Jonathan Woodner Co. v. Breeden

• Decision Date: 14 September 1995
• Docket Number: 90-CV-541.,No. 90-CV-362,90-CV-362
• Citation: 665 A.2d 929
• Parties: JONATHAN WOODNER CO., et al., Appellants/Cross-Appellees, v. Francisca BREEDEN, et al., Appellees/Cross-Appellants.
• Court: D.C. Court of Appeals

665 A.2d 929

JONATHAN WOODNER CO., et al., Appellants/Cross-Appellees, v. Francisca BREEDEN, et al., Appellees/Cross-Appellants.

Nos. 90-CV-362, 90-CV-541.

District of Columbia Court of Appeals.

Argued March 9, 1995.

Decided September 14, 1995.

Walter A. Smith, with whom Stephen G. Vaskov, Robert B. Duncan, Anna E. Blackburne and John J. Dillon, were on brief, Washington, DC, for appellant/cross-appellee Jonathan Woodner Co.

B. Michael Rauh, with whom Martin Shulman and Carroll D. Hauptle, Jr. were on brief, Washington, DC, for appellant/cross-appellee Estate of Jonathan Woodner.

Gregory K. Wells, Landover, for appellant/cross-appellee Laufer.

Roy L. Pearson, Jr., Washington, DC, for appellees/cross-appellants.

Joseph B. Whitebread, Jr., Washington, DC, filed a brief on behalf of Shipley Corporation and the Estate of Ian Woodner as amici curiae in No. 90-CV-541.

Before STEADMAN, FARRELL and KING, Associate Judges.

KING, Associate Judge:

This appeal arises out of an action seeking damages for nuisance and intentional infliction of emotional distress grounded in allegations of poor housing conditions and intimidation by the landlord in attempting to convert the premises from rental to condominium use at Park Tower, an apartment building in Washington, D.C., brought by former tenants ("tenants") against three defendants (all referred to collectively as "management" or "landlord"): the owner of Park Tower, the Jonathan Woodner Company ("Woodner Co."); the estate of the Vice-President of Woodner Co., Jonathan Woodner ("Estate");¹ and Steven Z. Laufer ("Laufer"), who was a partner with Jonathan Woodner in Newpark Towers Associates ("Newpark"), which was formed in July 1979 for the purpose of converting Park Tower into condominiums. The principal dispositive questions presented in this appeal are: (1) whether entitlement to an award of punitive damages requires proof by clear and convincing evidence; (2) whether a punitive damage award can be maintained against the estate of a deceased tortfeasor; and (3) whether, when presenting evidence of an ability to pay punitive damages, proof of current net worth is required to sustain an award.

For the reasons set forth below, we adopt the clear and convincing evidence standard of proof for punitive damages. We also hold that: (1) punitive damages do not survive the death of a tortfeasor; and (2) where a plaintiff seeks to recover punitive damages based on the wealth of the defendant, proof of the defendant's current net worth is required. Finally, we conclude that the evidence was sufficient to support the tenants' claim of intentional infliction of emotional distress, but that the claim of nuisance must be dismissed.²

I.

The present action arises out of a dispute between a number of tenants and the management of the former Park Tower. In 1978, the nearly fifty-year-old Park Tower, located at 2440 Sixteenth Street, N.W. in the District of Columbia, was deteriorating and in need of repair due to its advanced age. Because of the building's condition, Jonathan Woodner and Woodner Co. ceased renting apartments in August 1978 as they became vacant. They also wrote to the remaining tenants acknowledging the deteriorating conditions and informing them of their intent to determine the best way to repair the building and address its numerous problems. In May 1979, a group of tenants formed the Park Tower Tenants' Association ("Tenants' Association") whose goals included "the assurance of permanency for tenants of Park Tower ... the resumption of previously reduced and/or eliminated services ... and the correction of all housing code violations." To achieve these goals, the Association organized a rent strike in which sixteen tenants paid rent into an escrow account rather than to the Woodner Co. On July 26, 1979, Jonathan Woodner and Laufer formed Newpark Towers Associates for the purpose of renovating, developing, managing and marketing Park Tower as a condominium or co-op.

Over the next fourteen months, the Woodner Co. made various relocation offers which were rejected by the striking tenants.³ The evidence, viewed in the light most favorable to the tenants, showed that, despite Woodner Co.'s assertions that it had done all it could to keep the building in repair during the attempted condominium conversion, management continued to allow unsafe and unsanitary conditions to exist, such as: exposed electrical wiring, darkened stairwells, boarded emergency exits, sporadic fires, open vacant apartments, uncapped radiator pipes and gas lines, unsecured entrance and exit doors, missing fire extinguishers, an inoperative fire alarm system, and the presence of urine and feces throughout the building. Also during this period, a group of men, called "workmen" or a "demolition crew" by management, moved into some of the vacant apartments and thereafter engaged in acts which threatened, intimidated, and harassed a number of the tenants. The tenants contend that this harassment was either instigated by management, or done with management's blessing or acquiescence.

On September 19, 1980, thirteen tenants⁴ filed the instant action seeking emergency injunctive relief and compensatory and punitive damages for nuisance and intentional infliction of emotional distress. The complaint alleged that over a two-year period, the management interfered with the tenants' "use and enjoyment" of their homes by removing all services and security from the building, and permitting the "demolition crew" to intimidate the tenants. The tenants sought an immediate injunction to: halt the demolition work; repair unsecured open gas lines; bar the presence of non-tenant alcoholics and drug addicts living in the building; and to discontinue other "interference with the plaintiffs' property interests." The tenants claimed they suffered "actual physical damage to themselves and their property, a disturbance of their peace of mind and a serious threat of future injury, as well as humiliation, anxiety, and apprehension, all of which was foreseeable and intended by defendants."

Following various discovery delays, stays due to the pendency of related actions, and a mistrial following Jonathan Woodner's death, a four-week jury trial before Judge Sylvia Bacon began on February 22, 1989. The jury returned verdicts in favor of the nine remaining tenants for both nuisance and intentional infliction of emotional distress, awarding the tenants compensatory damages ranging from $30,000 to $50,000 for nuisance, and from $60,000 to $80,000 for intentional infliction of emotional distress, for a total compensatory award of $965,000. Following another week of trial on punitive damages, the jury awarded the tenants collectively a total of $15 million in punitive damages: $9 million against the Woodner Co.; $4.5 million against Laufer; and $1.5 million against the Estate of Jonathan Woodner. Approximately one year later, on March 23, 1990, the trial court denied all post-trial motions, and these appeals followed.

II.

Management seeks reversal of the jury's verdicts on three broad grounds. First, it contends that the "verdict is fatally tainted" by the tenants' use of race-based peremptory strikes during jury selection and "repeatedly and prejudicially appealing to racial bias before the resulting all-black jury."⁵ Second, management maintains that the evidence is insufficient as a matter of law to support either the claim for nuisance or intentional infliction of emotional distress. Third, management challenges the punitive damage award on a number of grounds set forth below. The Estate also contends that the District of Columbia survival statute precludes a punitive damage award against the estate of a deceased defendant.

A. Nuisance

Management claims that the tenants' verdict on their nuisance claim must be reversed as a matter of law. We agree, based on this court's decision in Bernstein v. Fernandez, 649 A.2d 1064 (D.C.1991).⁶

In Bernstein, a tenant faced with leaking and falling ceilings, rodent and roach infestation, and numerous other necessary repairs which her landlord neglected to correct, sued her landlord for nuisance and intentional infliction of emotional distress. Id. at 1066-67. On appeal, this court held that the tenant's nuisance claim did not lie. Id. at 1072. First, we held that the condition of the premises (infestation, falling ceilings, etc.) might give rise to an action for breach of the settlement agreement or breach of the warranty of habitability, but "did not amount to nuisance... in the legal sense." Id. Rather, we said that nuisance, at least in this context, "is not a separate tort in itself but a type of damage... and the plaintiff must recover, if at all, on the theory of negligence or some other tort." Id. (citations omitted). Therefore, because nuisance is a type of damage and not a theory of recovery in and of itself, any element of intent in management's actions in this case must be addressed under the intentional infliction of emotional distress claim.

Second, we held that, because "damages flowing from a nuisance are measured by the diminution of the property's value caused by the nuisance's interference with the enjoyment of the property," and because the tenant had already recovered her full rent as damages under a breach of warranty of habitability claim, her leasehold could not have been further devalued as a result of any "nuisance." Bernstein, 649 A.2d at 1073 (citation omitted). Consequently, Bernstein would govern the nuisance claim of the tenants in this case to the extent that they seek damages up to the property value. Because, however, the tenants sought and received rent recoupment in an earlier landlord-tenant action based on the same alleged defects underlying their nuisance claim, like the tenant in Bernstein, they have already been fully compensated for the diminished value of their leasehold, and "the so-called nuisance could not have further diminished its...