« Environment - The Clean Water Act | Main | Law - Nationwide, "Scandals Becoming an Issue in State Races" »

Sunday, October 16, 2005

Ind. Decisions - Court of Appeals finds punitive damages award inappropriate

The Munster (NW Indiana) Times reports today, in a story by Bill Dolan headlined "Appeals court reduces $16M verdict in 1996 crash: High court says punitive damages of $3.4M is excessive," that:

HAMMOND | The Indiana Court of Appeals has reduced a $16 million verdict in an accident that injured a Portage family and killed a Gary woman.

The high court ruled a Lake Superior Court jury erred last year when it awarded punitive damages in the 1996 collision involving the Portage family's car and a moving van at the intersection of Interstate 65 and the Indiana Toll Road in Gary. * * *

Last year's jury awarded $1,145,000 in compensatory damages for the victims' injuries and another $15 million for punitive damages.

The high court stated punitive damages cannot exceed three times the compensatory damage amount. The high court further ruled that even $3.4 million in punitive damages is excessive. A decision on the final award is back in the hands of the trial court judge.

The appeals judges stated there wasn't any evidence Westray was speeding, intoxicated, drowsy or was ignoring the road to talk to someone or listen to the radio.

The Times report, as it turns out, is somewhat belated, as the decision was issued 9/14/05. The case is Ricky Westray, et al v. Delores Wright, et al. Access it here, a 14-page opinion by Judge Baker. Some quotes from the opinion:
Because punitive damages are imposed to deter and punish wrongful activity, they are quasi-criminal in nature and require a different showing than that required for an award of compensatory damages. Cheatham v. Pohle, 789 N.E.2d 467, 471 (Ind. 2003). * * *

According to our Supreme Court, “the perverseness that public policy will permit the courts to punish [by awarding punitive damages] is conscious and intentional misconduct which, under the existing conditions, the actor knows will probably result in injury.” Id. In other words, the defendant must have “subjected other persons to probable injury, with an awareness of such impending danger and with heedless indifference of the consequences.” Id. The tortious conduct must be marked by malice, fraud, gross negligence, or oppressiveness not resulting from “a mistake of law or fact, honest error of judgment, overzealousness, mere negligence or other noniniquitous human failing.” Bud Wolf Chevrolet, Inc. v. Robertson, 519 N.E.2d 135, 137 (Ind. 1988). * * *

In the aggregate, the record reveals a truck driver who was clearly negligent in the operation of his vehicle. Tragically, his negligence resulted in fatalities and forever changed the lives of the survivors. But there is simply not clear and convincing evidence that his behavior exceeded mere negligence. Nothing in the record indicates that he acted purposefully, with malice, or with gross negligence. Charging him with constructive knowledge of the dangerousness of his vehicle is insufficient to reach the mental state that is required to sustain a punitive damages award. Accordingly, we conclude that the jury’s award of punitive damages as to Westray was improper and that the trial court should have granted the appellants’ motion for judgment on the evidence. * * *

The Wrights cross-appeal the trial court’s reduction in the punitive damages award from $15,000,000 to $3,435,000. * * * Inasmuch as we have concluded that the punitive damages award was inappropriate, the arguments that the Wrights raise in their cross-appeal are no longer at issue. * * *

In sum, we conclude as follows: (1) the jury’s finding of negligence with respect to appellants and its corresponding award of compensatory damages are appropriate; and (2) the jury’s award of punitive damages was inappropriate inasmuch as there was not clear and convincing evidence that Westray or Bekins acted with the mental state sufficient to sustain such an award. The judgment of the trial court is affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion. [my emphasis]

Posted by Marcia Oddi on October 16, 2005 08:10 AM
Posted to Ind. App.Ct. Decisions