Villella v. Waikem Motors, Inc.

543 N.E.2d 464, 45 Ohio St. 3d 36, 1989 Ohio LEXIS 197

• Court: Ohio Supreme Court
• Decided: August 16, 1989
• Docket: No. 88-64
• Status: Published

Opinions

Alice Robie Resnick, J.

I

In its first proposition of law, the appellant asserts that punitive damages should not have been awarded to appellee, because the evidence produced at trial was insufficient to support a finding of actual malice, which is a prerequisite to punitive damages recovery.

Historically, punitive damages in Ohio have been allowed in civil tort actions which involve ingredients of fraud, malice, or insult. Roberts v. Mason (1859), 10 Ohio St. 277; Detling v. Chockley (1982), 70 Ohio St. 2d 134, 136, 24 O.O. 3d 239, 240, 436 N.E. 2d 208, 209. Additionally, in construing the reasoning behind punitive damages, this court has held that “ ‘[t]he principle of permitting [punitive] damages, in certain cases, to go beyond naked compensation, is for example, and the punishment of the guilty party for the wicked, corrupt, and malignant motive and design, which prompted him to the wrongful act.’ ” Detling, supra, at 136, 24 O.O. 3d at 240-241, 436 N.E. 2d at 209-210, citing Simpson v. McCaffrey (1844), 13 Ohio 508, 522; see, also, Rayner v. Kinney (1863), 14 Ohio St. 283, 286-287; Smith v. Pittsburgh, Ft. W. & C. Ry. Co. (1872), 23 Ohio St. 10,18; Railroad Co. v. Hutchins (1881), 37 Ohio St. 282, 294.

The conduct necessary to support punitive damages awards has been a major concern of trial courts. In Preston v. Murty (1987), 32 Ohio St. 3d 334, 512 N.E. 2d 1174, paragraph one of the syllabus, we set forth the elements of malice needed in order to support an award of punitive damages, by noting that the defendant must have operated under “(1) that state of mind * * * which * * * is characterized by hatred, ill will or a spirit of revenge, or (2) a conscious disregard for the rights and safety of other persons that has a great probability of causing substantial harm.” Also, we have noted “that it is rarely possible to prove actual malice otherwise than by conduct and surrounding circumstances.” Davis v. Tunison (1959), 168 Ohio St. 471, 475, 7 O.O. 2d 296, 298, 155 N.E. 2d 904, 907. Moreover, actual malice can be inferred from conduct and surrounding circumstances which may be characterized as reckless, wanton, willful or gross. Columbus Finance, Inc. v. Howard (1975), 42 Ohio St. 2d 178,184, 71 O.O. 2d 174,177, 327 N.E. 2d 654, 658; Rubeck v. Huffman (1978), 54 Ohio St. 2d 20, 23, 8 O.O. 3d 11, 13, 374 N.E. 2d 411, 413.

In applying the applicable law to the instant case, we do not find substantial evidence adduced at trial which would support a finding by a preponderance of the evidence as to hatred, ill will, or a spirit of revenge under the first standard announced in Preston for determining actual malice. Preston, supra, at 335, 512 N.E. 2d at 1175. However, as to the second prong of the Preston test we do find that Lou Robb acted with a conscious disregard for the rights and safety of the appellee. We find therefore that there was a preponderance of the evidence² submitted from which the jury could conclude that the appellant acted with actual malice. Specifically, the record demonstrates the following reckless behavior on the part of appellant.

George Waikem, Sr. had been in the automobile business since 1946. His son, David C. Waikem, had worked at all his father’s dealerships his “whole life” and had been the dealer principal at the Waikem Chrysler Plymouth Dealership for two and one-half years. David Waikem informed Louis Robb, the general manager, that Renee Villella’s bill had not been paid. Thus, David Waikem admitted that jointly he and Robb had the idea of, and he, Waikem, was instrumental in, arranging the situation whereby Villella was not to be given his car unless he paid his daughter’s bill.

Appellee testified that when he was informed by Robb that Waikem Motors was going to keep his car until he discharged his daughter’s obligation, he stated, “I have never heard of this before but what can we do about it?” His testimony continued: “And that then led into a [sic] probably one of the most heated traumatic arguments, fights whatever you want to call it that I have ever had in my entire life including all of my business life.”

When asked what Robb’s general demeanor and attitude towards him were, appellee testified:

“A. Very hostile, almost threatening.

“Q. You mean over bearing?

“A. Almost threatening, more than over bearing.

“Q. OK.

“A. I think some names he used like dead beat if I am not mistaken, that we were dead beats and a number of things like that which is a personal [affront to me. I have a lot of integrity and I didn’t like that.”

Mrs. Villella, who entered the discussions after waiting about an hour in her car, observed that Robb acted “kind of arrogant”; and that he was “set in the fact that this was what he wanted and he wasn’t going to settle for anything else.”

In response to a question as to whether Robb changed his posture subsequent to a call to a lawyer after an hour and one-half of discussions, ap-pellee answered, “[n]one whatsoever, he continually badgered me about the $800.”

Appellee testified that as he was leaving, following the discussions, he was shaking and he was not feeling well. His wife testified that her husband’s “face was flushed and he was shaking and he [sic] you could just see that he was agitated.”

It was not until appellee walked outside and threatened a lawsuit that Robb asked if there was some way that they could negotiate again.

Appellee testified that he was under tremendous pressure to get to a $2,000,000 business negotiation for the selling of his employer’s factory the next day, and that he had to have his automobile because he had no other means of transportation to his out-of-town meeting.

He testified that after he finally obtained the release of his car, he and his wife went home. Further, he stated that he “didn’t even eat that evening.” He had intended to spend two to three hours reading the papers and legal documents relating to the next day’s negotiations, but he was so upset he was not able to do so. Moreover, he was able to sleep only for an hour.

Having found there was sufficient evidence from which actual malice could be inferred, we hold it was proper for the jury to assess punitive damages.

II

In the second proposition of law, the appellant contends that the amount of punitive damages awarded by the jury was unreasonable. He contends that they were the result of passion and prejudice in light of the misconduct of appellee’s counsel at trial, the amount of compensatory damages assessed compared with the punitive damages awarded, and the appellant’s conduct in relation to the appellee’s injuries.

In Fromson & Davis Co. v. Reider (1934), 127 Ohio St. 564, 189 N.E. 851, paragraph three of the syllabus, we held that “[i]n order to determine whether excessive damages were so influenced [by passion or prejudice], a reviewing court should consider, not only the amount of damages returned and the disparity between the verdict and remittitur where one had been entered, but it becomes the duty of such court to ascertain whether the record discloses that the excessive damages were induced by * * * misconduct on' the part of the court or counsel, or * * * by any other action occurring during the course of the trial which can reasonably be said to have swayed the jury in their determination of the amount of [punitive] damages that should be awarded.”

We have maintained that in closing arguments counsel may not “comment on evidence which has been excluded or declared inadmissible by the trial court or otherwise make statements which are intended to get evidence before the jury which counsel was not entitled to have the jury consider.” Drake v. Caterpillar Tractor Co. (1984), 15 Ohio St. 3d 346, 347,15 OBR 468, 470, 474 N.E. 2d 291, 293.

In the instant case appellant’s counsel objected to appellee’s counsel’s attempts to elicit certain testimony from attorney Randy Snow who apparently represented the appellee’s employer, and knew appellee, concerning the content of Snow’s telephone conversation with appellant’s general manager on the day of the discussions at Waikem Motors. Objections to the substance of the conversation were sustained by the court. The fact that the telephone conversation took place was admitted. Appellee’s counsel commented in closing argument as to this conversation, as follows:

“* * * Randy [Snow] talked to Robb, but the defendant objected to your hearing what Randy told Robb, and under technical rules of law, the court had to sustain that objection. So you don’t know what Randy told Robb that night.” This reference was made only once and it was not objected to by opposing counsel.

“Except where counsel, in his opening statement and closing argument to the jury, grossly and persistently abuses his privilege, the trial court is not required to intervene sua sponte to admonish counsel and take curative action to nullify the prejudicial effect of counsel’s conduct. Ordinarily, in order to support a reversal of a judgment on the ground of misconduct of counsel in his opening statement and closing argument to the jury, it is necessary that a proper and timely objection be made to the claimed improper remarks so that the court may take proper action thereon.” (Emphasis sic.) Snyder v. Stanford (1968), 15 Ohio St. 2d 31, 44 O.O. 2d 18, 238 N.E. 2d 563, paragraph one of the syllabus. No objection was made to the claimed improper remark. The remark, made only once, cannot be considered a gross and persistent abuse of privilege. Further, the evidence had been admitted that a telephone conversation between Robb and Snow took place. Appellee’s counsel did not comment on the substance of the conversation. Thus, the trial court was not required to intervene sua sponte. Additionally, any error had been waived since there was no objection by appellant’s counsel. See id. at 38, 44 O.O. 2d at 22, 238 N.E. 2d at 569.

In reviewing whether the amount of punitive damages awarded was reasonable in relation to the compensatory damages, we note that appellee’s actual damages were $250 plus attorney fees. Also, appellant’s net worth was calculated to be $568,168. Ultimately, the jury awarded the appellee $150,000 in punitive damages.

We initially note that, generally, the amount of punitive damages to be awarded rests largely within the determination of the trier of fact. Saberton v. Greenwald (1946), 146 Ohio St. 414, 32 O.O. 454, 66 N.E. 2d 224; Alessio v. Hamilton Auto Body, Inc. (1985), 21 Ohio App. 3d 247, 21 OBR 264, 486 N. E. 2d 1224; Gray v. General Motors Corp. (1977), 52 Ohio App. 2d 348, 6 O. O. 3d 396, 370 N.E. 2d 747, paragraph four of the syllabus. Furthermore, the trial judge is in the best position to determine whether an award is so excessive as to be deemed a product of passion or prejudice, Fromson & Davis Co., supra; Institute of Veterinary Pathology, Inc. v. California Health Laboratories, Inc. (1981), 116 Cal. App. 3d 111, 172 Cal. Rptr. 74; 22 American Jurisprudence 2d (1988) 1082, Damages, Section 1032, or to require remit-titur, Larrissey v. Norwalk Truck Lines, Inc. (1951), 155 Ohio St. 207, 219, 44 O.O. 238, 243, 98 N.E. 2d 419, 426; Lance v. Leohr (1983), 9 Ohio App. 3d 297, 298, 9 OBR 544, 459 N.E. 2d 1315. As stated in Goodyear Tire & Rubber Co. v. Marhofer (1930), 38 Ohio App. 143,176 N.E. 120, paragraph eleven of the syllabus, an “[a]ppellate court hesitates to enter remittitur or set aside [a] jury’s verdict, supported by creditable proof, as excessive, in [the] absence of passion or prejudice evidenced by [the] record.” See, generally, 22 American Jurisprudence 2d (1988) 1067-1070, Damages, Sections 1021-1022.

Low compensatory damages and high punitive damages assessed by a jury are not in and of themselves cause to reverse the judgment or to grant a remittitur, since it is the function of the jury to assess the damages and, generally, it is not for a trial or appellate court to substitute its judgment for that of the trier of fact. A large disparity, standing alone, is insufficient to justify a court’s interference with the province of the jury. Fromson & Davis Co., supra. SEe, e.g., Grybauskas v. Associated Estates Corp. (1976), 51 Ohio App. 2d 231, 5 O.O. 3d 363, 367 N.E. 2d 881 (compensatory damages of $47.95 and punitive damages of $20,000 allowed to stand where defendants attempted to collect money on a claim which they knew was invalid arising from an alleged breach of contract); Alessio, supra (defendant Hamilton Auto Body assessed $33,000 compensatory damages, defendant Robert Hamilton assessed $1 compensatory damages and $30,000 punitive damages; punitive damages held not an abuse of the jury’s discretion).

As for appellant’s conduct in relation to the appellee’s injuries, there was substantial evidence to support the punitive damages award in light of appellant’s behavior which exhibited a total disregard for the law and the rights of appellee.

We, therefore, conclude that under the facts before us the jury’s award of punitive damages was not excessive.

Ill

The appellant contends that the award of attorney fees was rendered in the absence of any evidence submitted to the jury on the reasonableness of such fees. Specifically, the jury was not provided with the amount of time ap-pellee’s counsel spent addressing his client’s case. Also, the jury was not told what appellee’s counsel ordinarily receives for his services, or what attorneys similarly situated receive for their services. Rather, the appellant notes that the jury was left to guess what appellee’s attorney fees should have reasonably been.

In directing our focus on attorney fees, we are aware that Ohio law has provided that “ ‘[i]f punitive damages are proper, the aggrieved party may also recover reasonable attorney fees.’ ” Hutchinson v. J.C. Penney Cas. Ins. Co. (1985), 17 Ohio St. 3d 195, 200, 17 OBR 432, 436, 478 N.E. 2d 1000, 1004, citing Columbus Finance, Inc., supra, at 183, 71 O.O. 2d at 177, 327 N.E. 2d at 658; see, also, Locafrance United States Corp. v. Interstate Dist. Serv., Inc. (1983), 6 Ohio St. 3d 198, 202, 6 OBR 252, 256, 451 N.E. 2d 1222,1226. The factors to consider when awarding attorney fees are “ ‘* * * (1) the time and labor involved in maintaining * * * [the] litigation, (2) the novelty, complexity, and difficulty of the questions involved, (3) the professional skill required to perform the necessary legal services, (4) the experience, reputation, and ability of the attorneys, and (5) the miscellaneous expenses of * * * [the] litigation.’ ” Hutchinson, supra, at 200, 17 OBR at 437, 478 N.E. 2d at 1005, citing State, ex rel. Montrie Nursing Home, Inc., v. Creasy (1983), 5 Ohio St. 3d 124,128, 5 OBR 258, 262, 449 N.E. 2d 763, 767. Additional factors to consider are “[t]he fee customarily charged in the locality for similar legal services” and “[t]he amount involved and the results obtained.” DR 2-106(B), Code of Professional Responsibility. Also, there must be evidence presented at trial concerning the proper measure of attorney fees in order to allow an award. Hutchinson, supra.

In the case sub judice, there is no substantive evidence contained in the trial record concerning the value of ap-pellee’s attorney fees in accordance with the Hutchinson rationale. The jury was left to speculate what reasonable attorney fees should be. Consequently, the award cannot stand without some evidentiary support pursuant to Hutchinson. We therefore must reverse the award of attorney fees and remand for a redetermination of such fees.

IV

In turning our attention to the propriety of prejudgment interest in the current case, we are led to R.C. 1343.03(C), which provides in pertinent part that:

“Interest on a judgment * * * [or] decree * * * for the payment of money rendered in a civil action based on tor-tious conduct * * * shall be computed from the date the cause of action accrued to the date on which the money is paid, if * * * the court determines at a hearing held subsequent to the verdict or decision in the action that the party required to pay the money failed to make a good faith effort to settle the case and that the party to whom the money is to be paid did not fail to make a good faith effort to settle the case.”

This court has held that a party does not fail to make a good faith effort to settle, pursuant to R.C. 1343.03(C), when he or she has “(1) fully cooperated in discovery proceedings, (2) rationally evaluated his risks and .potential liability, (3) not attempted to unnecessarily delay any of the proceedings, and (4) made a good faith monetary settlement offer or responded in good faith to an offer from the other party.” Kalain v. Smith (1986), 25 Ohio St. 3d 157,159, 25 OBR 201, 203, 495 N.E. 2d 572, 574. If a party holds an objectively reasonable belief that he has no liability, “he need not make a monetary settlement offer.” Id. Furthermore, a lack of good faith means more than poor judgment or negligence; rather, it imports a dishonest purpose, conscious wrongdoing or ill will in the nature of fraud. Ware v. Richey (1983), 14 Ohio App. 3d 3, 9, 14 OBR 6, 12, 469 N.E. 2d 899, 905.

Additionally, in Bailey v. Container Corp. of America (S.D. Ohio 1986), 660 F. Supp. 1048, 1056, the federal district court, construing R.C. 1343.03(C), reasoned that where an award of punitive damages is “ ‘over and above the amount adequate to compensate’ ” the plaintiff, there is no need to award prejudgment interest on the punitive damages in order to compensate the plaintiff for the delay in payment.

Similarly, it has been stated: “Awarding prejudgment interest on punitive damages * * * [would serve] neither the compensatory purposes of prejudgment interest nor the exemplary purposes of punitive damages. Prejudgment interest is purely compensation for the plaintiff’s lost use of funds after its cause of action accrues and before its recovery; under R.C. § 1343.03(C), that compensatory payment of prejudgment interest is due only when the defendant, through its lack of good faith effort to settle the case, is partially responsible for the delay in plaintiff’s recovery of the compensatory damages. But because an award of punitive damages is ‘over and above the amount adequate to compensate’ the plaintiff, Ranells [v. Cleveland (1975), 41 Ohio St. 2d 1, 7, 70 O.O. 2d 1, 4, 321 N.E. 2d 885, 889], supra, there is no need to award prejudgment interest on the punitive damages in order to compensate the plaintiff further for a delay in payment.” (Emphasis sic.) Presrite Corp. v. United Steelworkers of America (June 6, 1985), Cuyahoga App. No. 48113, unreported, at 45.

Consequently, because punitive damages over and above the amount adequate to compensate the plaintiff were awarded, prejudgment interest to compensate for delay in payment was unnecessary and the award of prejudgment interest must be vacated.

Accordingly, for the reasons set forth in this opinion, we affirm the court of appeals as to the verdict of $250 for compensatory damages and $150,000 for punitive damages but we reverse the judgment of the court of appeals and remand the cause to the trial court for a determination of attorney fees. Lastly, the judgment of the court as to the award of prejudgment interest is reversed and the award is hereby vacated.

Judgment affirmed in part, reversed in part and cause remanded.

Sweeney, Douglas and H. Brown, JJ., concur. Moyer, C.J., and Wright, J., concur in part and dissent in part. Holmes, J., dissents in part and concurs in part.

2 The quantum of proof which was required for an award of punitive damages at common law was a “preponderance of the evidence.” Johnson v. Stackhouse Oldsmobile, Inc. (1971), 27 Ohio St. 2d 140, 143, 56 O.O. 2d 78, 79, 271 N.E. 2d 782, 784. In recognizing the nature of punitive damages as well as the potential for their misapplication, the General Assembly recently enacted R.C. 2315.21(C)(3), which raises the quantum of proof required of the plaintiff to “clear and convincing evidence” in all cases where punitive damages are awarded, except where otherwise provided for by statute. (Am. Sub. H.B. No. 1, effective January 5, 1988.)