Mack Trucks, Inc. v. Conkle

• Citation: 263 Ga. 539,436 S.E.2d 635
• Decision Date: 22 November 1993
• Docket Number: Nos. S93A0725,S93A0726,s. S93A0725
• Parties: , 62 USLW 2349, Prod.Liab.Rep. (CCH) P 13,723 MACK TRUCKS, INC. v. CONKLE et al. STATE of Georgia v. CONKLE et al.
• Court: Supreme Court of Georgia

Page 635

436 S.E.2d 635

263 Ga. 539, 62 USLW 2349, Prod.Liab.Rep.

(CCH) P 13,723

MACK TRUCKS, INC. v. CONKLE et al.

STATE of Georgia v. CONKLE et al.

Nos. S93A0725, S93A0726.

Supreme Court of Georgia.

Nov. 22, 1993.

Robert C. Semler, William T. Clark, Julianne L. Swilley, Webb, Carlock, Copeland, Semler & Stair, Atlanta, for Mack Trucks, Inc.

Larry Keith Evans, Evans and Evans, Griffin, Michael E. Hobbs, Asst. Atty. Gen., State Law Dept., Atlanta, for Conkle, et al.

Eugene C. Bessent, Chambers, Mabry, McClelland & Brooks, Richard L. Ormand, Lane, O'Brien, Caswell & Taylor, P.C., Michael J. Bowers, Atty. Gen., Atlanta.

Albert M. Pearson, III, James E. Butler, Jr., Butler, Wooten, Overby & Cheeley, for amicus curiae.

Robert D. Cheeley, Patrick A. Dawson, Butler, Wooten, Overby & Cheeley, Atlanta.

Michael J. Bowers, Atty. Gen., Michael E. Hobbs, William M. Droze, William C. Joy, Asst. Attys. Gen., State Law Dept., Atlanta, for State.

Charles W. Stephens, Stephens & Shuler, Gainesville, for amicus curiae.

Elizabeth F. Bunce, Franklin, Taulbee, Rushing & Bunce, Statesboro, Samuel W. Oates, Jr., Neil Chandler Thom, Columbus.

CLARKE, Chief Justice.

Appellee Daniel Conkle was injured in October 1988, after the tractor trailer truck he was driving overturned when its right frame rail broke. Conkle and his wife filed suit against appellant Mack Trucks, Inc. (Mack), the manufacturer of the truck, alleging that the frame rail broke as the result of a fatigue crack, and that Mack was liable under product liability theories of strict liability and negligence. Additionally, the appellees sued Interstate Truck Leasing, Inc. (ITL), the repair facility for the truck, for negligently failing to maintain the truck and discover its defects.

The jury returned special verdicts, finding that ITL negligently failed to maintain the truck, and that Mack was liable for "negligent failure to recall or warn." The jury found that Mack was not liable under a theory of "strict products liability." The jury also found that Daniel Conkle was responsible for 15% of his injuries. The jury returned a verdict for compensatory damages in the amount of $184,082, and an award of punitive damages against Mack in the amount of $2 million.

As part of the judgment in this case, the trial court granted the appellees' motion to declare OCGA § 51-12-5.1(e)(2) unconstitutional. That subsection of the code provides, in part, that seventy-five percent of awards of punitive damages arising out of product liability cases, less costs and reasonable attorney fees, "shall be paid into the treasury of the state."

ITL did not appeal the judgment. In Case No. S93A0725, Mack appeals the award of punitive damages, but does not contest the award of compensatory damages. In Case No. S93A0726, the State of Georgia appeals the trial court's determination that OCGA § 51-12-5.1(e)(2) is unconstitutional. As some of the enumerations of error in each appeal overlap, they will be treated together.

1. Appellant Mack initially argues that the award of punitive damages under OCGA § 51-12-5.1(e)(1) ¹ cannot be sustained because that subsection relates to actions arising from product liability, and the jury's special verdict concluded that Mack was not liable for "strict products liability." Therefore, Mack argues, the trial court erred in not applying subsection (g) ² of the statute, with the resulting effect that the award of punitive damages would be capped at $250,000. Mack argues that this court should limit a product liability action to the definition found in OCGA § 51-1-11(b) which provides that a manufacturer of property sold as new property shall be liable in tort to any person who uses, consumes, or is affected by the property, and

who suffers injury to his person or property because the property when sold by the manufacturer was not merchantable and reasonably suited to the use intended, and its condition when sold is the proximate cause of the injury sustained.

As can be seen, under OCGA § 51-1-11(b), "strict liability is imposed for injuries suffered." Talley v. City Tank Corp., 158 Ga.App. 130, 134, 279 S.E.2d 264 (1981). However, the jury's verdict in this case, that Mack is liable on the basis of its "negligent failure to recall or warn," was based on a negligence theory of product liability which is recognized under OCGA § 51-1-11(c). ³ Browning v. Maytag Corporation, 261 Ga. 20, 401 S.E.2d 725 (1991). See also, Talley, supra, 158 Ga.App. at 137, 279 S.E.2d 264. As such, the trial court correctly concluded that this was a product liability action sounding in negligence, and did not err in refusing to apply OCGA § 51-12-5.1(g) to the award of punitive damages.

2. The trial court declared OCGA § 51-12-5.1 unconstitutional in several respects.

(a) The trial court initially held that subsection (e)(2), requiring that seventy-five percent of punitive damages awarded in a product liability action be paid into the state treasury, violates the equal protection clauses of the United States and Georgia Constitutions because it discriminates arbitrarily between product liability plaintiffs and plaintiffs in all other tort cases. In order to withstand an equal protection challenge under the rational basis test, which the parties concede is applicable here, the statutory classification

must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike. Allrid v. Emory Univ., 249 Ga. 35, 38 (285 SE2d 521) (1982).

To address the constitutionality of this subsection, the statute must be analyzed in its entirety. We begin with the premise that there is no constitutional right to an award of punitive damages. Teasley v. Mathis, 243 Ga. 561, 255 S.E.2d 57 (1979); Kelly v. Hall, 191 Ga. 470, 472, 12 S.E.2d 881 (1941).

OCGA § 51-12-5.1 sets forth a comprehensive scheme regulating punitive damages which may be awarded in tort actions. Subsection (a) provides that punitive damages are awarded to "penalize, punish or deter a defendant." Subsection (c) provides that punitive damages "shall be awarded not as compensation to a plaintiff but solely to punish, penalize, or deter a defendant." The remainder of the statute is three-tiered, addressing awards of punitive damages in product liability cases, (subsection e); in tort cases which do not involve product liability but in which the defendant acted, or failed to act, with the "specific intent to cause harm" (subsection f); and in all other tort actions which subsections (e) and (f) do not address (subsection g).

Subsection (e)(1) provides that, in product liability cases, there is no limitation on the amount which may be awarded as punitive damages. However,

[o]nly one award of punitive damages may be recovered in a court in this state from a defendant for any act or omission if the cause of action arises from product liability, regardless of the number of causes of action which may arise from such act or omission.

Subsection (e)(2) provides that seventy-five percent of the punitive damages awarded in a product liability action, less costs of litigation and attorney fees, will be paid into the state treasury.

Under subsection (f) of the statute, in a case in which the cause of action does not arise from product liability, but it is determined that the defendant acted or failed to act with the "specific intent to cause harm," there is no limitation on the amount of punitive damages which can be awarded.

Subsection (g) provides that in all tort actions which do not involve product liability, and in which the defendant did not act or fail to act with specific intent to cause harm, "the amount [of punitive damages] which may be awarded in the case shall be limited to a maximum of $250,000."

The clearly stated purpose of the statute is to punish and deter the defendant in a tort action. Subsection (a). The statute emphatically provides that punitive damages are not to be awarded as compensation to the plaintiff. Subsection (c). With regard to product liability actions, subsection (e)(1) effectuates these purposes by providing no ceiling on the amount of punitive damages which may be awarded. However, this punishment is limited by the fact that there may be only one such punishment meted out to a product liability defendant "regardless of the number of causes of action which may arise" from his conduct. Id. This limitation strongly enforces the legislature's stated intent that the purpose of the statute is to punish the defendant, and not to provide compensation or, in our view, a windfall to an individual plaintiff. Rather, we think that the purpose of this subsection is to authorize punishment of a defendant who has the potential to greatly damage society at large. The statute furthers this purpose by not allowing the first plaintiff to reach the courthouse with a product liability lawsuit to reap a windfall from the punitive damages, but instead requiring that three-quarters of the punitive damages awarded be paid into the state treasury for the benefit of all Georgia citizens. Punishment and deterrence of the defendant being the purposes of the subsection, it is insignificant under the statute that the plaintiff does not receive the full award.

It can be seen that subsections (e), (f) and (g) constitute a consistent statutory scheme for the regulation of punitive damages. In a case in which the cause of action arises from product liability, the risk falls on society as well as on the individual plaintiff who has been harmed. Because of the potential ability to damage numerous citizens, the defendant may be punished by the imposition of unlimited damages, but this may occur only one time. As we stated in Hospital Auth. v. Jones, 261 Ga. 613, 615, 409 S.E.2d 501 (1991), with regard to an award of punitive damages, "[s]ociety's interest [is] better served...