Brookridge Party Center, Inc. v. Fisher Foods, Inc.

• Decision Date: 06 September 1983
• Citation: 468 N.E.2d 63,12 OBR 451,12 Ohio App.3d 130
• Parties: , 12 O.B.R. 451 BROOKRIDGE PARTY CENTER, INC., Appellee, v. FISHER FOODS, INC., Appellant, et al.
• Court: Ohio Court of Appeals

Page 130

12 Ohio App.3d 130

468 N.E.2d 63, 12 O.B.R. 451

BROOKRIDGE PARTY CENTER, INC., Appellee, v. FISHER FOODS, INC., Appellant, et al.

Court of Appeals of Ohio Cuyahoga County.

Sept. 6, 1983.

Syllabus by the Court

1. Punitive damages need not be specially pleaded or claimed. They are recoverable if the evidence warrants their allowance and the total amount recovered (compensatory plus punitive damages) does not exceed the amount claimed in the final pretrial pleading. (Civ.R. 54[C].)

2. The jury may assess punitive damages for intentional, reckless, wanton, or grossly negligent conduct which manifests actual malice.

3. An indemnity agreement which states in part, "Lessor shall indemnify and hold harmless Lessee from any liability, loss, cost or damage * * *," is intended to assign anticipatable risks of loss. In a commercial context, negligently caused physical damage and business losses are reasonably foreseeable liability risks and therefore the indemnitor's responsibility. Whether or not punitive damages assessed against the indemnitee for extraordinary misconduct are the responsibility of the indemnitor depends upon the language of the agreement and the surrounding circumstances.

4. Where a party calls an economist as an expert witness to testify as to decreased revenues to support a claim of business losses, his arithmetical calculations are admissible as opinion testimony in the court's discretion. However, he would not be qualified to give an opinion as to the cause of the demonstrated decrease in revenues. (Evid.R. 702.)

Nicholas M. DeVito, Cleveland, for appellee Brookridge Party Center, Inc.

Robert G. Quandt, Cleveland, for appellant Fisher Foods, Inc.

John B. Robertson, Neil E. Roberts and L. Edward York, Cleveland, for appellant Paul Lipman, trustee.

Henry F. DeBaggis, Cleveland, for appellant Bond Constr. Co.

MARKUS, Presiding Judge.

Plaintiff-party center and defendant-grocery store ("Fisher") are tenants in landlord's shopping center, with the party center located beneath the grocery store. The party center obtained a jury verdict against Fisher with compensatory and punitive damages for causing water leakage onto the party center's premises. The jury also found for Fisher on its contribution claim against the builder for defects allegedly causing that leakage, "in the sum of $0." The trial judge separately granted Fisher indemnity from the landlord for all damages, on the basis of a lease provision.

Fisher and the landlord appeal. Fisher asserts: (1) the trial court should not have submitted the punitive damages claim for jury consideration, and (2) the zero verdict against the builder was contrary to the manifest weight of the evidence. The landlord complains: (1) the disputed lease provision did not justify indemnity for Fisher's own negligence or for punitive damages, and (2) the trial court should have submitted a requested jury interrogatory. Both Fisher and the landlord contest rulings which allowed an economist to testify about the party center's decreased revenues.

We affirm the party center's judgment against Fisher for both compensatory and punitive damages, and the judgment on Fisher's contribution claim against the builder. We modify Fisher's judgment against the landlord by eliminating any indemnity for punitive damages.

I. Punitive Damages

Fisher's first two assigned errors challenge the verdict for punitive damages, arguing that plaintiff's pleading made no such claim and no evidence supported it.

A. The Pleading

Punitive damages need not be specially pleaded or claimed. They are recoverable if the evidence warrants their allowance. ¹ Giovinazzi v. Chapman (Aug. 26, 1982), Cuyahoga App. No. 44241, unreported; cf. Raimonde v. Van Vlerah (1975), 42 Ohio St.2d 21, at 26-27, 325 N.E.2d 544 . However, Fisher's brief contends that punitive damages are foreclosed here by Civ.R. 54(C):

" * * * Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled; however, a demand for judgment which seeks a judgment for money shall limit the claimant to the sum claimed in the demand unless he amends his demand not later than seven days before the commencement of the trial. * * * "

Although plaintiff's pleading did not separately claim any amount for punitive damages, it did seek damages in the sum of $1,020,000. The verdict and judgment granted plaintiff $234,500 compensatory damages and $215,500 punitive damages. Thus, the total damages assessed were less than forty-five percent of the amount claimed.

The limitation in Civ.R. 54(C) serves to assure the defendant that recovery cannot exceed the amount claimed in the final pretrial pleading. See Staff Note to Civ.R. 54(C). This plaintiff's judgment did not violate that assurance. Fisher's brief relies on this court's ruling in Roveri v. Zayre Corporation (May 7, 1981), Cuyahoga App. No. 42789, unreported. In Roveri, the panel approved a reduction of compensatory damages to the amount separately claimed for that species of damage, citing Sparks v. Y. & T. Co. (1952), 67 Ohio Law Abs. 47, 118 N.E.2d 691.

Both Roveri and Sparks seem to treat different forms of damage that are separately pleaded as distinct causes of action. By that analysis, a plaintiff would be limited to the amount claimed for each individual cause of action. Without deciding whether that approach has merit in other situations, we conclude that it has no application here. This plaintiff did not assert separate claims in differing amounts for compensatory and punitive damages.

B. The Evidence

The jury may assess punitive damages for intentional, reckless, wanton, or grossly negligent conduct which manifests actual malice. Detling v. Chockley (1982), 70 Ohio St.2d 134, 436 N.E.2d 208 ; Leichtamer v. American Motors Corp. (1981), 67 Ohio St.2d 456, 424 N.E.2d 568 ; Columbus Finance v. Howard (1975), 42 Ohio St.2d 178, 327 N.E.2d 654 .

Factors which tend to show malice include:

(1) The duration of offensive conduct.

(2) An apparent lack of concern for the rights of others.

(3) The availability of alternative methods which would avoid damage to others.

(4) The feasibility of such alternatives.

(5) Knowledge of adverse consequences from that conduct.

(6) The probability that harm will occur to others from that conduct.

See Hawkins v. Ivy (1977), 50 Ohio St.2d 114, at 117-118, 363 N.E.2d 367 ; Gearhart v. Angeloff (1969), 17 Ohio App.2d 143, at 146, 244 N.E.2d 802 ; Schmidt v. Lanz (July 1, 1982), Cuyahoga App. No. 44248, unreported.

In this case, plaintiff presented evidence that the party center sustained water damage from 1976 to 1980. Originally, that water apparently came from condensation when Fisher's freezers and coolers affected poorly insulated water pipes. Despite plaintiff's complaints, plaintiff's witnesses said Fisher repeatedly allowed its freezers to defrost on the open floor. Its freezer doors and hot water tanks leaked. Larger quantities of water reached the party center when Fisher washed its floors with "power hoses."

Plaintiff's evidence showed that Fisher permitted its floor drains to become blocked with meat, fat scraps, and plastic bags. Its personnel removed drain covers and strainers to facilitate their elimination of such materials. Plaintiff's owner testified that they complained hundreds of times, and that Fisher's personnel sometimes responded with callous apathy.

A health department inspector testified that he demonstrated leakage from Fisher to the party center with dye tests. He ordered Fisher to discontinue using power hoses for floor cleaning. Thereafter, Fisher sometimes used hoses and sometimes used alternative floor cleaning procedures which had been available earlier. On one occasion, Fisher refused to turn off water from a broken line for ten to twelve hours because the line serviced its bakery.

During part of this time, the party center incurred daily expense for the replacement of expensive ceiling tiles. It hired extra employees and paid its regular employees overtime to pump water from its premises. The carpet sustained substantial damage. Dripping water disrupted its customers' activities. Although Fisher had knowledge of these problems, plaintiff's evidence showed that Fisher continued the practices which caused them.

Fisher presented contrary evidence, which tended to show an affirmative desire to help the party center's problem, but a need to comply with cleanliness standards. In brief, Fisher contended that its procedures were necessary to its business.

The jury resolved those disputes from conflicting evidence. They believed plaintiff's evidence and found actual malice in accordance with the court's definition of that term. Fisher does not challenge the language used in the court's instructions on this subject. Nor does Fisher contend that the amount of punitive damages was excessive. Rather, Fisher argues that plaintiff presented insufficient evidence for the jury to consider any punitive damages. We conclude that the evidence sufficiently supported those instructions and the resulting verdict.

Fisher's first and second claimed errors are overruled.

II. Landlord's Indemnity Obligation

Fisher sought indemnity from its landlord, claiming that any damage resulted from the landlord's failure to maintain water and sewer lines. Further, landlord accepted certain indemnity obligations by the terms of their lease. The trial court removed this claim from the jury's consideration, deciding that its resolution depended on judicial interpretation of the lease contract. Fisher expressed no objection to that procedure. In its ruling, the trial court found that landlord's indemnity obligation rested solely on the "indemnification agreement contained in the lease."

Both the landlord and Fisher agree that the only lease provision involved is Paragraph 17(b)(6) ².

"Lessor shall indemnify...