Masaki v. General Motors Corp.

• Court: Hawaii Supreme Court
• Writing for the Court: Before LUM; LUM
• Citation: Masaki v. General Motors Corp., 71 Haw. 1, 780 P.2d 566 (Haw. 1989)
• Decision Date: 20 September 1989
• Docket Number: No. 13023,13023
• Parties: Steven MASAKI, Frank Masaki, and Sumiye Masaki, Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION and Servco Pacific, Inc., Defendants-Appellants, and Does 1-10, Doe Corporations 2-10, Doe Partnerships 1-10; and Doe Governmental Entities 1-10, Defendants.

Page 566

780 P.2d 566

71 Haw. 1

Steven MASAKI, Frank Masaki, and Sumiye Masaki, Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION and Servco Pacific, Inc. Defendants-Appellants and Does 1-10, Doe Corporations 2-10, Doe Partnerships 1-10 and Doe Governmental Entities 1-10, Defendants.

No. 13023.

Supreme Court of Hawai'i.

Sept. 20, 1989.

Syllabus by the Court

1. Punitive damages may be awarded only in cases where the wrongdoer has acted wantonly, oppressively, or with such malice as implies a spirit of mischief or criminal indifference to civil obligations, or where there has been some willful misconduct or that entire want of care which would raise the presumption of a conscious indifference to consequences.

2. Punitive damages are recoverable in products liability actions based on a strict liability theory where the plaintiff proves the requisite aggravating conduct on the part of the defendant.

3. "Clear and convincing" evidence may be defined as an intermediate standard of proof greater than a preponderance of the evidence, but less than proof beyond a reasonable doubt required in criminal cases. It is that degree of proof which will produce in the mind of the trier of fact a firm belief or conviction as to the allegations sought to be established, and requires that the existence of a fact be highly probable.

4. Proof of conduct necessary to support an award of punitive damages must be by clear and convincing evidence.

5. In order to recover damages for the negligent infliction of emotional distress, it is not necessary that the plaintiff exhibit physical symptoms of mental distress; nor is it necessary that the plaintiff actually witness the tortious event.

6. Parents may recover damages for loss of consortium against a third party who negligently injures their adult child.

7. Where a seller or lessor, who is engaged in the business of selling or leasing a product, sells or leases a defective product which is dangerous to the user or consumer, and injury results from its use or consumption, the seller or lessor will be held strictly liable in tort for the injury.

8. Under the theory of strict products liability, for the plaintiff to recover the defendant's product must be both defective and dangerous.

David M. Heilbron, San Francisco, Cal., Pro Hac Vice (Donald H. Dawson, Jr., Detroit, Mich., with him, on the briefs), for General Motors Corp.

Burnham H. Greeley and Kathleen A. Clark, of counsel (Greeley, Walker & Kowen, Honolulu, with him, on the briefs), for General Motors Corp. and Servco Pacific, Inc.

Howard Glickstein (Michael I. Stern, of counsel, Schutter and Glickstein, and Sherman S. Hee, Honolulu, with him, on the brief), for Steven Masaki, Frank Masaki, and Sumiye Masaki.

Kenneth S. Geller, Pro Hac Vice, James D. Holzhauer, Chicago, Ill., Pro Hac Vice, and Michael C. Webb, Honolulu, for amici curiae Product Liability Advisory Council, Inc. and Motor Vehicle Mfrs. Assoc. of the U.S., Inc.

Geoffrey C. Hazard, Jr., New Haven, Conn., Pro Hac Vice, and Kevin S.C. Chang, Honolulu, for amicus curiae Hawaii Auto. Dealers' Assoc.

Jeffrey S. Portnoy and Phillip A. Li, Honolulu, for amicus curiae Hawaii Hotel Assoc.

John M. McGuire, David J. Dezzani, and Gary M. Slovin, Honolulu, for amici curiae The Chamber of Commerce of Hawaii, Mfrs. Assoc. of Hawaii, and Retail Merchants of Hawaii.

Bill Wagner, Tampa, Fla., Jeffrey R. White, Washington, D.C., and Mark S. Davis, Honolulu, for amicus curiae Assoc. of Trial Lawyers of America.

Jan M. Weinberg, Roy J. Bell, III, and Douglas T. Moore, Honolulu, for amicus curiae The Hawaii Academy of Plaintiffs' Attorneys.

Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.

LUM, Chief Justice.

In this products liability case, Defendants-Appellants General Motors Corporation (GM) and Servco Pacific, Inc. (Servco) appeal a trial court judgment in favor of Plaintiffs-Appellees Steven Masaki, and his parents Frank and Sumiye Masaki. Steven was severely injured when he was run over by a GM van which Appellees claimed "self-shifted" into reverse gear due to a product defect. A jury found that the van was defective and that GM was negligent, and awarded Masaki compensatory and punitive damages. Appellants allege numerous trial court errors including erroneous jury instructions on punitive damages and liability, insufficient evidence to support liability and punitive damages, and lack of a legal basis for Masaki's parents' recovery of damages for loss of filial consortium and emotional distress.

Because we conclude that the jury should have been instructed to award punitive damages only if the supporting evidence is clear and convincing, we reverse the punitive damages award and remand for a new trial on the issue of punitive damages. We affirm the judgment of the trial court in all other respects.

I.

This case arises from a tragic accident which occurred while Steven Masaki, a 28-year old auto mechanic, was working on a 1976 Chevrolet van. On August 15, 1984, Masaki's employer sent him to jump start a van belonging to International Inflight Catering Co. (IICC) and bring it back to the shop for maintenance. The van had been manufactured by General Motors and sold to IICC by Servco. Masaki was accompanied by co-worker Sandra Reyes.

Masaki initially attempted to start the van by turning the key in the ignition. The engine turned over several times but did not catch. Masaki then decided to use a "remote starter," a device which bypasses the vehicle's ignition switch. He attached one of the two five-foot leads of the remote starter to the solenoid located underneath the van, and the other to the battery terminal under the hood. Masaki did not set the parking brake or block the wheels before going under the van, and could not recall whether the gear shift indicator ("PRNDL") was pointing to park.

Masaki pushed the starter button on the remote starter, causing the van to start. While the engine was running, he began to crawl under the van to disconnect the remote starter. The van made a sound like it was being put into gear, and immediately lurched backward. The van hit the back of Masaki's head, breaking his neck.

Sandra Reyes, who was sitting in a truck parked next to the van, facing in the opposite direction, heard the engine start and run for approximately twenty seconds. She then heard the van change gears and saw it jerk backwards. She discovered Masaki pinned underneath the van, turned off the engine, and went for help. Two witnesses observed that the gear shift lever was pointing to reverse immediately following the accident and that the parking brake was not set. Masaki's injuries rendered him a quadriplegic.

The Masakis filed a complaint against GM and Servco alleging negligence, breach of warranty, and strict products liability. Masaki claimed that the van's transmission was defectively designed and manufactured, and that he had not been warned of the defect. His parents sued for emotional distress and loss of Steven's consortium, services and support.

A jury trial lasting approximately two months commenced on December 7, 1987. On February 19, 1988, the jury returned a verdict finding that the van was defective and that GM was negligent, and that both the defect and GM's negligence were legal causes of Steven Masaki's injuries. The jury also found Masaki forty per cent contributorily negligent for his own injuries. The jury awarded Masaki $6,776,115 in compensatory damages and $11,250,000 in punitive damages. His parents were awarded $560,000 each for loss of consortium and $460,000 each for emotional distress. The court reduced all compensatory awards to Steven and his parents by forty percent. Judgment was entered on March 15, 1988.

On March 24, 1988, Appellants moved for judgment notwithstanding the verdict, or in the alternative, a new trial, or a remittitur of the damages. The motion was denied on April 5, 1988, and this appeal followed.

Appellant raises numerous points of error. We will consider only those points which merit discussion, seriatim.

II. PUNITIVE DAMAGES

We turn first to the issue of punitive damages. GM urges reversal of the $11.250 million punitive damages award, claiming several grounds of trial court error: (1) erroneous jury instructions; (2) insufficient evidence to support the award; (3) failure to bifurcate the issue of punitive damages; (4) failure to set aside or remit the award; and (5) the unconstitutionality of punitive damages. Because we conclude that the jury was improperly instructed as to the standard of proof required in order to award punitive damages, we reverse the award and remand for a new trial on the issue of punitive damages. Therefore, we find it unnecessary to address the remaining grounds of error. ¹

A.

Before addressing the question of the standard of proof for punitive damages, we find it useful to briefly review the doctrine of punitive damages, its underlying purpose and rationale, its compatibility with a product liability action, and its development in the law of Hawaii.

1.

Punitive or exemplary damages are generally defined as those damages assessed in addition to compensatory damages for the purpose of punishing the defendant for aggravated or outrageous misconduct and to deter the defendant and others from similar conduct in the future. D. Dobbs, Handbook on the Law of Remedies, § 3.9, at 204 (1973); Restatement (Second) of Torts § 908 (1979). Thus, the practice of awarding punitive damages is an exception to the general rule that damages are aimed at compensating the victim for his injuries. C. McCormick, Handbook on the Law of Damages § 77, at 275 (1935).

Since the purpose of punitive damages is not compensation of the plaintiff but rather punishment and deterrence, such damages are awarded only when the egregious nature of the defendant's conduct makes such a remedy appropriate. Thus, "[w]here the defendant's wrongdoing has been intentional and...