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Cleghorn v. N.Y. C. & H. R. R. Co. - 56 N.Y. 44 (1874)

Rule:

Gross misconduct may be established by showing that the act of the servant was authorized or ratified, or that the master employed or retained the servant, knowing that he was incompetent, or, from bad habits, unfit for the position he occupied. Something more than ordinary negligence is requisite; it must be reckless and of a criminal nature, and clearly established. 

Facts:

Plaintiff Mary Cleghorn was a passenger on a train owned and operated by defendant New York Central and Hudson River Railroad Company ("Railroad"). Cleghorn was injured when the Railroad's employee, a switchman, neglected to close a switch after a stock train had passed onto a side track, which caused the two trains to collide. Cleghorn filed a negligence action in New York state court seeking to recover damages for her injuries. At trial, Cleghorn presented evidence that the switchman was intoxicated at the time of the accident, that he had intemperate habits and that the Railroad was aware of those habits. A jury rendered a verdict for Cleghorn. Judgment was entered on the verdict, and Cleghorn was awarded punitive damages. The Railroad appealed. 

Issue:

Was the award of punitive damages proper when there was no finding as to whether the Railroad's behavior constituted gross misconduct?

Answer:

No.

Conclusion:

The Court of Appeals of New York reversed the trial court's judgment. The court ruled that although the Railroad was clearly liable for damages related to Cleghorn's injuries, the jury was not properly charged regarding its ability to award punitive damages. The jury could only properly award punitive damages if it found that the Railroad's conduct in hiring and retaining the switchman as an employee constituted gross misconduct. Because the jury instructions did not clearly indicate that punitive damages could only be awarded if the Railroad's behavior constituted gross misconduct, the jury may have awarded the damages without this necessary finding, which required reversal of the judgment for Cleghorn.

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