Kirkbride v. Lisbon Contractors, Inc.

• Citation: 521 Pa. 97,555 A.2d 800
• Parties: , 57 USLW 2545 Edward KIRKBRIDE and Carole Kirkbride, Appellants, v. LISBON CONTRACTORS, INC., Appellee.
• Decision Date: 03 March 1989
• Court: United States State Supreme Court of Pennsylvania

Page 800

555 A.2d 800

521 Pa. 97, 57 USLW 2545

Edward KIRKBRIDE and Carole Kirkbride, Appellants, v. LISBON CONTRACTORS, INC., Appellee.

Supreme Court of Pennsylvania.

Argued April 14, 1988.

Decided March 3, 1989.

[521 Pa. 98] William H. Lamb, Westchester, for appellants.

Otis W. Erisman, David G. Battis, Philadelphia, for appellee.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and STOUT, JJ.

OPINION

ZAPPALA, Justice.

This appeal presents us with the opportunity to determine whether punitive damages must bear a reasonable relationship to compensatory damages which are awarded. The trial court followed the Pennsylvania Suggested Standard Civil Jury Instructions and charged the jury that no reasonable relationship was necessary. On appeal, the Superior Court reversed, 357 Pa.Super. 322, 516 A.2d 1, relying in part upon our recent plurality opinion in Martin v. Johns-Manville Corp., 508 Pa. 154, 494 A.2d 1088 (1985). Because of the confusion that has arisen due to conflicting decisions from both the Superior Court as well as this Court, we granted the petition for allowance of appeal.

The facts are rather simple. The appellants received a jury verdict for compensatory damages as well as punitive damages for injury to their land.¹ The damage to the appellants' property was caused by appellee's bulldozer being used to install a sewer line for the Uwchlan Township Municipal Authority of Chester County. At the conclusion of the trial, the judge instructed the jury as follows:

The amount you assess as punitive damages need not bear any relationship to the amount you choose to award as compensatory damages, and it is not necessary that you award compensatory damages to the plaintiffs in order to assess punitive damages against the defendant so long as you find in favor of the plaintiffs, as we tell you to do, on the question of liability.

R. 408a. After deliberating, the jury returned a verdict of $7,000 in compensatory damages and $70,000 in punitive damages. The appellee filed post-trial motions which were denied.

On appeal, the Superior Court reversed, holding that the trial court erred in not instructing the jury that punitive damages must be reasonable and not disproportionate to compensatory damages. In so doing, the Superior Court relied upon earlier cases from this Court, the most recent of which is Hughes v. Babcock, 349 Pa. 475, 37 A.2d 551 (1944). The Court then concluded that since we have not overruled this line of cases, in general, and most recently followed them in Martin v. Johns-Manville Corporation, supra, that the reasonable relationship requirement was still viable. Because we disagree with the Superior Court's analysis regarding the continued viability of the reasonable relationship requirement, we reverse.

In Hughes, the plaintiff was hurled by the defendant across a 7 1/2 foot hallway resulting in the plaintiff's arm being fractured. A jury returned a verdict in favor of the plaintiff in the amount of $2,500 compensatory damages and $5,000 in punitive damages. After the plaintiff agreed to a $2,000 remittitur of the punitive damages, the judgment was entered for $5,500. We affirmed the compensatory damages but reduced the punitive damages from $3,000 to $1,000. In doing so, we stated that punitive damages must bear a reasonable relationship to compensatory damages, but gave no legal or policy reasons why. In fact, we relied upon Section 908 of the Restatement of Torts and analyzed the verdict in conjunction with the factors set forth in Section 908(2).

Section 908(1) of the Restatement of Torts states that punitive damages are damages "... awarded against a person to punish him for his outrageous conduct." (emphasis added). In assessing punitive damages, the trier of fact may consider the character of the tortfeasor's act, the nature and the extent of his victim's harm and the wealth of the tortfeasor.

In Hughes, we relied upon Section 908 and particularly comment (e) in reducing the amount of punitive damages. While comment (e) does speak in terms of proportionality, the elements being compared are the wealth of the defendant and the seriousness of the acts committed. Thus if a wealthy person commits a rather heinous act, nominal punitive damages will not deter either that person or any other similarly situated person from committing a similar act. Therefore, when this Court required proportionality between compensatory and punitive damages in Hughes, we misconstrued comment (e) and substituted our own judgment for that of the jury in evaluating the factors set forth in Section 908. We will not perpetuate this misreading of the rule offered by the Restatement.

Having determined that Hughes misconstrued Section 908 of the Restatement of Torts and is, therefore, not controlling, we must look at cases since then to assess the viability of the reasonable relationship theory of punitive damages.

In Hilbert v. Roth, 395 Pa. 270, 149 A.2d 648 (1959), we stated that an award of punitive damages is not appropriate if actual damages have not been suffered. However, in Hilbert the plaintiff attempted to pursue an independent cause of action for punitive damages since the cause of action for compensatory damages had been dismissed. Since punitive damages are an element of damages arising out of the initial cause of action, if that cause of action is dismissed, the punitive damages which are incident to actual damages cannot stand.

The uniqueness of our holding in Hilbert was astutely perceived by the Superior Court in both Rhoads v. Heberling, 306 Pa.Super. 35, 451 A.2d 1378 (1982) and Laniecki v. Polish Army Veterans Association, 331 Pa.Super. 413, 480 A.2d 1101 (1984). In Rhoads, Superior Court affirmed a punitive damage award to two injured parties notwithstanding that neither party received any compensatory damages for personal injuries. In doing so, the Superior Court distinguished between an independent and a derivative action for punitive damages. If no cause of action exists, then no independent action exists for a claim of punitive damage since punitive damages is only an element of damages. To this extent, punitive damages must, by necessity, be related to the injury-producing cause of action. This does not mean, however, that specific compensatory damages must be awarded to sustain a punitive damage award. In Hilbert, when the underlying cause of action was dismissed, there existed no cause of action upon which the plaintiff could claim punitive damages. Hilbert is distinguishable from Rhoads in that in Rhoads damages were not awarded, however, liability was determined on the facts and punitive damages were awarded predicated upon the finding of liability.

Likewise, in Laniecki, the Superior Court affirmed a judgment of only punitive damages in a libel action. The jury had returned a verdict for the plaintiff and had awarded only punitive damages believing that the plaintiff's reputation had been satisfactorily reinstated, thereby negating any compensatory damages. In affirming the award, the Superior Court reviewed the record and concluded that the plaintiff sustained a cause of action for compensatory damages even though he did not receive a monetary award for them. However, once a cause of action was proven, the jury was permitted to award punitive damages as an element of damages incident to the cause of action. Even though compensatory damages had not been awarded, punitive damages could be appropriate, the critical factor being the establishment of sufficient evidence to sustain the cause of action.

Most recently this Court has reviewed the assessment of punitive damages in Feld v. Merriam, 506 Pa. 383, 485 A.2d 742 (1984) and Martin v. Johns-Manville Corp., supra. In Feld, this Court Adopted Section 908(2) of the Restatement (Second) of Torts. Section 908(2) states

(2) Punitive damages may be awarded for conduct that is outrageous, because of the defendant's evil motive or his reckless indifference to the...