McElwain v. Georgia-Pacific Corp.

• Jurisdiction: Oregon
• Parties: Ross McELWAIN and Edith McElwain, husband and wife, Appellants, v.CORPORATION, a corporation, Respondent.
• Citation: 245 Or. 247,421 P.2d 957
• Docket Number: GEORGIA-PACIFIC
• Court: Oregon Supreme Court
• Decision Date: 28 December 1966

Page 957

421 P.2d 957

245 Or. 247

Ross McELWAIN and Edith McElwain, husband and wife, Appellants, v. GEORGIA-PACIFIC CORPORATION, a corporation, Respondent.

Supreme Court of Oregon, In Banc.

Argued and Submitted Dec. 1, 1965.

Reargued Sept. 8, 1966.

Decided Dec. 28, 1966.

Nels Peterson, Portland, argued and reargued the cause for appellants. With him on the briefs were Gerald H. Robinson, Nick Chaivoe and Donald H. Londer, Portland.

Clifford N. Carlsen, Jr., Portland, argued and reargued the cause for respondent. With him on the brief were King, Miller, Anderson, Nash & Yerke, Fredric A. Yerke, Jr., Jean P. Lowman, Portland, and William T. Hollen, Newport.

Before McALLISTER, C.J., and PERRY, SLOAN, O'CONNELL, GOODWIN, DENECKE and HOLMAN, JJ.

McALLISTER, Chiief Justice.

This is an action brought by the plaintiffs, Ross and Edith McElwain, against the defendant, Georgia-Pacific Corporation, to recover both compensatory and punitive damages for injury to plaintiffs' real property caused by the operation of defendant's paper mill in Toledo.

Plaintiffs own two and one-half acres of land, improved with a dwelling house and garage, located directly east of defendant's mill. The complaint alleged that since defendant commenced operation of its plant on or about January 1, 1958, plaintiffs' property was damaged by 'certain noxious and toxic gases, fumes and smoke and particles' blown and deposited thereon by defendant's mill. It is further alleged that the effluents from defendant's mill killed the trees and vegetation on plaintiffs' property and otherwise depreciated the value of the property. Plaintiffs prayed for $35,000 in compensatory damages and $20,000 in punitive damages. The court withdrew the issue of punitive damages, and the jury returned a verdict of $2,000, compensatory damages. The plaintiffs appeal.

Plaintiffs assign as error the withdrawal by the trial court of plaintiffs' claim for punitive damages.

Although this court has on occasion indulged in the dictum that punitive damages are not 'favored in the law,' it has, nevertheless, uniformly sancitioned the recovery of punitive damages whenever there was evidence of a wrongful act done intentionally, with knowledge that it would cause harm to a particular person or persons. Hodel, The Doctrine of Exemplary Damages in Oregon, 44 Or.L.Rev. 175 (1965). Malice is the term most frequently used in our decisions to define a state of mind that will justify the imposition of punitive damages. Malice, as a basis for punitive damages, signifies nothing more than a wrongful act done intentionally, without just cause or excuse. Syfert v. Solomon, 95 Cal.App. 228, 27i P. 810 (1928); Wendelken v. Stone, 88 N.J.L. 267, 86 A. 376 (1913); Beetschen v. Shell Pipe Line Corp. (Mo.App.) 248 S.W.2d 66 (1952). The intentional disregard of the interest of another is the equivalent of legal malice, and justifies punitive damages for trespass. Allison v. Hodo, 84 Ga.App. 790, 67 S.E.2d 606, 608 (1951). Where there is proof of an intentional, unjustifiable infliction of harm with deliberate disregard of the social consequences, the question of award of punitive damages is for the jury. Vaughn v. Missouri Power & Light Co. (Mo.App.) 89 S.W.2d 699 (1935); Funk v. Kerbaugh, 222 Pa. 18, 70 A. 953, 22 L.R.A.,N.S., 296 (1908); Yazoo & M.V.R. Co. v. Sanders, 87 Miss. 607, 40 So. 163, 3 L.R.A.,N.S., 1119 (1906); McIvor v. Mercer-Fraser Co., 76 Cal.App.2d 247, 172 P.2d 758 (1946); Louisville & N.R. Co. v. Bolton, 18 Ky.Law Rep. 824, 38 S.W. 498 (1897); Krebs v. Bambrick Bros. Const. Co., 144 Mo.App. 649, 129 S.W. 425 (1910).

It is abundantly clear from the record that defendant knew when it decided to construct its kraft mill in Toledo, that there was danger, if not a probability, that the mill would cause damage to adjoining property. This is disclosed by defendant's evidence that the plans for the mill included, as an integral part thereof, certain air pollution control devices designed to minimize the damage caused by the mill to surrounding property.

The record is equally clear that, almost from the day it began to operate, the effluents from defendant's mill were a source of concern to the State Board of Health, and its successor, the State Sanitary Authority, and to the owners of the adjacent property. Although the trial judge excluded most of the relevant evidence offered by plaintiffs to show the extent and nature of the effluents deposited on their propoerty, the defendant's evidence discloses that it was required to keep and furnish records to the state regulating authorities concerning the fallout of effluents on the neighboring properties. Defendant receive correspondence from the State Sanitary Authority concerning the damage caused by the effluents from its mill, and defendant's representatives testified at a hearing conducted by the Authority.

When defendant's mill was constructed the following air control equipment was installed therein:

                Date   Equipment               Function
                -----  ----------------------  ------------------------------
                12/57  No. 1 Electrostatic     Remove dust from Recovery
                       Precipitator            Furnace gases
                12/57  No. 1 Peabody Scrubber  Remove dust from kiln gases
                12/57  No. 1 Black Liquor      Stabilize liquor and minimize
                       Oxidation Tower         release of odors
                12/57  Blow Heat Accumulator   Condense all digester gases so
                                               that non-condensables can be
                                               vented to oxidation tower for
                                               re-absorption
                

In about June 1960 the capacity of defendant's mill was increased from about 240 tons to 600 tons of paper per day. In connection with that expansion program two additional pieces of pollution control equipment were installed, as follows:

                3/60  No. 2 Peabody Scrubber  Remove dust from kiln gases
                5/60  No. 2 Electrostatic     Remove dust from Recovery
                      Precipitator            Furnace gases
                

In 1961 a Turpentine Recovery System was installed 'to remove turpentine vapors,' and in 1962 two Lagoon Surface Aerators and other oxidation equipment was installed to 'reduce odor release from liquid streams.' According to defendant the equipment described above is all the pollution control equipment which had been installed prior to the filing of the complaint in this action. There is no contention by defendant that the fallout of effluents on plaintiffs' property was eliminated or even alleviated by its efforts at control.

Defendant contends that it should not be liable for punitive damages if it did everything reasonably possible to eliminate or minimize the damage caused by its mill to the neighboring properties. We need not pause to determine whether there is merit in defendant's contention. It is sufficient to call attention to the substantial evidence from which the jury could have found that during the period involved in this action the defendant had not done everything reasonably possible to eliminate or minimize the damage to adjoining properties by its mill. That evidence was introduced by defendant itself. Its expert in charge of its pollution control program, Dr. Taylor, testified that between the filing of plaintiffs' complaint and the time of the trial the defendant had installed or was in process of installing the following additional pollution control equipment:

        
                4/63   Rebuild #1 Precipitator  Replace internal units and
                                                increase electrical capacity
                11/63  No. 2 Black Liquor       Stabilize liquor and minimize
                       Oxidation System         release of odors
                3/64   #3 Electrostatic         Remove dust from Recovery
                       Precipitator             furnace gases (Expansion)
                3/64   #3 Peabody Scrubber      Remove dust from kiln gases
                                                (Expansion)
                3/64   290-ft Stack             High level discharge of all three
                                                recovery furnace gases
                4 to   Three wet scrubber       Wash residual salt from
                6/64   systems for three        recovery furnace gases and
                       Recovery Furnaces        reduce odor
                5/64   Relocate #2 stack        High level discharge of kiln
                       at kilns                 gases
                

Dr. Taylor testified that the increase in the height of the stack and the other controls were designed to minimize particulate fallout. The following is quoted from his testimony:

'Q: I think one of the last questions you were asked, you said that there will be a significant reduction as a result of installing the new scrubbers and stacks. I think that is one of the last questions asked you and that was your answer.

'A: Yes.

'Q: But, until they are installed, there is escaping particulates from the plant in considerable quantities, is there not?

'A: We have discussed this before that we do have particulates and they have been escaping to a degree since we started up, we admit this.'

Except as to the three 'wet scrubbers' installed from April to June, 1964, there is no contention that the additional controls could not have been installed either (a) when the mill was built, or (b) as soon as it became apparent that the mill pollution was damaging the adjoining properties. It was admitted that the increase of the stack height to 290 feet would decrease the fallout on plaintiffs' property. The failure to increase the stack height earlier is not explained.

The evidence also discloses that the defendant's efforts to control pollution were influenced by the cost factor. Dr. Taylor testified as follows:

'Q: On the question of adequacy of the control, did the element of cost enter into consideration by Georgia-Pacific Corporation?

'A: In any of our considerations in a corporation, we take into consideration cost, yes.'

There was an abundance of evidence sufficient by any standard to support an award of punitive damages. We conclude that the trial court erred in withdrawing the issue of punitive damages from the jury.

The questions raised...