 (holding that by failing to object to a verdict form until after the verdict had been reached, a party failed to preserve any issue relating to the verdict form).

B. Admission of Improper Testimony

Father additionally argues the circuit court erred in failing to grant a new trial based on references to Son’s drinking after the circuit court had ruled that evidence of Son’s intoxication was inadmissible. However, Father did not move for a mistrial, nor did he object to the curative instructions given to the jury after his objections, and he is therefore precluded from making those arguments before this Court. Accordingly, this issue also is not preserved. See Elam v. S.C. Dept. of Transp., 361 S.C. 9, 23, 602 S.E.2d 772, 780 (2004) (“It is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review.”).

IV. PUNITIVE DAMAGES

Father finally argues the circuit court erred in allowing punitive damages to be assessed against him under the family purpose doctrine. We agree.

This is a question of first impression in this State. Only a limited number of jurisdictions have adopted the family purpose doctrine.³ See Jacobson v. Superior Court, 154 Ariz. 430, 743 P.2d 410, 414 n. 1 (Ct.App.1987) (noting that only Arizona, Colorado, Connecticut, Georgia, Kentucky, Nebraska, New Mexico, North Carolina, North Dakota, Oregon, South Carolina, Tennessee, Washington, and West Virginia have adopted the family purpose doctrine). Of those states, only two have addressed whether punitive damages should be allowed and both have answered that question in the negative.

In Byrne v. Bordeaux, 85 N.C.App. 262, 354 S.E.2d 277 (1987), the North Carolina Court of Appeals concluded without much discussion that punitive damages should not be allowed in this context by noting simply that although the family purpose doctrine may be well established within that state, it is not without its limits. Id. at 279. In acknowledging the boundaries of the doctrine, it cited to Grindstaff v. Watts, 254 N.C. 568, 119 S.E.2d 784 (1961), where the court had previously discussed the doctrine’s tenuous validity by stating, “The doctrine undoubtedly involves a novel application of the rule of respondeat superior and may, perhaps, be regarded as straining that rule unduly. It is a deviation from the ordinary principles of respondeat superior and has been severely criticized in some quarters.” Id. at 787 (internal citations omitted).

The Court of Appeals of Arizona offered a more detailed analysis regarding its rejection of punitive damages under the doctrine in Jacobsen. It noted that although the family purpose doctrine “reli[ed] on agency principles for its credibility, its social usefulness is its primary justification.” Jacobson, 743 P.2d at 411. Additionally, it acknowledged that in Arizona the concept of punitive damages was based on a finding that the wrongful acts were “guided by evil motives” and was designed to punish the wrongdoer as well as deter him and others from similar conduct. Id. at 411-12. Although Arizona allows punitive damages against a principal for the torts of an agent, the court reasoned the factual distinctions between agency and the family purpose doctrine militated against allowing punitive damages in cases based on the family purpose doctrine. Id. at 412. A principal derives economic benefits from the acts of the agent and has more leeway in defining the bounds of employment than a head of household may have when merely providing a vehicle for the convenience of the family. Id. Because punitive damages are designed to punish the actual tortfeasor, any imputation to another party should be limited. Id. Thus, the court concluded that allowing punitive damages under the family purpose doctrine did not serve the objective of punishing the wrongdoer and it found no reason to make an exception simply because the doctrine is nominally based on agency. Id. at 413.

We agree with these courts’ reasoning that the family purpose doctrine’s reliance on agency principles is somewhat of a legal fiction which cannot logically be extended to allow recovery of punitive damages. The parallel between a parental relationship and an employment relationship can only be stretched so far. A principal can dictate the parameters of the use of a vehicle more narrowly than a parent who merely allows his child to use a car for the convenience of the family. Moreover, because a principal stands to gain financially from the actions of an agent, it makes more sense to allow additional monetary damages in the form of punitive damages against a principal.

Gause also argues that punitive damages should be allowed because they serve to vindicate the private rights of the injured party and are not solely for punishment of the tortfeasor, citing to our recent decision in O’Neill v. Smith, 388 S.C. 246, 695 S.E.2d 531 (2010). We agree that punitive damages serve multiple purposes; however, we find O’Neill distinguishable. In that case, we answered a specific certified question regarding whether plaintiffs could pursue punitive damages against their own underinsured motorist insurance company where they had signed a covenant not to execute after settling with defendant’s liability company. Id. at 248, 695 S.E.2d at 532. There, the insurance company was attempting to escape liability and avoid vindicating the rights of its own insured. We view that situation as being decidedly different than a parent providing a vehicle to a grown but dependent child to drive. The family purpose doctrine itself is a mechanism to allow the vindication of the rights of an injured party by imputing liability onto the likely more solvent parents. However, we decline to be the first state to expand that doctrine to encompass an award of punitive damages against the parent.

CONCLUSION

Based on the foregoing, we reverse the award of punitive damages and affirm the circuit court on the remaining issues.

PLEICONES and BEATTY, JJ., concur. TOAL, C.J., and KITTREDGE, J., dissenting in separate opinions.

1 . Gause apparently abandoned the issue of negligent entrustment at summary judgment.

2 . This holding is further supported by case law from other jurisdictions that have considered this issue. Jordan cites to Medlin v. Church, 157 Ga.App. 876, 278 S.E.2d 747 (1981), which reversed a verdict against a father under the family purpose doctrine because the verdict against his son was void for improper service. However, Medlin specifically noted that “Under Georgia law where the head of the family is sought to be held liable for some wrong committed by a member of his family within the scope of the family purpose doctrine, that member of the family need not necessarily be joined as a party defendant.” Id. at 748 n. 1. Additionally, the United States Court of Appeals for the Sixth Circuit has noted that under Kentucky’ application of the family purpose doctrine, the primary tortfeasor doctrine is not an essential party to a lawsuit. Ray v. Porter, 464 F.2d 452, 455 (6th Cir.1972).

3 . Although the family purpose remains viable in this State and its validity has not been challenged here, we recognize it has been widely criticized as an outmoded judicial construct. See F.P. Hubbard & R.L. Felix, The South Carolina Law of Torts 747 (4th ed.2011) ("Most jurisdictions have rejected the family purpose doctrine largely on the grounds that it is a fiction developed to address motor vehicle accidents and that it is not necessary with insurance generally available under today's owner consent statutes.”); R.E. Barber, Comment note, Modern Status of Family Purpose Doctrine with Respect to Motor Vehicles, 8 A.L.R.3d 1191 (1966) (noting that courts rejecting the theory have both attacked its theoretical basis in the law of agency and considered that any policy justifications for it could be better satisfied in some other manner, such as legislation); see also 6 Blashfield Automobile Law & Practice § 257 (4th ed.2011) ("At best, the family purpose doctrine is an anomaly in the law.”).