Judgment rendered April 10, 2024. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.
No. 55,599-CA No. 55,600-CA (Consolidated Cases)
COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA
*****
MONICA D. DURAN Plaintiff-Appellee
versus
ALLMERICA FINANCIAL Defendants-Appellants BENEFIT INSURANCE COMPANY, THE MER ROUGE STATE BANK, LOUISIANA FARM BUREAU MUTUAL INSURANCE COMPANY AND GERALD FARRAR
Appealed from the Fourth Judicial District Court for the Parish of Morehouse, Louisiana Trial Court No. 2017-314
Honorable Alvin R. Sharp, Judge
PHELPS DUNBAR, LLP Counsel for Appellant, By: Kim M. Boyle Gerald Farrar Jeremy T. Grabill
LAW OFFICES OF MASON L. OSWALT By: Mason L. Oswalt
LUNN IRION LAW FIRM, LLC By: Gerald M. Johnson, Jr. SEABAUGH & SEPULVADO, LLC Counsel for Appellant, By: Alan T. Seabaugh Allmerica Financial Michael C. Melerine Benefit Insurance Paul L. Wood Company
NELSON, ZENTNER, SARTOR & SNELLINGS By: David H. Nelson Fred W. Sartor, Jr.
THE DOWNS LAW FIRM APC Counsel for Appellee By: E. Ross Downs, Jr. E. Ross Downs, III Hayden S. Downs Emily W. Downs
Before STONE, THOMPSON, and HUNTER, JJ. THOMPSON, J.
Gerald Farrar’s blood alcohol content was four times the legal limit
when he hit the side rail of a bridge and the right front wheel of his vehicle
was torn off. The wheel came to rest in the roadway and caused a second
accident when a vehicle came upon it, struck it, and then slammed into a
guardrail, seriously injuring the driver. During the five-week trial that
followed, the jury was presented with information regarding Farrar’s history
of drinking and driving and his attempt to leave the scene of the accident in
his severely damaged vehicle. The evidence at trial also revealed that he
failed a field sobriety test and refused a breathalyzer. He consistently denied
consuming any or very much alcohol the night of the accident, until he was
finally confronted at trial with the evidence of his blood alcohol content
from a blood draw taken at the hospital the night of the accident. The jury
awarded the injured driver $843,155 in past, present, and future medical
expenses and damages for her injuries, and, finding Farrar’s wanton and
reckless conduct to be the cause of her injuries, imposed exemplary damages
against him in the amount of $3,000,000 (a ratio of approximately 3.56 to 1
to the jury award). Farrar now appeals the exemplary damage award,
arguing it is grossly excessive, in amount and as a ratio to the special and
general damages award, and, as such, constitutes a violation of the Due
Process Clause. Farrar asks this court to reduce or eliminate the exemplary
damage award. Finding Farrar’s conduct to be obscenely reprehensible and
considering the substantial damage award by the jury, we affirm the
exemplary damage assessment by the jury. FACTS AND PROCEDURAL HISTORY
On the evening of October 26, 2016, Monica Duran (“Duran”), was
driving on U.S. Highway 425 in Morehouse, Parish, Louisiana, when she
suddenly came upon a dislodged wheel laying in her lane of travel. Shortly
beforehand, that wheel had been torn from the vehicle driven by Gerald
Farrar (“Farrar”). U.S. 425 is a two-way roadway with a posted speed limit
of 55 miles per hour. Without adequate time to avoid the impact, her vehicle
hit the wheel and was forced into the guardrail, then bounced off it, and
came to rest. Duran was injured; her passenger was not.
Duran called 911 for assistance, and deputies from the Morehouse
Parish Sheriff’s Office and a Louisiana State Trooper responded to the scene
of the accident. Ambulances eventually transported both Duran and Farrar
to the emergency room of St. Francis Medical Center in Monroe, Louisiana.
Duran complained of low back pain and was treated for a concussion before
being discharged. She was subsequently treated over several months by Dr.
Allen Spires (a general practitioner), Dr. Elijah Globke (a chiropractor), and
Dr. David Weir (a neurologist) for her low back pain and neurological
symptoms. Farrar received treatment for a broken ankle, which required
surgery.
Prior to Duran encountering the wheel in the roadway, Farrar had
been driving ahead of and in the same direction as her, when he struck the
guardrail with such force that the entire front right wheel of his Chevrolet
Silverado was torn off. After making impact with the guardrail, Farrar
apparently attempted to continue traveling on the remaining three wheels
and eventually came to a rest approximately 800 feet farther up the road.
2 In July of 2017, Duran filed suit for her juries, naming Farrar, his
employer, Mer Rouge State Bank (“the Bank”), which owned the Chevrolet
Silverado Farrar was driving, and its liability insurer, Allmerica Financial
Benefit Insurance Company (“Allmerica”). Prior to trial, the Bank was
dismissed from the litigation when the trial court granted its motion for
summary judgment. In March of 2022, the matter proceeded to a five-week
jury trial. At the conclusion of the trial, the jury returned a verdict in favor
of Duran in the amount of $843,155, for the following itemized damages:
A) Past Medical Expenses $ 80,000
B) Future Medical Expenses $ 82,556
C) Past Lost Earnings $ 478
D) Future Loss of Earnings and/or Earning Capacity $230,121
E) Past Physical Pain and Suffering $ 50,000
F) Future Physical Pain and Suffering $250,000
G) Past Mental Suffering $ 25,000
H) Future Mental Suffering $ 50,000
I) Past Loss of Enjoyment of Life $ 50,000
J) Future loss of Enjoyment of Life $ 25,000
TOTAL $843,155
The defendants have not appealed the reasonableness of the above
awards. What is in dispute, however, is the award by the jury of added
exemplary damages in the amount of $3,000,000, based on Farrar’s
intoxication at the time of the accident being the cause of Duran’s injuries,
as allowed by La. C.C. Art. 2315.4. The jury verdict form asked the
following:
3 Do you find, more probably than not, that Monica Duran’s injuries were caused by Gerald Farrar’s wanton or reckless disregard for the rights and safety of others, by Farrar’s driving while intoxicated at the time of the accident?
The jurors indicated “Yes” in response to that inquiry. Next, the jurors
wrote in “$3,000,000” when asked: “Please state an amount in dollars of
exemplary damages that you assess against Gerald Farrar, if any.”
As Farrar is appealing only the exemplary damage award, the focus of
our review will be the testimony and evidence presented to the jury for its
consideration in determining if exemplary damages were warranted, and if
awarded, whether the award was reasonable under the circumstances.
The Testimony and Evidence Adduced at Trial
During trial, there were numerous witnesses testifying about the cause
of the accident, the injuries sustained, and treatment provided and
recommended for Duran. Sergeant Daniel Jones, a deputy at the Sheriff’s
Office in Morehouse Parish, testified he was one of the first deputies to
respond to the scene of the October 26, 2016 accident (hereinafter “the
Accident”). Sgt. Jones testified he observed Farrar’s white Chevrolet
Silverado on the side of the roadway and a small Toyota blocking the bridge.
Jones did not personally contact anyone from the Silverado at the scene. He
testified that based on his investigation of the accident scene, Farrar
attempted to continue driving the Silverado on three wheels for several
hundred feet after he collided with the right-side guard rail.
Patrick Morris,1 a Louisiana State Police Trooper, also responded to
the accident scene. Trooper Morris testified when he arrived on the scene
1 At the time of trial Trooper Morris was patrol deputy in the Sheriff’s Office in Richland Parish.
4 that he started taking photos and spoke to both drivers. He observed that
Farrar’s vehicle had struck the guardrail of a small bridge going over a ditch
and that the front right wheel and tire was in the roadway north of the
bridge. Trooper Morris testified that Farrar’s vehicle travelled
approximately 700-800 feet on three wheels after the impact with the guard
rail and that he did not have any doubt that Farrar was hitting the gas while
his vehicle only had three wheels. When Trooper Morris spoke to Farrar
while at the scene as he was being treated in the ambulance for an injury to
his leg, he could smell the odor of alcohol on Farrar’s breath. Farrar denied
being impaired, admitted only to having a couple of drinks before the
accident, and then refused Trooper Morris’ request he submit to a
breathalyzer test. Trooper Morris did, however, conduct a field sobriety test
– the horizontal gauge nystagmus test – which he testified indicated Farrar
was impaired at the time of the accident. Trooper Morris placed Farrar
under arrest at that point and issued him a summons for DWI; Farrar was
then transported to the hospital for medical treatment.
Dr. Christopher John Najberg, a board-certified emergency physician
at the St. Francis Downtown Campus, treated Duran in the emergency room
after her accident. Though he did not personally treat Farrar in the
emergency room, Dr. Najberg did testify regarding the alcohol testing
procedure in the St. Francis emergency room where Farrar was treated.
Farrar’s medical records from the emergency room indicate that a blood
draw was performed on him due to a nurse’s belief that Farrar was
intoxicated; the medical record notes that Farrar’s speech was profane,
5 rambling, and slurred. Dr. Najberg testified that Farrar’s BAC of 0.346%2
indicates a very high degree of intoxication, and that “[F]or an alcohol level
of 0.346 you shouldn’t be operating a golf cart even as a video game. That
is extremely intoxicated.” Dr. Najberg also testified that Farrar having a
long-time drinking problem, or being a chronic drinker, would explain how
he could remain conscious at such a high blood alcohol level, and that no
one can safely operate machinery with a BAC of 0.346%.
James Steven Cox, a board member of Mer Rouge State Bank,
testified at trial regarding Farrar’s history of possibly abusing alcohol and
driving. The record shows that the Bank provided Farrar the vehicle he was
driving the night of the Accident. Cox testified that he attended an informal
meeting of board members regarding a prior automobile accident of Farrar in
2015 but that he was not aware of Farrar’s BAC of 0.346% following the
Accident with Duran. Cox confirmed that Farrar continued to earn bonuses
because of his performance as the bank president after causing the Accident,
but he did not know whether Farrar attended rehab for alcohol abuse after
the Accident.
Alex Rankin, also a board member of the Bank, testified at trial.
Rankin testified that during a prior board meeting he smelled something that
2 La. R.S. 14:98 provides, in pertinent part: A. (1) The crime of operating a vehicle while intoxicated is the operating of any motor vehicle, aircraft, watercraft, vessel, or other means of conveyance when any of the following conditions exist: (a) The operator is under the influence of alcoholic beverages. (b) The operator's blood alcohol concentration is 0.08 percent or more by weight based on grams of alcohol per one hundred cubic centimeters of blood.
6 he thought could be alcohol on Farrar’s person. Rankin testified that this
board meeting took place sometime in 2015 or 2016, prior to the Accident.
Nancy Lowery, a bank employee at the Bank from 2001 to 2014,
testified that in her position as a loan processor, she worked with Farrar
processing loans he originated. Lowery testified that she believed Farrar
was an alcoholic, based on her own personal experience of her father being
an alcoholic. She believed Farrar was under the influence of alcohol while
at work. She testified that Farrar frequently had a red face and slurred
speech, and that board members regularly attended board meetings with
Farrar when he was visibly drunk. Lowery testified that she did not speak to
her superiors at the bank about her belief that Farrar was an alcoholic.
Cindy Turner, Farrar’s sister, also testified at trial. Like Farrar,
Turner was employed by the Bank, and she has been a bank teller there since
2014. Turner testified that Farrar’s wife, Holly, had approached her on
multiple occasions prior to the Accident with concerns that Farrar was an
alcoholic. She denied her brother had a problem with alcohol. Turner
testified, with a limited recollection of conversations she had with the
superiors at the bank and her sister-in-law, that she did not ever personally
see her brother drinking to excess or driving under the influence of alcohol.
Turner testified that on the evening of the Accident, she spoke to Farrar on
the phone for approximately 15-20 minutes, and that Farrar did not seem
drunk to her and was not slurring his words. Turner confirmed she was
aware that Farrar received a DWI following the Accident, “because of the
things that were released in the news,” but she denied she personally knew
that her brother was drunk on the night of the accident. Turner testified that
7 she went to the hospital to see Farrar the night of the Accident, but denied
observing him use profane or slurred speech to the emergency room
personnel, despite contemporaneous medical records reflecting such conduct
by Farrar.
The refusal or delay by Farrar in the course of this litigation in
admitting and disclosing his level of intoxication at the time of the accident
would understandably be a factor for the jury in arriving at its exemplary
damage award. To that point, Turner confirmed at trial that her brother told
Trooper Morris and hospital personnel that he had one drink earlier in the
day, and she denied smelling alcohol on him. The results of the blood
alcohol test at the hospital, and that of medical personnel familiar with the
effects of alcohol in the system, revealed a significantly different reality
from that consistently depicted by the testimony of Turner and Farrar
regarding Farrar’s condition leading up to and immediately following the
Accident.
Kelley Adamson, a traffic accident reconstructionist and licensed
professional civil engineer in the states of Texas, Louisiana, and Mississippi,
testified that he had been doing accident reconstruction for 39 years and
estimated he had performed approximately 7000 traffic accident
reconstructions in his career. Adamson testified regarding his investigation
and the contents of a report he prepared, regarding Farrar’s accident scene.
Adamson’s report provides the following summary of his opinions:
1. Based upon my review and analysis, Mr. Farrar (driver of the 2015 Chevrolet Silverado) was traveling northbound on US 425 in a left curve approaching a bridge section. Mr. Farrar failed to maintain his vehicle in the travel lane, traveled to the right and struck the guardrail. The impact caused the right front wheel to be torn off the vehicle. The
8 wheel came to rest in the northbound lane of US 425. Mr. Farrar’s vehicle traveled over 800 feet further to the north, traveling on three wheels, before coming to rest. To travel this distance with the disable vehicle, the driver would have to apply power.
2. Ms. Monica Duran (driver of the 2000 Toyota Tacoma) was traveling northbound on US 425. Her vehicle struck the Silverado’s wheel which caused her vehicle to veer to the left and strike the left side guardrail. There is no indication that Ms. Duran was exceeding the posted speed limit.
3. From my training and education in the field of human factors, Ms. Duran would not have been able to identify the black tire/wheel in the roadway until too late to avoid the collision.
Adamson concluded that Farrar’s failure to control his vehicle was
consistent with being under the influence of alcohol, and that his
investigation established that Farrar’s tire did not come off or begin to
loosen prior to him hitting the guard rail.
Also testifying was Dr. William J. George, a pharmacologist,
toxicologist, and professor at Tulane Medical School in New Orleans,
Louisiana, who has 50 years of experience in his field and has been
recognized as an expert in both pharmacology and toxicology in courts
throughout Louisiana and other states. Dr. George testified that he had
reviewed Farrar’s medical records from St. Francis that showed a BAC of
0.346% in reaching his expert opinion. Dr. George noted that Farrar was
approximately four times the legal limit of .08% BAC at the time of his
accident. Dr. George testified that at this blood alcohol level, an individual
would be in a “stupor stage” of intoxication and experience extreme
confusion and loss of motor function, blurred or double vision, and difficulty
staying awake. Dr. George testified that to achieve the 0.346% BAC shown
in Farrar’s certified emergency room records, Farrar had to have consumed
9 at least 12-15 beers, 12-15 shots of bourbon, or 12-15 glasses of wine at a
minimum. Dr. George concluded, in his expert opinion, that Farrar’s blood
alcohol level was clearly a significant factor in his operation of his motor
vehicle and his collision with the right guard rail.
The defendant, Gerald Farrar, testified at the trial. On cross-
examination, he admitted that prior to the Accident he would regularly drink
and drive in his bank-owned vehicle. He repeatedly denied at trial that he
was an alcoholic, but explained that at the time of his accident he had a lot
going on in his personal life.3 The record shows that prior to the Accident,
his physician, Dr. Allen Spires, prescribed him Lorazepam 2 mg per day,
which he took for anxiety. He admitted that he drank too much on the day
and night of the Accident, and that he refused the breathalyzer test from
Trooper Morris at the scene because he was “scared.” Farrar testified that he
was not aware, as testified to by his wife, that she had ever called his
coworkers and fellow board members at the bank expressing concerns about
his drinking.
Farrar acknowledged a prior accident in his bank-owned vehicle one
afternoon in April of 2015, in which the vehicle was totaled when he crashed
into a tree. He told the responding officer at the scene that he swerved to
3 Farrar’s testified a complicated family situation contributed to his separation from his wife, Holly Farrar, three days before the Accident. Farrar explained his 16-year- old daughter had become pregnant during her sophomore year in high school, and she had given birth to his first grandchild on October 26, 2015. What followed, he testified, was contested litigation regarding the custody and visitation with the child. The day of the Accident, was the child’s first birthday, which was to begin a visitation schedule which included overnight stays by the child with his biological father. Farrar attended his grandson’s first birthday party being hosted at Farrar and his wife’s marital home, and that he began drinking between 12:00 PM and 1:00 PM that day. At around 6:45 PM when the accident occurred, Farrar was driving to stay at this friend’s house in Rayville, Louisiana, with plans to leave the next morning to go out of state on a hunting trip.
10 avoid a wild hog in the road and struck a tree, and that OnStar notified local
authorities after the collision. He acknowledged he suffered a gash on his
head, that an ambulance did come to the scene, and a paramedic treated him
there. Farrar declined a ride with the ambulance to go to the emergency
room. The record shows that despite a request from Duran’s counsel, no
medical records from an ambulance responding to the 2015 accident were
ever produced. Farrar did not go to a hospital, but went to the office of his
friend, Dr. Allen Spires, to receive stitches to his head. Farrar denied that
alcohol was a factor in that accident.
Regarding the Accident, the record shows that throughout litigation
with Duran, Farrar steadfastly maintained that he had consumed one or only
a few drinks. Specifically, in November of 2017, after suit had been filed,
Farrar responded to written interrogatories claiming that he did not consume
any alcohol prior to the Accident. During his deposition in December of
2017, Farrar testified that he only consumed two ounces of alcohol on the
day of the Accident. Finally, at trial, and only after his medical records
showing his BAC of 0.346% hours after the accident were presented to the
jury and introduced in the record, did Farrar finally admit that he did
consume more than one alcoholic drink on the date of the Accident. He
testified that he drank bourbon and waters, but he did not know the number
of drinks he consumed. He testified that he had 20-40 miles to travel on the
two-lane road to his hunting camp, after consuming alcohol at his
grandson’s party that day. Duran’s counsel asked:
Q: And you didn’t limit yourself because you have no limit. True?
A: I messed up.
11 Farrar admitted to being on the phone with his sister, Cindy Turner, for 30-
45 minutes prior to the Accident. The record shows that while Duran’s
vehicle only travelled 20 feet after she hit the guardrail, Farrar’s vehicle
travelled 880 feet past the point of impact. Farrar could not say whether his
foot was on the gas after he collided with the guardrail. He broke his ankle
during the Accident, which he testified required surgery a few days later. He
did not recall when he first contacted his employer about his accident in his
bank-owned truck, but that during a board meeting when he returned from
his surgery, he did admit to his fellow board members that he had been cited
for a DWI in connection with the Accident. Farrar testified that he was not
fired from his job, and he was encouraged by the board to seek help if he
needed it for a drinking problem. He denied having a drinking problem,
only admitting that he had too much drink the day of the Accident. He
testified that he has not had a drink since the accident and expressed remorse
for the harm he caused to Duran and to his own family. Farrar testified that
he continued to receive pay and bonuses from the bank after the Accident.
Farrar denied knowing his BAC was 0.346% following the Accident until
trial.
Holly Farrar, Farrar’s wife, testified that Farrar’s drinking had been a
stressor throughout their 23-year marriage. Farrar would drink and drive to
and from his hunting property on Higginbotham Road, and she testified she
would smell alcohol on him after he returned. In multiple telephone calls
from 2013-2014, Holly Farrar testified that she called Turner, Farrar’s sister,
regarding Farrar’s drinking issues.
12 Regarding the incident where Farrar ran into a tree in 2015, Holly
Farrar testified that she arrived to that scene, saw blood coming from his
head, and observed the severity of the damage to the bank’s vehicle. She
testified that instead of the ambulance taking Farrar to the emergency room,
she took him to the office of his friend and family physician, Dr. Allen
Spires. Dr. Spires testified and confirmed that no blood tests were ordered
on this date and there is no record of Farrar’s visit or treatment at his office.
Shortly after that accident in 2015, Holly Farrar contacted Farrar’s
coworker, John Shackelford, to discuss the ongoing drinking problem and
suggested that Farrar may need rehab. Shackelford testified at trial and
confirmed Holly was concerned Farrar was drinking too much.
As it is relevant as a guidepost for exemplary damage award
considerations, there was testimony regarding the financial standing of
Farrar. The record shows that Gerald Farrar and Holly Farrar’s gross
earnings from 2012 to 2017 averaged $176,000 per year, and to owning his
home, 60 acres of land in Morehouse Parish, and owning additional acreage
with his brother. Farrar received yearly raises and bonuses ranging from
$10,000-$20,000 in the years following the Accident.
When the trial came to an end on April 14, 2022, the jury rendered a
verdict in favor of Duran $162,556 for past and future medical expenses for
injuries caused or aggravated by the Accident, plus $680,599 loss of past,
present and future of income and various general damage awards, detailed
above, and against Farrar and Allmerica,4 in addition to the $3,000,000
4 This Court granted summary judgment in favor of Mer Rouge State Bank on issues of vicarious liability, punitive damages, and negligent entrustment, and dismissed the claims against them. Duran v. Allmerica Fin. Benefit Ins. Co., 53,615 (La. App. 2
13 exemplary damage award. Based on the jury’s verdict, a judgment in the
amount of $3,843,155 was signed by the court, and it is from this judgment
that Farrar and Allmerica appeal.
DISCUSSION
Exemplary Damages:
On appeal, Farrar presents one assignment of error related to the
jury’s assessment of exemplary damages against him:
The jury’s award of $3,000,000 in punitive damages (which is a ratio of almost 4:1 when compared to the $843,155 awarded as compensatory damages) is “grossly excessive” and in violation of the Due Process Clause because Farrar’s conduct was not significantly reprehensible or malicious, he is not a recidivist, Duran did not establish at trial that she could have suffered more significant harm, and the award is not justified by Farrar’s modest wealth. Thus, this Court should reduce the punitive damages award to no more than a 1:1 ratio, such that punitive damages would be no more than $843,155 and the total judgment in Duran’s favor would be no more than $1,686,310.
The standard of review of an exemplary damages award on appeal is
de novo. Farrar asserts the instant “grossly excessive” exemplary damage
award by the jury violates his due process rights. The United States
Supreme Court has held that when a defendant has properly raised a federal
due process claim at the trial court level, determining whether an award of
punitive damages is “grossly excessive” in violation of the Due Process
Clause under the Fourteenth Amendment is subject to a de novo standard of
review. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S.
424, 121 S. Ct. 1678, 149 L. Ed. 2d 674 (2001); State Farm Mut. Auto. Ins.
Co. v. Campbell, 538 U.S. 408, 418, 123 S. Ct. 1513, 155 L. Ed. 2d 585
Cir. 11/18/20), 306 So. 3d 611, writ denied, 21-00212 (La. 4/7/21), 313 So. 3d 979, and writ denied, 21-00202 (La. 4/7/21), 313 So. 3d 980
14 (2003). In accordance with this directive, the Louisiana Supreme Court has
also adopted a de novo standard of review in assessing whether an award of
punitive damages violates a defendant’s due process rights. Mosing v.
Domas, 02-0012 (La. 10/15/02), 830 So. 2d 967.
In BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct.
1589, 134 L. Ed. 2d 809 (1996), the United States Supreme Court provided
three “guideposts” to determine when an exemplary damage award crossed
the constitutional line. The BMW factors include: (1) the degree of
reprehensibility of the defendant's conduct; (2) the disparity between the
harm and/or potential harm suffered by the plaintiff and the exemplary
damages award; and (3) the difference between the exemplary damages
awarded by the jury and the civil or criminal penalties authorized or imposed
in comparable cases. BMW of North America, Inc., supra.
The United States Supreme Court stated that “perhaps the most
important indicium of the reasonableness of a punitive damages award is the
degree of reprehensibility of the defendant’s conduct.” Id. (emphasis
added). The BMW Court held the most important factor was the degree of
the reprehensibility of the defendant’s conduct and whether the harm caused
was physical as opposed to economic; the tortious conduct evinced an
indifference to or a reckless disregard for the health and safety of others; the
target of the conduct had financial vulnerability; the conduct involved
repeated actions or was an isolated incident; and the harm was the result of
intentional malice, trickery, or deceit, or mere accident. Id.
We recognize our legislature has made clear its desire to increasingly
put juries in control of determining damage awards, as evidenced by
15 substantially lowering the threshold of the amount in controversy eligible to
be submitted to a jury from $50,000 to $10,000, effective in 2021. La. C. C.
P. art. 1732. With that policy in mind, we will review each of the guideposts
in determining the reasonableness of the exemplary damages awarded by
this jury.
The Degree of Reprehensibility of Farrar’s Conduct
The Louisiana legislature has identified certain behaviors which it
clearly intends to dissuade. Some activities are criminalized and can include
incarceration and financial penalties, which are enumerated in Title 14 of
our revised statutes. To discourage other actions, it imposes treble damages,
awarding a damaged plaintiff three times their actual damages in specifically
enumerated circumstances.5 In those instances, such as improperly
harvesting the timber of another, the trier of fact only has to undertake the
somewhat simple mathematical task of affixing the award of three times the
damage amount. The formula for determining treble damages can easily be
represented as [D] being damages, and multiplying that number by three. As
such: treble damages = [D] x 3
Regarding the dangers inherent in driving while intoxicated, our
legislature has found drunk driving to be so reprehensible that, in addition to
potential criminal prosecution, it exposes the driver to exemplary damages in
favor of those injured as a result. La. C. C. art. 2315.4 authorizes recovery
of exemplary damages, in addition to general and special damages, when
there is sufficient proof there were injuries caused by a “wanton or reckless
5 Examples include La. R.S. 51:1401-1430 (the Louisiana Unfair Trade Practices Act (LUPTA), as well as the Timber Trespass Statute, La. R.S. 3:4278.1.
16 disregard for the rights and safety of others by a defendant whose
intoxication while operating a motor vehicle was a cause in fact of the
resulting injuries.” In these very limited circumstances, there is no clear-cut
formula controlling the calculation of exemplary damages, other than the
award must be determined on review to be reasonable under the specific
facts and circumstances
Exemplary damage awards serve to punish the defendant and dissuade
others from undertaking similar reprehensible conduct. It is the complexities
encountered by the trier of fact in arriving at a “reasonable” amount of
damages that are designed to punish and deter that we draw our focus. In
this endeavor, we are guided at the outset by the Louisiana Supreme Court’s
considerations in Mosing v. Domas, 02-0012 (La. 10/15/02), 830 So. 2d 967
and Warren v. Shelter Mut. Ins. Co., 16-1647 (La. 10/18/17), 233 So. 3d
568, which are cases addressing large exemplary damage awards that were
challenged as grossly excessive.
A determination of the degree of reprehensibility of a certain behavior
is far more than a one-step “true or false” inquiry. The Louisiana Supreme
Court found that the inquiry into whether punitive damages are grossly
excessive begins with balancing the reprehensibility of the act against the
severity of the punitive damages award. Mosing, supra. The Mosing Court
considered the following aggravating factors of particularly reprehensible
conduct: the type of injury caused or that could have been caused by the
conduct; the defendant’s indifference to or reckless disregard for the health
and safety of others; and the probability of recidivism. The reprehensibility
analysis was further refined by the United States Supreme Court in State
17 Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155
L.Ed.2d 585 (2003), which the Louisiana Supreme Court later adopted in
Warren v. Shelter Mut. Ins. Co., 16-1647 (La. 10/18/17), 233 So. 3d 568.
The Court provided the five following considerations: (1) whether the harm
caused was physical as opposed to economic; (2) whether the conduct
causing the plaintiff’s harm showed indifference to or a reckless disregard of
the health or safety of others; (3) whether the “target of the conduct” was
financially vulnerable; (4) whether the defendant’s conduct involved
repeated actions as opposed to an isolated incident; and (5) whether the harm
caused was the result of intentional malice, trickery, deceit, or mere
accident. Farrar’s actions fit squarely in each of these considerations as
aggravating factors and would appear to push the needle towards making a
significant exemplary damages award to deter such dangerous and harmful
actions.
Duran suffered physical and significant economic harm – not only the
costs of medical treatment for her injuries, but the lasting impact to her
ability to work and fully enjoy her life to the fullest. Farrar’s conduct of
driving while intoxicated demonstrated a reckless disregard to the health and
safety of others travelling on the highway. The numbers of those killed and
seriously injured on Louisiana roads each year in accidents caused by drunk
drivers is alarming (and completely preventable). The record demonstrates
that Farrar’s conduct of driving while intoxicated involved repeated actions,
as opposed to this being an isolated incident as he attempts to argue.
Finally, the harm caused to Duran was a direct result of Farrar’s intentional
malice of opting to drive while he was dangerously intoxicated; he was
18 considered by medical professionals and experts to be in the “stupor stage”
of intoxication when his actions caused the Accident and resulting injuries to
Duran. The record also reveals that Farrar went to great lengths to conceal
the fact that he drank so heavily before choosing to drive – he refused a
breathalyzer test, gave repeated false statements regarding his drinking on
the day of the Accident, and failed to disclose to his employer and family
members the extent of his drinking while he operated the bank’s vehicle.
Disparity Between Harm and/or Potential Harm Suffered and Exemplary Damages Awarded
Farrar argues that his conduct was not sufficiently reprehensible or
malicious to justify the damages award and that his conduct that led to the
accident lacked malice. Farrar asserts that due to his personal stress and
pressure from his family issues that day, his conduct was not anywhere near
the extreme end of the reprehensibility spectrum. Farrar also focuses his
argument on the fact that this was his first offense DWI conviction and
therefore concludes that he does not qualify as a “recidivist” for purposes of
the reprehensibility analysis. We disagree. Reprehensible and dangerous
activity resulting in substantial damages triggers significant exemplary
damages. The greater the harm and the greater the reprehensibility of the
conduct, the greater the award required to achieve the deterrence necessary.
After hearing evidence presented regarding Duran’s physical injuries,
her inability to continue employment, and her mental distress, the jury
awarded approximately $843,155 in compensatory damages, of which over
$162,000 was awarded for past and future medical expenses. Those awards
by the jury were not challenged as excessive by Farrar. The possible injuries
to Duran or her passenger, the three individuals in the vehicle behind Duran
19 that the record indicates stopped to provide assistance, or others that crossed
paths with Farrar that evening, could have easily included death or
additional catastrophic injuries. The record in its entirety and the evidence
at trial supported the jury’s finding that Farrar possessed a behavioral pattern
of driving while intoxicated on other occasions, including the probability
that this was not his first time to drive intoxicated.
The timeline of events established by the record, including concerns
from Farrar’s wife and fellow bank employees regarding his alcohol abuse,
support the apparent conclusion by the jury that Farrar was in fact a
recidivist and that this was not an isolated incident. The record also
establishes that Farrar displayed malice when he chose to drive drunk on the
day of the accident. He repeatedly failed to disclose the truth of his
consumption of alcohol that day, and often changed his story to his family
and coworkers regarding the circumstances surrounding the Accident
throughout the litigation, even up until the trial on the matter. The jury,
rightfully so, disapproved of such actions.
Further, the record establishes Farrar’s disregard for human life and
safety was high based on his own testimony that he would drink alcohol and
routinely drive. Farrar’s high level of intoxication at the time of the accident
– a 0.346% BAC hours later – is extremely alarming. The higher the BAC
when one gets behind the wheel, the greater evidence of a wanton disregard
for the life and safety of others. Actions exhibiting a greater degree of
reprehensible conduct are deserving of greater deterrence, and that
deterrence comes in the form of effective financial penalty and
accountability. The considerations begin with the level of damages resulting
20 from the reprehensible conduct, and the resulting significant exemplary
damages are an expected result, both in dollar figure and as a ratio to
damages.
Farrar argues that the relative reprehensibility of his conduct is
nowhere near egregious enough to justify a punitive to compensatory
damages ratio above 1:1, and asks this Court to reduce the punitive to
compensatory damages ratio to no more than 1:1 based on the particular
facts of this accident. Farrar argues Duran was sufficiently compensated in
general damages, and she failed to establish that greater harm could have
befallen her during the accident. We disagree.
We note that exemplary damages are not designed to make the injured
party whole, as that is role of special and general damages. The purpose of
exemplary damages is the punishment and deterrence of reprehensible
conduct of the defendant. Other than treating exemplary damages to
something akin to penalties under our criminal statutes and those funds paid
to the State of Louisiana, what are we to do with exemplary damages? The
legislature intends the exemplary damages should be paid to the injured
party, rather than some government agency or subdivision, or it would have
drafted the applicable provisions of the law otherwise. This framework does
not cause the injured party to be overcompensated, as it is punishment, not
compensation, that is the primary focus and intent of exemplary damages..
Courts have “decline[d] again to impose a bright line ratio which a
punitive damages award cannot exceed.” Warren, supra. Ratios in excess
of single-digits could raise serious constitutional questions, and single-digit
ratios are “more likely to comport with due process.” Id. Although the
21 United States Supreme Court stated “there are no rigid benchmarks that a
punitive damages award may not surpass,” it strongly indicated the
proportion of punitive damages to harm should generally not exceed a ratio
of 9 to 1. State Farm Mut. Auto. Ins. Co. supra. The ratio of exemplary
damages against Farrar fixed by the jury was approximately 3.56 to 1.
The Court in State Farm Mut. Auto. Ins. Co., supra, discussed certain
combinations of factors that would justify relatively higher or lower ratios.
When compensatory damages are substantial, then a lesser ratio, perhaps
only equal to compensatory damages, can reach the outermost limit of the
due process guarantee. Id. The Court also minimized the relevance of
criminal penalties as a guide, saying that they were not particularly helpful
in determining fair notice. Id.
Considering the deliberations set forth above by the Louisiana and
United States Supreme Courts, the following formula is helpful, with
exemplary damages being the result of calculations taking into consideration
the actual damages inflicted, the degree of reprehensible conduct as a
multiplying factor of any fractional or whole number, and the wealth of the
responsible party resulting in any fractional or whole number.
[Damages] x [Reprehensibility] x [Wealth] The damages, medical expenses and otherwise, were very significant
in the present matter – $843,155. The reprehensibility of getting behind the
wheel and driving at four times the legal limit should result in an exponential
increase. Lastly, the wealth of Farrar is not significant, and therefore no
further enhancement would be appropriate.
22 [$843,155] x [±3.56] x [1] = $3,000,000 (Damages) (Reprehensibility) (Wealth Factor)
The record as a whole indicates that despite this being Farrar’s first
DWI conviction, Farrar had driven while likely and admittedly impaired
numerous times. Farrar’s BAC of 0.346% was almost four times the legal
limit of 0.08% for operating a vehicle. The ratio of the punitive damages to
the compensatory damages awarded by the jury in his case is approximately
3.56 to 1.
Louisiana courts have previously upheld an exemplary damage to
compensatory damage ratio well in excess of a 1:1 ratio. In Warren, supra,
the Court approved punitive damages in a 2:1 ratio, awarding $4,250,000.00
in exemplary damages to a plaintiff who received $2,125,000.00 in
compensatory damages. In Tingle v. Am. Home Assur. Co., 10-71 (La. App.
3 Cir. 6/2/10), 40 So. 3d 1169, 1174, writ denied, 10-1580 (La. 10/29/10),
48 So. 3d 1095, and writ denied, 10-1578 (La. 10/29/10), 48 So. 3d 1095,
and writ denied, 10-1564 (La. 10/29/10), 48 So. 3d 1095, and writ denied,
2010-1563 (La. 10/29/10), 48 So. 3d 1096, and writ denied, 2010-1562 (La.
10/29/10), 48 So. 3d 1096, an intoxicated driver of an 18-wheeler ran a red
light and collided with the plaintiffs’ car, killing their two-year-old daughter
and injuring both parents. The jury awarded approximately $2.5 million in
compensatory damages and $5 million in exemplary damages – a 2:1
exemplary damage to compensatory damage ratio. The Louisiana Supreme
Court in Mosing, supra, considered the actions of an intoxicated driver and
upheld a jury award of nine times the amount of compensatory damages
awarded – a ratio of 9:1.
23 Considering the above, we find Farrar’s arguments in favor of a 1:1
ratio are without merit considering these specific facts and circumstances. It
is only because Farrar caused such extensive damages that is there a
correspondingly high exemplary damage award. The members of the jury
were presented with ample evidence regarding Farrar’s actions before,
during, and after the accident which caused significant injury to Duran. We
find that the 3.56:1 ratio ($3,000,000) of exemplary damages to
compensatory damages in this case, under these specific factors and with
this shocking level of reprehensibility, is not grossly excessive, and does not
violate the Due Process Clause.
Difference Between Exemplary Damages Awarded and Civil or Criminal Penalties Authorized
In this case, the record shows that Farrar was convicted of DWI, first
offense. Farrar’s BAC of 0.346% exposed him to enhanced criminal
penalties, pursuant to La. R.S. 14:98.1; however, his high BAC was not
known to the judge at the time of his sentencing, and he was spared that
enhancement. Farrar’s criminal penalties are not the major factor to
consider in determining whether the exemplary damages award in this
matter is excessive. As noted in Thistlewaite v. Gonzales, 12-130 (La. App.
5 Cir. 12/18/2012), 106 So. 3d 238, there is not an available conversion table
for incarceration versus money damages. Certainly, such an alarmingly high
BAC could have resulted in a six-month jail sentence as provided in La. R.S.
14:98.1 and an extended suspension of driving privileges.
The Added Consideration of Farrar’s Wealth
The only non-BMW factor traditionally considered by Louisiana
courts in fixing exemplary damages is to take into consideration the
24 defendant’s relative economic wealth. A defendant’s assets and income are
relevant factors that may be considered in determining whether an award of
exemplary damages is excessive: “The importance of the defendant’s
financial situation to the goals of punishment and deterrence is obvious:
What ‘may be awesome punishment for an impecunious individual
defendant [may be] wholly insufficient to influence the behavior of a
prosperous corporation.’” In re New Orleans Train Car Leakage Fire Litig.,
00-0479 (La. App. 4 Cir. 6/27/01), 795 So. 2d 364, 388, quoting Cont’l
Trend Res., Inc. v. OXY USA, Inc., 101 F.3d 634, 641 (10th Cir.1996), cert.
denied, 520 U.S. 1241, 117 S. Ct. 1846, 137 L. Ed. 2d 1049 (1997).
However, the defendant’s economic situation is only one of the factors that
may be considered in determining whether an award of exemplary damages
is excessive. Id.
Farrar argues that he and his wife earned approximately $176,000 per
year from 2012 to 2017. He asserts he is an individual of normal means who
has no prior history of DWI offenses; he is not a major corporation that
needs significant exemplary damages to be adequately deterred from future
drunk driving incidents. We note that the record does not contain any
objectively verifiable evidence regarding Farrar’s actual wealth aside from
his income tax returns. Farrar presented evidence as to his employment
history and salary, plus the existence of a retirement account and a list of
assets, including residential and recreational land and properties. The record
does not contain evidence as to the amount of the retirement account or the
value of his other assets. Accordingly, we find that Farrar’s wealth is not a
major or enhancing factor in the analysis regarding the exemplary damages
25 award and would not be a contributing factor to further increase the ratio of
exemplary damages to actual damages. Individuals with significant wealth
may require proportionate exemplary damages to ensure the message
regarding reprehensible conduct from the jury and society is received.
However, in this case, Farrar’s wealth is not a necessary additional factor.
Farrar’s extreme and dangerous conduct of driving with a blood
alcohol content four times the legal limit and then attempting to actively
conceal that relevant fact throughout the litigation is of such a high degree of
reprehensibility that we cannot say the jury’s award of exemplary damages
of a 3.56 to 1 ratio, or the dollar amount, was unreasonable. Considering
each of the above guideposts and recognizing the degree of reprehensibility
of Farrar’s conduct, as well as the extent of the resulting damage to Duran,
we affirm the ratio and amount of exemplary damages as reasonable.
Suspensive Appeal Bond
Also pending before the court is Duran’s appeal regarding the
suspensive appeal bond posted by Farrar and his insurer. At the conclusion
of the trial, Farrar timely moved for a suspensive appeal from the May 31,
2022 judgment holding him and Allmerica liable for Duran’s damages in the
amount of $3,843,155. The trial court granted the motion for suspensive
appeal and set the appeal bond for $5,500,000. Allmerica timely filed the
suspensive appeal bond. The bond for $5,500,000 was provided by Hanover
for the principals listed in the judgment, Farrar and Allmerica.
In December of 2022, Duran filed a motion to test the sufficiency and
validity of the suspensive appeal bond with the trial court. On June 22,
2023, the trial court denied Duran’s motion, but did order Hanover Insurance
26 Company to file an amended affidavit providing additional details regarding
the process it used to approve submission of the suspensive appeal bond in
this matter. On August 1, 2023, Hanover filed the amended affidavit as
directed. Duran did not seek supervisory review at the time of the trial
court’s judgment on its motion to test the sufficiency of the suspensive
appeal bond, in accordance with La. C. C. P. art. 2201, but filed its own
separate devolutive appeal on the issue. In general, when an unrestricted
appeal is taken from a final judgment, the appellant is entitled to seek review
of all adverse interlocutory judgments prejudicial to him, in addition to the
review of the final judgment. Martin v. Martin, 52,401 (La. App. 2 Cir.
11/14/18), 261 So. 3d 984, 989. Accordingly, we will address Duran’s
arguments regarding the trial court’s judgment on the suspensive appeal
bond here in this consolidated appeal.
Duran asserts that Farrar’s pursuit of a suspensive appeal is improper
because the suspensive appeal bond is invalid. Specifically, Duran argues
that the surety company securing the appeal bond, Hanover Insurance
Company, is not entitled to serve as surety on the appeal bond. Duran
asserts that Hanover – an excess insurer of Mer Rouge State Bank, who was
dismissed from this lawsuit through a motion for summary judgment – is not
entitled to serve as surety on Farrar’s suspensive appeal bond.
In response to Duran’s arguments on appeal relating to the suspensive
appeal bond, Farrar argues that the suspensive appeal bond was issued by a
reputable surety in an amount greater than the judgment plus interest, and
was approved by the trial court. Farrar argues that although Hanover did
issue an excess insurance policy to Mer Rouge State Bank, the jury verdict
27 and subsequent judgment in favor of Duran are not against Hanover or Mer
Rouge State Bank. Thus, neither Hanover nor its named insured, Mer Rouge
State Bank, have been cast in judgment in this matter.
The trial court correctly determined that Hanover is not serving as
“surety for its own debt” and the suspensive appeal bond is valid, in
accordance with La. C. C. P. art. 2124(E). We find Duran’s arguments
regarding the suspensive appeal bond are without merit. Therefore, Duran’s
motion to dismiss Farrar’s suspensive appeal is denied, and the trial court’s
June 22, 2023, judgment recognizing Hanover as surety of the suspensive
appeal bond is affirmed.
CONCLUSION
We conclude that the jury's award of $3,000,000 in exemplary
damages is not excessive under these specific facts and circumstances, and it
does not violate the Due Process Clause of the Fourteenth Amendment. We
affirm the exemplary damages ratio of 3.56 to 1 and the monetary award of
$3,000,000 against Gerald Farrar. Further, we affirm the trial court’s June
22, 2023 judgment recognizing Hanover as a proper surety for the
suspensive appeal bond. Costs are assessed to Gerald Farrar and Allmerica.
AFFIRMED.