Ettus v. Orkin Exterminating Co., Inc.

• Decision Date: 10 June 1983
• Docket Number: No. 54467,54467
• Citation: 233 Kan. 555,665 P.2d 730
• Parties: Mary ETTUS, Appellee/Appellant/Cross-Appellant/Cross-Appellee, v. ORKIN EXTERMINATING CO., INC., Appellant/Cross-Appellee, Alfred L. Hohnbaum, Ethel M. Hohnbaum, Appellees/Cross-Appellants, Ken Bueltel d/b/a Ken Bueltel and Associates, Appellee, Daniel Mitchell, Special Administrator for The Estate of Wilbur T. Gorrell, Deceased, Appellee/Cross-Appellant.
• Court: Kansas Supreme Court

Page 730

665 P.2d 730

233 Kan. 555

Mary ETTUS, Appellee/Appellant/Cross-Appellant/Cross-Appellee, v. ORKIN EXTERMINATING CO., INC., Appellant/Cross-Appellee Alfred L. Hohnbaum, Ethel M. Hohnbaum, Appellees/Cross-Appellants Ken Bueltel d/b/a Ken Bueltel and Associates, Appellee Daniel Mitchell, Special Administrator for The Estate of Wilbur T. Gorrell, Deceased, Appellee/Cross-Appellant.

No. 54467.

Supreme Court of Kansas.

June 10, 1983.

Syllabus by the Court

1. Negligence is the lack of ordinary care. It is the failure of a person to do something that an ordinary person would do, or the act of a person in doing something that an ordinary person would not do, measured by all of the circumstances then existing. PIK Civ.2d 3.01.

2. In ruling on a motion for directed verdict pursuant to K.S.A. 60-250, the court is required to resolve all facts and inferences reasonably to be drawn from the evidence in favor of the party against whom the ruling is sought, and where the evidence is such that reasonable minds could reach different conclusions thereon, the motion must be denied and the matter submitted to the jury. The same basic rule governs appellate review of a motion for directed verdict. Following Guarantee Abstract & Title Co. v. Interstate Fire & Cas. Co., 228 Kan. 532, Syl. p 3, 618 P.2d 1195 (1980).

3. A pretrial order, unless modified by the court to prevent manifest injustice, controls the subsequent course of the lawsuit.

4. One who commits a tortious act is liable for the injury and loss that are the natural and probable result of the wrongful act.

5. Jury instructions are to be considered together and read as a whole, without isolating any one instruction.

6. The provisions of S.Ct. Rule 118(a) and (b) (230 Kan. lxxix-lxxx) set forth the procedure to be followed in complying with K.S.A. 60-208(a) and apply only to the written statement of damages contemplated by Rule 118(a). The rule does not preclude an attorney from utilizing a blackboard or chart in final argument to illustrate amounts requested for actual or punitive damages so long as the figures are based upon evidence adduced at the trial.

7. The defendant's financial circumstances are relevant to the issue of punitive damages. Following Ayers v. Christiansen, 222 Kan. 225, Syl. p 4, 564 P.2d 458 (1977).

8. Before a jury verdict will be upset on appeal for alleged misconduct of the trial court, actual prejudice must be shown and the mere possibility of prejudice is not sufficient to overturn the verdict.

9. Evidence of offers of settlement and pretrial settlement negotiations is generally inadmissible.

10. Evidence of an offer of compromise or settlement which is inadmissible as a basis for an inference of liability may be admissible on other grounds such as when it contains an admission of fact.

11. Punitive damages are imposed by way of punishing a party for malicious or vindictive acts or for a wilful and wanton invasion of another party's rights, the purpose being to restrain him and to deter others from the commission of like wrongs. Following Henderson v. Hassur, 225 Kan. 678, Syl. p 9, 594 P.2d 650 (1979).

12. Evidence of other acts of the defendant, either preceding or following the particular acts alleged and for which damages are sought, is admissible if so connected with the particular acts as tending to show defendant's disposition, intention, or motive in the commission of the particular acts for which damages are claimed.

13. In assessing punitive damages the nature, extent and enormity of the wrong, the intent of the party committing it, and generally all circumstances attending the transaction involved should be considered. Any mitigating circumstances which may bear upon any of the above factors may be considered to reduce such damages. In fixing an award of punitive damages a jury may consider the amount of actual damages recovered, defendant's financial condition and the probable litigation expenses, including attorney fees.

14. Absent unusual circumstances, evidence of settlement offers and negotiations is inadmissible even when offered for the limited purpose of defending against a claim for punitive damages.

Gary D. McCallister, of Davis, Unrein, Hummer & McCallister, Topeka, argued the cause, and Charles L. Davis, Jr., Topeka, of the same firm, was with him on brief, for appellant/cross-appellee, Orkin Exterminating Co., Inc.

Thomas W. Regan, Topeka, argued the cause and was on the brief, for appellees/cross-appellants, Alfred L. and Ethel M. Hohnbaum.

Alan V. Johnson, of Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, argued the cause, and Myron L. Listrom, Topeka, of the same firm, was with him on the brief, for appellees/cross-appellants Daniel Mitchell, Special Administrator for the Estate of Wilbur T. Gorrell, and appellee Ken Bueltel, d/b/a Ken Bueltel and Associates.

George E. Erickson, Jr., Topeka, argued the cause and Leonard M. Robinson, Topeka, was with him on the brief, for appellee/appellant/cross-appellant/cross-appellee, Mary Ettus.

HOLMES, Justice:

This is an appeal from a jury verdict, and judgments entered thereon, in favor of the plaintiff/buyer and the former owners of the real property involved in an action for actual and punitive damages based upon allegations of fraud and negligence in the sale of a termite-ridden house to the plaintiff. In April, 1978, the plaintiff Mary Ettus bought a home in North Topeka from Alfred L. and Ethel M. Hohnbaum (Hohnbaums) through the Ken Bueltel real estate agency (Bueltel) and one of its salesmen, Wilbur T. Gorrell (Gorrell). Prior to trial Mr. Gorrell died and plaintiff secured the appointment of Daniel Mitchell as special administrator of his estate. The house had been inspected and certified termite-free by Orkin Exterminating Co., Inc. (Orkin).

When it was determined by Mrs. Ettus shortly after purchasing the house that it was infested with live termites and damaged beyond repair, she brought suit based upon claims of fraud and negligence against the Hohnbaums, Bueltel, Gorrell and Orkin. The Hohnbaums filed a cross-claim against Orkin for fraud. After a two week trial the jury found against the plaintiff as to all the defendants on her claim for fraud. However, the jury found in plaintiff's favor on her claim for negligence and awarded actual damages of $33,195.00 and punitive damages of $50,000.00. The comparative fault or negligence of the parties was determined to be five percent (5%) against the Hohnbaums and ninety-five percent (95%) against Orkin. The plaintiff, Bueltel and Gorrell were found to be without negligence. Other parties named for the purpose of comparing negligence, but not formally joined as parties, were also found to be without fault. The jury also found in favor of the Hohnbaums and against Orkin on the Hohnbaums' cross-claim for fraud and awarded them $410.00 actual damages and $20,000.00 punitive damages. All parties appeal from various aspects of the judgments and trial proceedings.

The Hohnbaums owned residential property on Kansas Avenue in North Topeka where they had resided for some thirty years. In April, 1976, Mr. Hohnbaum first became aware of termites on his property and promptly contacted Orkin. After an inspection of the premises by Orkin, the Hohnbaums entered into a contract for subterranean treatment of termites. The inspection had revealed live termites and damage although the written graph and information furnished by Orkin did not reveal the extensive damage which existed. The Hohnbaums paid Orkin $410.00 for the initial contract and treatment which carried with it a guarantee and a right to subsequent regular inspections and a lifetime retreatment contract. The initial treatment was performed by Orkin in April, 1976. In July of the same year the Hohnbaums, while painting, discovered additional termite infestation. Orkin was called and they again treated the area. On August 26th, an additional treatment was required. Thereafter, the Hohnbaums kept the contract current and in force by payment of an annual fee of $45.00.

In early 1978, the Hohnbaums desired to sell their home and listed it with Bueltel. One of the Bueltel salesmen, Mr. Gorrell, showed the property to Mrs. Ettus and on February 23, 1978, she signed a purchase contract with the Hohnbaums in the amount of $21,000.00. The contract contained the following provision:

"Seller agrees to obtain and pay for a termite inspection of said property by a state licensed pest control company and furnish Purchaser a report from said company showing the property to be free of termite infestation; provided, however, if termite infestation is present, Seller may, at his option, pay for treatment and removal of said infestation and pay for repair or damage caused thereby or elect to cancel this contract and all moneys paid hereunder on the purchase price shall be refunded to Purchaser, and thereupon, all parties shall be released from further liability hereunder."

Thereafter Orkin furnished a "wood infestation report" dated April 6, 1978, which found no visible evidence of active or previous infestation and no visible damage to the property. The report also stated that Orkin had treated the property in April, 1976, and that it remained under a guarantee and contract with Orkin. This report was placed in Gorrell's file and was a part of the papers available at the closing of the sale. Sometime between April 7, 1978, and April 24, 1978, some flying insects were observed in the Hohnbaum house and Orkin was again called. Orkin responded and again treated the premises. Orkin prepared another "wood infestation report" which indicated there was some evidence of previous termite infestation and evidence of some non-structural damage. The testimony is in dispute whether this report was delivered to the Hohnbaums, or Gorrell or whether it was delivered at all. Mrs. Ettus was never made aware of its contents and, in any event, both reports...