Rhyne v. K-Mart Corp.

• Citation: 149 NC App. 672,562 S.E.2d 82
• Decision Date: 16 April 2002
• Docket Number: No. COA00-1516.,COA00-1516.
• Parties: Dan RHYNE and Alice Rhyne v. K-MART CORPORATION, Shawn Roberts, and Joseph Hoyle.
• Court: Court of Appeal of North Carolina (US)

562 S.E.2d 82

149 NC App. 672

Dan RHYNE and Alice Rhyne v. K-MART CORPORATION, Shawn Roberts, and Joseph Hoyle.

No. COA00-1516.

Court of Appeals of North Carolina.

April 16, 2002.

Robert S. Peck, Washington, DC, Arcangela M. Mazzariello, and Gray, Layton, Kersh, Solomon, Sigmon, Furr & Smith, PA, by William E. Moore, Jr., Gastonia, for plaintiffs.

Alston & Bird, LLP, by Leigh M. Levine, Charolotte, James C. Grant (pro hac vice), and Nowell D. Berreth (pro hac vice), Atlanta, for defendant K-Mart.

Patterson, Harkavy & Lawrence, LLP, by Burton Craige, Raleigh, for North Carolina Academy of Trial Lawyers, North Carolina Friends of Residents in Long Term Care, Inc., North Carolina Justice and Community Development Center, and American Civil Liberties Union Legal Foundation of North Carolina, Amici Curiae.

Smith, Anderson, Blount, Dorsey, Mitchell & Jernigan, LLP, by James Y. Kerr, II and Johanna S. Fowler; and Maupin, Taylor & Ellis, PA by Charles B. Neely, Jr. and Thomas Farr, Raleigh, for North Carolina Citizens for Business and Industry, Amicus Curiae.

Samuel M. Taylor and Daniel J. Popeo, Washington, DC, for Washington Legal Foundation and Allied Educational Foundation, Amici Curiae.

Smith, Helms, Mulliss & Moore, LLP, by J. Donald Cowan, Jr. and Lisa Frye Garrison, Raleigh, for Product Liability Advisory Council, Amicus Curiae.

THOMAS, Judge.

The primary issue in this case is whether North Carolina's General Assembly exceeded its constitutional authority in enacting a cap, or limit, on the award of punitive damages.

North Carolina General Statute § 1D-25 became effective on 1 January 1996 and placed a cap on the amount of punitive damages that could be awarded at $250,000 or three times the compensatory damages, whichever is larger.

Here, plaintiffs Dan Rhyne (Mr. Rhyne) and Alice Rhyne (Mrs. Rhyne), husband and wife, received verdicts for compensatory damages in the amounts of $8,255 and $10,730, respectively, against defendant K-Mart Corporation (K-Mart). The jury then awarded each of them $11.5 million in punitive damages. In accordance with its interpretation of section 1D-25, the trial court reduced the punitive damages awards to $250,000 per claimant.

Plaintiffs appeal. They contend section 1D-25 is unconstitutional under the North Carolina Constitution in that it: (1) violates their right to a jury trial; (2) violates the separation of powers principle; (3) violates the open courts guarantee; (4) constitutes an improper form of special legislation; (5) violates principles of due process, equal protection, and the right to enjoy the fruits of one's own labor; and (6) is void for vagueness.

We disagree with plaintiffs' contentions. Based on the reasoning herein, we hold the General Assembly acted within the bounds of the North Carolina Constitution and in accordance with its legislative prerogative.

Because section 1D-25 is constitutional, we also address three other issues raised by plaintiffs and K-Mart. They are: (a) whether the $250,000 cap is to be applied per claim, per plaintiff, or per defendant; (b) whether the trial court erred in denying plaintiffs' request for attorney fees; and (c) whether K-Mart is entitled to a new trial.

The pertinent facts are as follows: On 28 April 1998, plaintiffs were walking near a store owned by K-Mart. Defendants Shawn Roberts (Roberts) and Joseph Hoyle (Hoyle), employees of K-Mart, confronted plaintiffs and asked if they had been rummaging through K-Mart's dumpsters. Plaintiffs explained they were merely walking for exercise and had not touched the dumpsters.

The next day, plaintiffs were again walking in the K-Mart parking lot when Roberts and Hoyle approached them. Roberts grabbed Mr. Rhyne, put him in a chokehold and forced him to his knees. Mrs. Rhyne screamed and jumped on Roberts's back. He shook her off, resulting in her falling to the ground. When she tried to help her husband again, Hoyle intervened and pushed her back to the ground.

Shortly thereafter, two police officers arrived. Plaintiffs told the officers they wanted to press criminal charges against Roberts and Hoyle. Meanwhile, Roberts and Hoyle told the police they had seen plaintiffs going through K-Mart's dumpsters and that plaintiffs were guilty of theft and trespass. Roberts and Hoyle subsequently admitted, however, that they had only heard a noise near the dumpsters and assumed it must have been plaintiffs. Nonetheless, K-Mart took out two assault warrants against Mr. Rhyne. The charges were dismissed on 10 June 1998.

Following the altercation, plaintiffs sought medical attention for resulting physical injuries and psychiatric problems. They were diagnosed with adjustment disorders, prescribed medication, and advised to obtain counseling. Mrs. Rhyne also suffered a heart attack. According to expert testimony, the altercation and subsequent events contributed to her heart condition, but the relationship was "unquantifiable." Mrs. Rhyne's medical bills totaled $13,582.40, which included $11,349.50 for treatment of her heart attack. Mr. Rhyne's medical bills and lost wages amounted to $5,376.12.

Plaintiffs filed a complaint against K-Mart, Roberts and Hoyle on 31 December 1998, alleging assault, false imprisonment, battery, malicious prosecution, and intentional infliction of emotional distress. In addition, plaintiffs claimed K-Mart was negligent in the training and supervision of its security personnel. In their prayer for relief, plaintiffs asked for compensatory and punitive damages.

Pursuant to N.C. Gen.Stat. § 1D-30, the trial was bifurcated into compensatory and punitive damages stages. In the compensatory stage, Hoyle was found not liable and, although the jury determined Roberts to be liable, the trial court granted plaintiffs' motion to dismiss with prejudice all claims for damages against him. Plaintiffs did receive a favorable verdict against K-Mart, however, with the jury awarding $8,255 to Mr. Rhyne and $10,730 to Mrs. Rhyne. In the punitive damages stage, with plaintiffs proceeding only against K-Mart, the jury returned a verdict of $11.5 million for each plaintiff. Citing N.C. Gen.Stat. § 1D-25(b), the trial court reduced each punitive damages award to $250,000. Upon plaintiffs' motions, the trial court denied their requests to have the statute declared unconstitutional and for attorney fees. Both plaintiffs and K-Mart appeal.

Plaintiffs' assignments of error include: (a) the trial court's refusal to declare section 1D-25 unconstitutional; (b) the capping of punitive damages on a per plaintiff rather than a per claim basis; and (c) the denial of attorney fees. In its cross-appeal, K-Mart requests a new trial based on its claim that the trial court prejudicially erred during the punitive damages stage in allowing evidence of its discovery misconduct. In the alternative, K-Mart argues the trial court should have applied the punitive damages cap on a per defendant basis with plaintiffs splitting the $250,000.

I. The Constitutionality of Section 1D-25

In their first assignment of error, plaintiffs contend section 1D-25 is unconstitutional because it: (1) violates their right to a jury trial; (2) violates the separation of powers principle; (3) violates the open courts guarantee; (4) constitutes an improper form of special legislation; (5) violates principles of due process, equal protection, and the right to enjoy the fruits of one's own labor; and (6) is void for vagueness.

Section 1D-25 provides:

(a) In all actions seeking an award of punitive damages, the trier of fact shall determine the amount of punitive damages separately from the amount of compensation for all other damages.

(b) Punitive damages awarded against a defendant shall not exceed three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000), whichever is greater. If a trier of fact returns a verdict for punitive damages in excess of the maximum amount specified under this subsection, the trial court shall reduce the award and enter judgment for punitive damages in the maximum amount.

(c) The provisions of subsection (b) of this section shall not be made known to the trier of fact through any means, including voir dire, the introduction into evidence, argument, or instructions to the jury.

N.C. Gen.Stat. § 1D-25 (1999). Plaintiffs' argument is based only on the North Carolina Constitution and thus does not invite federal case law scrutiny by implicating the United States Constitution.

A. Jury Trial

Plaintiffs first contend section 1D-25 is unconstitutional because it violates their right to a jury trial pursuant to Art. I, § 25, which provides: "In all controversies at law respecting property, the ancient mode of trial by jury is one of the best securities of the rights of the people, and shall remain sacred and inviolable." N.C. Const. Art. I, § 25.

Our Supreme Court has held that the right to a jury trial under Art. I, § 25 of the North Carolina Constitution applies only: (1) where the right to a jury trial existed at common law or by statute at the time of the adoption of the 1868 Constitution; and (2) when the cause of action "respects property." State ex rel. Rhodes v. Simpson, 325 N.C. 514, 385 S.E.2d 329 (1989), rev'd on other grounds, 333 N.C. 81, 423 S.E.2d 759 (1992). For a cause of action originating after 1868, the right to a jury trial is contingent upon statutory authority. Id. (citing Groves v. Ware, 182 N.C. 553, 558, 109 S.E. 568, 571 (1921)).

Punitive damages were determined by juries prior to 1868. See Gilreath v. Allen, 32 N.C. 67, 69 (1849). The first part of the test is therefore satisfied, so we proceed to the second. The distinction between causes of action respecting property and those respecting other rights is fundamental and well-established. In Smith v. Campbell, 10 N.C. 590 (1825), our Supreme Court held that:

Property is a thing over which a man may have dominion and power to do with it as he pleases, so that he

...