Wells v. Smith

• Decision Date: 18 November 1982
• Docket Number: No. 15243,15243
• Citation: 297 S.E.2d 872,171 W.Va. 97
• Court: West Virginia Supreme Court
• Parties: Arthur A. WELLS, et al. v. Robert Allen SMITH, et al, etc.

Page 872

297 S.E.2d 872

171 W.Va. 97

Arthur A. WELLS, et al. v. Robert Allen SMITH, et al, etc.

No. 15243.

Supreme Court of Appeals of West Virginia.

Nov. 18, 1982.

Syllabus by the Court

1. "In actions of tort, where gross fraud, malice, oppression, or wanton, willful, or reckless conduct or criminal indifference to civil obligations affecting the rights of others appear, or where legislative enactment authorizes it, the jury may assess exemplary, punitive or vindictive damages ...." Syllabus Point 4, in part, Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58 (1895).

2. In assessing punitive damages, the trier of fact should take into consideration all of the circumstances surrounding the particular occurrence including the nature of the wrongdoing, the extent of harm inflicted, the intent of the party committing the act, the wealth of the perpetrator, as well as any mitigating circumstances.

3. Where there is evidence implicating the defendant as an active participant in a tortious plan or scheme which deliberately disregards the rights of others, and the jury returns compensatory damages against some of those involved in the scheme, the failure of the jury to return an award of compensatory damages against a particular defendant will not of itself allow that defendant to escape liability for punitive damages assessed against him.

William T. Fahey, Raymond A. Hinerman, Barnes, Watson, Cuomo & Fahey, Weirton, for appellants.

Leonard Z. Alpert, Weirton, for appellees.

McGRAW, Justice:

Arthur and Roberta Wells appeal two orders of the Circuit Court of Hancock County, one granting the motion of the appellee, John Settimio, to set aside a verdict awarding $10,000 punitive damages to the appellants, and one denying the appellants' motion for a new trial and for judgment notwithstanding the verdict. The appellants contend that the verdict against Settimio was improperly struck by the trial court. They pray that the judgment against Settimio be reinstated, or in the alternative, that they be granted a new trial on the issue of Settimio's liability. We find that the $10,000 verdict for punitive damages was improperly struck by the trial court. Because of our ruling on this point we do not address the appellants' other assignments of error. ¹

This litigation originated in a civil action brought by the appellants to recover damages incurred as the result of the theft of more than $200,000 worth of jewelry and rare coins. The evidence presented by the appellants at trial shows that in August, 1977, three juveniles removed a wall safe from the appellants' home. Appellee Gary R. Gillespie, an uncle of one of the juveniles, was enlisted to open the safe after the juveniles' own attempts to open it were unsuccessful. Gillespie divided the jewelry and coins he found inside the safe between one of the juveniles and himself.

Gillespie subsequently contacted appellee Louis Pilotti to arrange a sale of his share of the jewelry. Pilotti arranged a meeting between Gillespie and appellee Eddie Klein, a wholesale jewelry distributor from Pittsburgh. The jewelry was delivered to Klein at Jo-Jon's Restaurant, a sandwich shop and discount store owned and operated by appellee John Sittimio. Pilotti, Klein and Sittimio were all former acquaintances and occasional business associates. Klein's payment of $11,500 for the stolen merchandise was delivered to Gillespie by Pilotti at the Cactus Bar, Pilotti's place of business. Settimio was present both at the meeting at Jo-Jon's Restaurant and at the Cactus Bar when the payment was delivered. Pilotti received $1500 of the $11,500 from Gillespie for arranging the deal with Klein.

The investigation of the theft from the appellants' home resulted in the arrest of Gillespie on charges of receiving stolen goods. ² After his arrest, Gillespie agreed to cooperate with the authorities in an attempt to retrieve the stolen merchandise. He subsequently contacted Pilotti to arrange an exchange of the jewelry for $15,000 in "ransom" money which the appellants agreed to supply. Pilotti's fee for arranging the exchange was $2000. Deputy Joseph Geiss of the Hancock County Sheriff's Department was chosen by the authorities to deliver the ransom money.

Deputy Geiss met with Pilotti and Settimio at a restaurant in southwestern Pennsylvania. Settimio claims that Pilotti requested that he come along on the ransom attempt in order to verify that the jewelry they received was authentic, and that he was to receive $1000 for his services. Settimio further claims he was qualified for this job because he had previous experience valuing precious stones in connection with his discount store. At the meeting, Pilotti informed Deputy Geiss that the exchange was to be made with an unnamed person in Pittsburgh. Using Settimio's car, the three began their trip to Pittsburgh. The ransom attempt was aborted, however, when the car headed into downtown Pittsburgh and concern for the safety of Deputy Geiss prompted Hancock County Sheriff Ronald Donell, who along with West Virginia and Pennsylvania State Police had been following Geiss, to order Settimio's car stopped. Pilotti and Settimio were arrested at this time and charged with criminal conspiracy. These charges were later dropped by Pennsylvania authorities.

The appellants' complaint named as defendants the three juveniles, their parents, Gillespie, Pilotti, Klein, Settimio and several other individuals. This appeal is concerned only with appellee Settimio. The jury returned verdicts of $155,000 compensatory and $10,000 each punitive damages against the juveniles and Gillespie, and $150,000 compensatory and $10,000 each punitive damages against Pilotti and Klein. The jury returned a general verdict in favor of appellee Settimio, but assessed him with $10,000 in punitive damages. Upon hearing the verdict, counsel for the appellants requested that the jury be sent back for deliberations due to the inconsistencies in its disposition of the claims against Settimio. This request was denied by the trial court and the jury dismissed. The judge subsequently struck the $10,000 verdict against Settimio upon motion of defense counsel.

The appellee contends that the ruling by the trial court is correct in light of the established rule in West Virginia that "[a] finding of compensatory damages by a jury is an indispensable predicate to a finding of exemplary or punitive damages, and damages awarded by way of punishment must bear a reasonable proportion to compensatory damages so found." Syllabus Point 3, Toler v. Cassinelli, 129 W.Va. 591, 41 S.E.2d 672 (1946); see also Spencer v. Steinbrecher, 152 W.Va. 490, 164 S.E.2d 710 (1968); Raines v. Faulkner, 131 W.Va. 10, 48 S.E.2d 393 (1947); Ennis v. Brawley, 129 W.Va. 621, 41 S.E.2d 680 (1946). The appellee argues that the general verdict in favor of Settimio below should be interpreted as a jury finding that he was not a participant in the events causing the appellants' loss, and that therefore he was found not liable for compensatory damages, precluding an award of punitive damages.

The appellants, on the other hand, argue that the rule stated in Toler does not address the factual and legal circumstances of a case of this nature where substantial actual damages are proven and assessed against codefendants. They urge the Court to adopt a rule to the effect that where a claim for actual damages is sufficiently pleaded and proved, the failure of the jury to allow compensatory damages does not require an award of exemplary or punitive damages to be set aside. We find merit in the appellants' argument.

Damages awarded to punish a wrongdoer for a wilful, wanton, reckless or malicious act and to deter others from similar conduct have a long history in Anglo-American jurisprudence. The English case generally cited as establishing such awards is Huckle v. Money, 2 Wils. 205, 95 Eng.Rep. 768 (1763), an action for trespass, assault and imprisonment. In Huckle the court refused a motion for a new trial on the ground of excessive damages, reasoning that while the injury done to the plaintiff may have been small, the nature of the defendant's conduct justified an award of "exemplary damages." See 1 T. Sedgwick, A Treatise on the Measure of Damages § 350 (9th ed. 1913). It has been stated, however, that the court in Huckle did not establish a new rule of damages, but rather simply adhered to the ancient English principle of affording the jury wide discretion in the determination of the amount of damages in tort cases. 1 T. Sedgwick, supra, at § 349. Thus, well into the twentieth century, it could be said: "In England, where exemplary damages had their origin, it is still not entirely clear whether the accepted theory is that they are a distinct and strictly punitive element of the recovery, or they are merely a swollen or 'aggravated' allowance of compensatory damages permitted in cases of outrage." C. McCormick, Handbook on the Law of Damages § 78 (1935) (footnote omitted).

Whatever the rule in England, in America punitive damages became an element distinct from compensatory damages. C. McCormick, supra; see also 1 T. Sedwick, supra, at 351-352; K. Redden, Punitive Damages § 2.3 (1980). In the United States, exemplary or punitive damages are generally defined as:

damages which are given as an enhancement of compensatory damages because of the wanton, reckless, malicious, or oppressive character of the acts complained of. Such damages go beyond the compensatory damages suffered in the case; they are allowed as a punishment of the defendant and as a deterrent to others.

22 Am.Jur.2d, Damages § 236 (1965) (footnotes omitted).

The great majority of American jurisdictions permit the recovery of punitive damages in some form. See C. McCormick, supra; K. Redden, supra, at § 2.1; 2 J. Sutherland, A Treatise on the Law of Damages §§ 391-393 (4th ed. 1916); W. Prosser, Handbook of the Law of Torts § 2 (4th ed. 1971). However, it is widely held...