Aero Intern. Corp. v. Florida Nat. Bank of Miami, s. 81-1925

• Citation: 437 So.2d 156
• Decision Date: 19 July 1983
• Docket Number: Nos. 81-1925,81-1930,s. 81-1925
• Parties: AERO INTERNATIONAL CORPORATION, Appellant/Cross-Appellee, v. FLORIDA NATIONAL BANK OF MIAMI, Appellee/Cross-Appellant.
• Court: Court of Appeal of Florida (US)

Page 156

437 So.2d 156

AERO INTERNATIONAL CORPORATION, Appellant/Cross-Appellee, v. FLORIDA NATIONAL BANK OF MIAMI, Appellee/Cross-Appellant.

Nos. 81-1925, 81-1930.

District Court of Appeal of Florida,

Third District.

July 19, 1983.

Rehearing Denied Sept. 28, 1983.

Bedell, Bedell, Dittmar & Zehmer and C. Harris Dittmar, Jacksonville, for appellant/cross-appellee.

Paige & Catlin, Podhurst, Orseck, Parks, Josefsberg, Eaton, Meadow & Olin and Joel S. Perwin, Miami, for appellee/cross-appellant.

Before SCHWARTZ, C.J., HENDRY, J., and OWEN, WILLIAM C., Jr., Associate Judge.

OWEN, WILLIAM C., Jr., Associate Judge.

The principal issue in this case (in which plaintiff-appellant had alleged that the defendant-appellee had converted certain funds entrusted to it under an escrow agreement) is whether the trial court erred in setting aside a jury award of punitive damages on the finding that "there was no support in the competent evidence of record that the Bank's conduct in this case was so malicious or outrageous that its retention of the funds would warrant or justify an award for punitive damages." We conclude that the court did so err.

To set the stage for this suit we need to mention briefly prior litigation in which appellant, Aero International Corporation ("International"), had been involved.

At an earlier date International had entered into a contract with the Republic of Colombia for the repair and overhaul of two of its C-130 military transport airplanes, which repair work International in turn had subcontracted to Aero Corporation ("Aero"). International and Aero became involved in litigation over the subcontract. That suit was settled. The settlement included a requirement that International place in escrow with appellee, Florida National Bank of Miami ("Bank") $650,000.00 of the funds advanced by the Republic of Colombia under its contract with International. The escrow agreement provided, in substance, that the funds were to be used to cover the costs of such repairs as might be found necessary after a complete inspection of the two airplanes, with any unused portion to be paid to the Republic of Colombia upon the order of and pursuant to directions from International. A memorandum addendum to the escrow agreement provided, among other things, that interest earned on the escrow account accrued to the benefit of International and was to be deposited quarterly into its checking account with the Bank.

International deposited the required funds in escrow with the Bank. However, before the first quarterly interest payment was due, the Republic of Colombia filed suit against International and obtained an order enjoining withdrawal of any of the escrowed funds. At the same time, counsel for Republic of Colombia notified the Bank that should it disburse any funds in furtherance of the escrow agreement it would be held liable to the Republic of Colombia.

When the first quarterly interest payment became due, the Bank, in order to protect itself from any liability, and relying upon (1) a provision of the escrow agreement permitting it to retain escrowed funds pending resolution of any conflict over the funds, (2) its understanding of the breadth and intent of the injunctive order, and (3) advice of its own counsel, refused to credit to International's checking account the earned interest until such time as the conflicting claims were resolved. The Bank maintained its position despite International's insistence that neither the exculpatory provision of the escrow agreement nor the injunctive order applied to the earned interest, and despite International's repeated admonitions to the Bank that the latter's actions were in violation of its contract and were causing International serious financial hardship in its survival for existence during the ongoing litigation.

Nearly two years later, with Republic of Colombia's suit still pending and with the Bank unrelenting in its position, International brought this action for conversion. Upon trial the jury returned its verdict awarding both compensatory and punitive damages. Judgment was entered on the verdict. However, on post-trial motions, the judgment was vacated, a directed verdict was entered for the Bank on the punitive damage award, and a remittitur or new trial ordered on the compensatory damage award. International accepted the remittitur but has appealed the order taking away punitive damages, and the Bank has cross appealed the denial of its motion for directed verdict on liability and its alternative motion for a new trial on damages. As stated at the outset, we view the primary issue as being whether the trial court erred in vacating the award of punitive damages.

International first contends that the order is legally insufficient because the bases for an award of punitive damages are not limited to conduct that is "malicious or outrageous" (referring to the language appearing in the court's order), but also include willful, tortious acts done with total and wanton disregard for the rights of or effect on the plaintiff. It is certainly correct that "a legal basis for punitive damages exists where torts are committed in an outrageous manner or with fraud, malice, wantonness or oppression," Wackenhut Corp. v. Canty, 359 So.2d 430, 435 (Fla.1978). However, we do not deem the trial court's order facially insufficient because of its failure to recite the full litany of each and every basis of punitive damages when it is apparent...