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Goff v. Elmo Greer & Sons Constr. Co. - 297 S.W.3d 175 (Tenn. 2009)

Rule:

Compensatory and punitive damage awards serve vastly different purposes. Compensatory damages are intended to compensate an injured plaintiff for personal injury or property damage and thereby make the plaintiff whole again. In contrast, punitive damages are intended to punish a defendant, to deter him from committing acts of a similar nature, and to make a public example of him. Punitive damages are thus appropriate only in the most egregious cases and, consequently, a verdict imposing such damages must be supported by clear and convincing evidence that the defendant acted intentionally, fraudulently, maliciously, or recklessly. Evidence is clear and convincing when it leaves no serious or substantial doubt about the correctness of the conclusions drawn. In other words, the evidence must be such that the truth of the facts asserted be "highly probable."

Facts:

The landowners agreed to let the company use their property to place equipment and construction materials on their land in exchange for compensation. The company buried old tires, spilled oil and caused blasting damage to their house and vehicles. At trial, the parties stipulated that the company was liable for breach of contract in the amount of $5,355.50. A jury then determined that the company was strictly liable for harm caused by its blasting activities in the amount of $9,510, and that burying debris on the property constituted a nuisance for which the company was liable for $3,305. The jury also returned an award of $2 million in punitive damages, which the trial court modified to $1 million. The appellate court reversed the punitive damages award on the grounds that the trial court improperly considered Tennessee's environmental laws in approving the award.

Issue:

Did the trial court err in awarding punitive damages to the owners of the property?

Answer:

No.

Conclusion:

According to the Court, to guide trial courts in a review of whether punitive damages were appropriate, the Tennessee Supreme Court has identified a number of relevant factors: (1) The defendant's financial affairs, financial condition, and net worth; (2) The nature and reprehensibility of defendant's wrongdoing; (3) The defendant's awareness of the amount of harm being caused and the defendant's motivation in causing the harm; (4) The duration of defendant's misconduct and whether the defendant attempted to conceal the conduct; (5) The expense the plaintiff has borne in the attempt to recover the losses; (6) Whether the defendant profited from the activity, and if defendant did profit, whether the punitive award should be in excess of the profit in order to deter similar future behavior; (7) Whether, and the extent to which, the defendant has been subjected to previous punitive damages awards based upon the same wrongful act; (8) Whether, once the misconduct became known to the defendant, the defendant took remedial action or attempted to make amends by offering a prompt and fair settlement for actual harm caused; and (9) Any other circumstances shown by the evidence that bear on determining the proper amount of the punitive award. In the case at bar, the Court held that there was evidence supporting the jury’s award of punitive damages, and that the trial court properly considered the evidence. However, the Court ruled that the amount of the punitive damages award violated the construction company’s due process rights, as the award was excessive.

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