Hollis v. Stonington Dev. Llc

• Decision Date: 17 August 2011
• Docket Number: No. 4869.,4869.
• Citation: 394 S.C. 383,714 S.E.2d 904
• Parties: Glenn Y. HOLLIS, Jr., John E. Hollis, Joseph R. Robinson, and Janette H. Robinson, Respondents,v.STONINGTON DEVELOPMENT, LLC, Appellant.
• Court: South Carolina Court of Appeals

394 S.C. 383

714 S.E.2d 904

Glenn Y. HOLLIS, Jr., John E. Hollis, Joseph R. Robinson, and Janette H. Robinson, Respondents,

v.STONINGTON DEVELOPMENT, LLC, Appellant.

No. 4869.

Court of Appeals of South Carolina.

Heard March 9, 2011.Decided Aug. 17, 2011.

Timothy G. Quinn, of Columbia, for Appellant.H. Freeman Belser and Clinch H. Belser, Jr., both of Columbia, for Respondents.FEW, C.J.

The primary issue in this appeal is whether the trial court erred in imposing punitive damages of $3.5 million against Stonington Development, LLC. We find the trial court properly denied Stonington's motion for a directed verdict as to punitive damages, and we find no reversible error in the charge given to the jury. However, we find the amount of punitive damages is excessive and therefore that due process requires the amount of the award to be reduced. As to all other issues, we affirm.

I. Facts

The plaintiffs are brothers Glenn and John Hollis; Janette Robinson, who is Glenn's daughter; and Janette's husband, Joseph Robinson. The Hollises and Robinsons jointly own approximately nineteen acres of land that has been in the Hollis family for generations. The Robinsons live on the property with their son in a house overlooking two ponds that Glenn, John, and their father built over fifty years ago. The only driveway to the Robinsons' home crosses an earthen dam that divides the three-acre upper pond from the five-acre lower pond.

In 1999, Stonington purchased property directly upstream from the Hollis and Robinson property for the purpose of developing a residential subdivision. The Hollises and Robinsons proved at trial that over the next five years Stonington ignored the recommendations of its own stormwater management engineers; violated State regulations and local laws regarding erosion control and stormwater runoff; and misled them, perhaps even lied, about Stonington's intention to remedy the problems. The result was severe flooding on the Hollises and Robinsons' property, which inhibited the Robinsons' access to their home and filled the ponds with as much as four feet of sediment. The estimated cost to restore the property is over $250,000.00. The jury awarded $400,000.00 in actual damages and $3.5 million in punitive damages. The trial court reduced the actual damages award to $315,000.00 as a setoff to account for funds paid by other settling defendants.

The troubles between the parties began in 2000, shortly before Stonington began construction. At their first meeting, Stonington asked the Robinsons to relinquish easement rights for their driveway and asked if it could put a sewer line through their front yard to serve the development. When the Robinsons refused both requests, Stonington threatened to condemn the land and install the sewer line anyway.¹

Before beginning construction, Stonington hired Power Engineering to prepare stormwater management plans for the subdivision. The Hollises and Robinsons' expert testified that stormwater management is a field of engineering that prevents the type of severe flooding, erosion, and sediment accumulation that eventually occurred on the Hollis and Robinson property. The plans Power Engineering prepared for Stonington included protective measures such as silt fences and detention ponds to catch eroding soil and sediment runoff. Stonington failed to follow the plans, despite its admitted responsibility to do so.

By late 2002, the Hollises and Robinsons started to see silt and sediment coming from the development and accumulating in the ponds. Around the same time, Stonington received its first notice of violation from Richland County, requiring it to alleviate the accumulation in the ponds to avoid penalties. By the spring of 2003, the runoff worsened to the point of causing the ponds to flood the Robinsons' yard and cover part of their driveway with rushing water. The Hollises and Robinsons continually complained to Stonington and asked it to fix the problem. Stonington assured them the problem would be fixed, but failed to take action.

A Stonington employee testified that, as part of its attempt to compromise with the Hollises and Robinsons, Stonington placed a fifty-foot-wide conservation easement on the part of its property bordering the Hollises and Robinsons to provide them with a buffer for protection from the runoff. Stonington told them the buffer increased the size of their property because it could never be used for anything but trees. In direct contravention of that statement, Stonington then removed all of the trees in the “buffer” to install a sewer line for its subdivision. Stonington received a $1 million tax deduction for creating the easement.

After numerous other State and County violation notices and no action from Stonington to alleviate the damage, the Hollises and Robinsons finally filed suit against Stonington and Power Engineering ² on July 29, 2005, for negligence, trespass, private nuisance, and violation of the Unfair Trade Practices Act. By then, the runoff from Stonington caused the back of the dam on the upper pond to collapse, and the sediment in the pond had accumulated as deep as four feet in some locations. Even after the lawsuit was filed, Stonington received violation notices from Richland County directing it to protect the ponds from stormwater runoff.

At trial, the Hollises and Robinsons' expert in stormwater management testified that Stonington did not follow Power Engineering's stormwater management plans and failed to maintain the limited stormwater management system it did build. Stonington's only representative to testify at trial admitted it was responsible for complying with the stormwater management plans. The Hollises and Robinsons' expert testified that while the Hollises and Robinsons may still have experienced some problems if Stonington had followed the plans and maintained the system, the problems would have been “significantly” less serious. The expert gave an example of Stonington's failure to follow the plans. He explained that the stormwater system as designed includes a temporary check dam to catch sediment after a rainstorm. The system then requires the check dam be cleaned out and the sediment hauled elsewhere. The expert said Stonington cleaned out the sediment, but then “piled it right on the slope right above it[,] ... obviously making it available for a source of erosion the next time it rains.”

The Hollises and Robinsons presented evidence that the cost of repairing the damage caused by Stonington and restoring the ponds to their previous condition is $254,384.00,³ in addition to the $9,813.76 in expenses they incurred before the trial. They also established damages for loss of use and enjoyment of the ponds. For example, Glenn testified the fishing in the ponds is now bad, the children cannot swim in the mud, and they can no longer access areas of the ponds due to the sediment accumulation.

II. Procedural History

At the end of a five-day trial, the jury returned a defense verdict for Power Engineering, but found for the Hollises and Robinsons against Stonington for negligence, trespass, and private nuisance.⁴ The jury awarded $400,000.00 in actual damages and $3.5 million in punitive damages. After the verdict, the Hollises and Robinsons elected the private nuisance cause of action. Stonington filed a post-trial motion for judgment notwithstanding the verdict or, in the alternative, new trial absolute or new trial nisi remittitur. The trial court denied the motion and, after conducting a review of the punitive damages award, upheld the constitutionality of the amount of the award. Stonington appeals alleging the trial court erred in (1) denying its motion for a directed verdict on punitive damages, (2) giving an erroneous jury charge on punitive damages, (3) imposing a punitive damages award that violates Stonington's due process rights, and (4) denying its post-trial motion for judgment or a new trial. We affirm the award of punitive damages and the denial of Stonington's post-trial motion. However, we find the amount of the punitive damages award to be excessive, and reduce the award to $2 million.

III. Directed Verdict on Punitive Damages

When ruling on a directed verdict motion as to punitive damages, “the circuit court must view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the nonmoving party.” Mishoe v. QHG of Lake City, Inc., 366 S.C. 195, 200, 621 S.E.2d 363, 366 (Ct.App.2005) (finding sufficient evidence to submit the issue of punitive damages to the jury). “In reviewing the denial of a motion for directed verdict ..., the appellate court applies the same standard as the circuit court.” Id. “The issue of punitive damages must be submitted to the jury if more than one reasonable inference can be drawn from the evidence as to whether the defendant's behavior was reckless, willful, or wanton.” 366 S.C. at 201, 621 S.E.2d at 366.

The record contains evidence that Stonington ignored regulations regarding erosion control, stormwater runoff, and even its own engineer's plans; took no action to prevent or correct damage it knew it was causing to the ponds; and used threats and deception to avoid the consequences of its misconduct. The trial judge, who had the benefit of observing the witnesses and the presentation of evidence first-hand, summarized the evidence of punitive damages in his post-trial order as follows:

[T]he Court finds that there was ample evidence presented at trial ... upon which the jury could have based its award of punitive damages, such as (1) the testimony by the plaintiffs about pre-construction meetings between Stonington and the plaintiffs where the plaintiffs expressed concern about the potential environmental impact of Stonington's development on their properties and ponds, (2) the testimony by the plaintiffs about meetings between the plaintiffs and Stonington after construction activities began...