Palmisano v. Toth

• Decision Date: 07 May 1993
• Docket Number: No. 92-350-M,92-350-M
• Citation: 624 A.2d 314
• Parties: Debra N. PALMISANO et al. v. Bernard J. TOTH et al. P.
• Court: Rhode Island Supreme Court

Page 314

624 A.2d 314

Debra N. PALMISANO et al. v. Bernard J. TOTH et al.

No. 92-350-M.P.

Supreme Court of Rhode Island.

May 7, 1993.

Thomas J. Grady, Westerly, for plaintiffs.

Paul V. Reynolds, Kevin Cain, William Landry, Providence, for defendants.

OPINION

MURRAY, Justice.

This case is before us on the defendants' petition for certiorari, seeking review of a Superior Court order that granted the plaintiffs' motions to compel the production of documents relating to the defendants' personal financial information and to compel the defendants to answer similar questions at reconvened depositions. The defendants also ask this court for guidance regarding procedures to be followed during the course of discovery when a party seeking punitive damages requests disclosure of another's financial assets.

The facts of the underlying cause of action, as adduced by the pleadings, are as follows. On May 11, 1990, plaintiff Debra N. Palmisano (Debra) was employed as a waitress by Amscot, Inc., doing business as Old Mountain Lanes, a South Kingstown, Rhode Island, bowling alley with an attached restaurant and bar. On that evening she finished her work shift at approximately 10:10 p.m. and walked from the establishment toward her car, which was parked in a parking lot owned and operated by Bank of New England-Old Colony, N. A. To get to her car, she had to traverse a portion of a parking lot owned and operated by defendant Clock Place Associates (Clock Place), a Rhode Island partnership. While walking in a dark, unlit section toward the rear of Clock Place's premises, Debra was viciously attacked and assaulted by a person engaged in robbing a store situated on Clock Place's property.

As a result of the attack, Debra alleges, she suffered and continues to suffer from physical and psychological injuries; her husband, Christian G. Palmisano, alleges that he has suffered from a loss of consortium. The plaintiffs filed an action in Washington County Superior Court on March 8, 1991, against Clock Place and its four partners, Bernard J. and Robert L. Toth (the Toths), Leonard Terrien (Terrien), and Lawrence C. LeBlanc (LeBlanc), individually and as general partners. The four counts against defendants allege that they were negligent (1) in failing to provide adequate lighting in the Clock Place parking lot, (2) in failing to make available respective parking areas for employees of Old Mountain Lanes as required by an agreement entered into by Clock Place, (3) in failing to warn or to protect Debra against the dangerous condition of Clock Place's parking area, and (4) in failing to provide adequate security on or about the Clock Place premises.

On March 17, 1992, plaintiffs filed a motion to amend the complaint in the form of a second amended complaint. The plaintiffs' motion was granted on April 22, 1992, and the second amended complaint was filed the next day. In addition to the aforementioned four counts, plaintiffs now seek punitive damages, asserting that "Defendants' conduct, individually and jointly, rises to the level of willfulness, recklessness or wickedness, as to amount to criminality, which for the good of society and warning to the individuals, ought to be punished."

In furtherance of their request for punitive damages, plaintiffs sought information relating to defendants' personal finances, first by way of depositions and next by way of extensive requests for production directed to each named defendant. The three defendants who had been deposed, the Toths and LeBlanc, each refused to answer questions asked by plaintiffs' counsel that ventured into the areas of his personal finances and defendant Clock Place's financial condition.

The requests for production, each filed on April 24, 1992, sought inter alia personal financial statements submitted to all financial institutions, deeds to all real estate holdings and related mortgages, certain Internal Revenue Service forms, certificates or statements evidencing investments, insurance policies, and registration certificates of items of tangible personal property such as automobiles, boats, and airplanes. On May 14, 1992, each defendant objected to plaintiffs' request for production on the grounds that plaintiffs' complaint failed to state a claim upon which relief may be granted with respect to punitive damages, thereby rendering this information irrelevant and immaterial and not designed to lead to the discovery of admissible evidence. The defendants also contend that this request for production is premature, that awarding punitive damages under Rhode Island law violates defendants' constitutional rights to due process, and that the request is so broad as to be burdensome in nature.

In response to defendants' objections, plaintiffs filed motions to compel each defendant to produce the documents previously requested and to compel the Toths and LeBlanc to answer certain questions at future depositions. These matters were heard by a Superior Court justice on June 15, 1992, as were defendants' motions for a separate trial and for a stay of discovery in regard to defendants' financial conditions pending the resolution of plaintiffs' claim for compensatory damages and a determination by the trial justice of whether plaintiffs are eligible for punitive damages. All four motions were continued until July 3, 1992, at which time defendants' motions were denied and plaintiffs' motions to compel production of documents and to compel three defendants to answer questions pertaining to financial assets at future reconvened depositions were granted.

Prior to the appropriate order's being entered by the trial justice, defendants filed with this court a petition for writ of certiorari and a motion for a stay of the Superior Court order. A single justice of this court stayed the discovery order on July 9, 1992, pending review of defendants' petition for certiorari by the full court when it reconvened in September 1992. We granted certiorari on September 24, 1992, and ordered the stay to remain in effect.

The issues raised by defendants question the fairness as well as the constitutionality of Rhode Island's law on punitive damages. The defendants also assert that plaintiffs have not established a case that would warrant the imposition of punitive damages. Lastly defendants contend that in no circumstances are defendant Terrien's financial records discoverable because he had no active involvement in any wrongful act of the partnership and that, therefore, punitive damages cannot be imposed on him vicariously. We shall address each issue in turn.

I

The defendants maintain that to order discovery of confidential information concerning one's personal finances solely because the opposing party has demanded punitive damages absent some factual basis for doing so would subject a party to annoyance, undue expense, embarrassment, and oppression. The defendants further contend that this practice would allow an opposing party to use the discovery process to harass and cause undue hardship on a defendant. Hence defendants suggest that this court adopt procedures through which a plaintiff might make a showing that he or she is entitled to punitive damages before a defendant is required to disclose his or her personal financial information.

Prior to any exposition of the necessary procedures to be followed before permitting discovery into one's personal finances, we consider the status of punitive damages in Rhode Island. The nature of punitive or exemplary damages is twofold: to punish the tortfeasor whose wrongful conduct was malicious or intentional and to deter him or her and others from similar extreme conduct. City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 266-67, 101 S.Ct. 2748, 2759, 69 L.Ed.2d 616, 632 (1981); Greater Providence Deposit Corp. v. Jenison, 485 A.2d 1242, 1244 (R.I.1984); Abbey Medical/Abbey Rents, Inc. v. Mignacca, 471 A.2d 189, 195 (R.I.1984).

This court and others have held that the party seeking punitive damages has the burden of producing " 'evidence of such willfulness, recklessness or wickedness, on the part of the party at fault, as amount[s] to criminality, which for the good of society and warning to the individual, ought to be punished.' " Sherman v. McDermott, 114 R.I. 107, 109, 329 A.2d 195, 196 (1974). See also Emery-Waterhouse Co. v. Rhode Island Hospital Trust National Bank, 757 F.2d 399, 407 (1st Cir.1985); Jenison, 485 A.2d at 1244. This court has stated that for punitive damages to be awarded there must be a showing that the defendant acted with malice or in bad faith. Morin v. Aetna Casualty and Surety Co., 478 A.2d 964, 967 (R.I.1984). Similarly, the United States District Court for the District of Rhode Island has stated that under Rhode Island law one must allege that the other party acted with the intent to cause harm. See Wilson Auto Enterprises, Inc. v. Mobil Oil Corp., 778 F.Supp. 101, 107 (D.R.I.1991); Carvalho v. Coletta, 457 A.2d 614, 616 (R.I.1983).

The standard in Rhode Island for imposing punitive damages is rigorous and will be satisfied only in instances wherein a defendant's conduct requires deterrence and punishment over and above that provided in an award of compensatory damages. Davet v. Maccarone, 973 F.2d 22, 27 (1st Cir.1992). An award of punitive damages is considered an extraordinary sanction and is disfavored in the law, but it will be permitted if awarded with great caution and within narrow limits. D'Amato v. Rhode Island Hospital Trust National Bank, 772 F.Supp. 1322, 1324 (D.R.I.1991).

Whether a party seeking punitive damages has met the high standard imposed on such an award is a question of law for the trial justice. Id. at 1325; Peckham v. Hirschfeld, 570 A.2d 663, 668 (R.I.1990); Morin, 478 A.2d at 967; Sherman, 114 R.I. at 108, 329 A.2d at 196. Once a trial justice determines that there are adequate facts to support an award of punitive damages, then the question of whether and to what extent the...