Waters v. Trenckmann
| Decision Date | 07 December 1972 |
| Docket Number | No. 4087,4087 |
| Citation | 503 P.2d 1187 |
| Parties | 11 UCC Rep.Serv. 712 Alfred B. WATERS, Appellant (Defendant below), v. Ernest H. TRENCKMANN and Marilyn Trenckmann, Appellees (Plaintiffs below). |
| Court | Wyoming Supreme Court |
Walter C. Urbigkit, Jr., and Edward P. Moriarity, of McClintock, Mai, Urbigkit & Moriarity, Cheyenne, for appellant.
Byron Hirst, of Hirst, Applegate & Dray, Cheyenne, for appellees.
Before McINTYRE, C. J., and PARKER, McEWAN and GUTHRIE, JJ.
Ernest H. Trenckmann and Marilyn Trenckmann as buyers entered into a written contract for the purchase of a ranch from Alfred B. Waters. The ranch consisted of some 4,442 acres of deeded land, 3,951 acres of leased lands, and Forest permits in approximately 2,200 acres. The lands were in Platte, Converse and Albany Counties. The purchase included all cattle, horses, hay, machinery and equipment on the ranch.
The agreed purchase price was $725,000. A total of $250,000 was to be paid in 1968 as a down payment. The balance of $475,000 was payable in annual payments of $36,000 each, commencing November 15, 1969.
The sales contract, which had been entered into September 24, 1968, became the subject of a suit initiated by the buyers against the seller May 29, 1970. Plaintiffs' complaint alleged Waters had made certain false factual representations in connection with the sale and that there were numerous breaches of contract and breaches of warranty. It was then alleged, as a result of Waters' breach of contract, breach of warranty, misrepresentations, and the willful, fraudulent and wrongful conduct of Waters, the Trenckmanns suffered damages 'from the failure of Waters to deliver the property purchased.'
Upon trial of the issues joined in plaintiffs' suit, the jury awarded plaintiffs actual damages in the amount of $30,070 and punitive damages in the amount of $30,000. Judgment was entered accordingly and Waters has appealed.
The most important question we have for determination is whether the award for punitive damages can stand. In considering that question, we start with the general rule that damages for breach of contract are limited to pecuniary losses sustained. We believe the rule is well stated in 22 Am.Jur. 2d, Damages § 245, p. 337, in these words:
1
The following cases support and follow the general rule that punitive damages may not be recovered in actions for breach of contract: Continental National Bank v. Evans, 107 Ariz. 378, 489 P.2d 15, 19; Williams v. Speedster, Inc., Colo., 485 P.2d 728, 730; Ash v. Barrett, 1 Ill.App.3d 414, 274 N.E.2d 149, 152-153; Alsip Homebuilders, Inc. v. Shusta, 6 Ill.App.3d 65, 284 N.E.2d 509, 512; Graham v. Turner, Tex.Civ.App., 472 S.W.2d 831, 839; Local 127, United Shoe Workers v. Brooks Shoe Mfg. Co., 3 Cir., 298 F.2d 277, 282, 285; and Green v. DeVoe Sales, Inc., 206 Kan. 238, 477 P.2d 944, 950.
There are matters of special interest in some of the cases we have just listed, which we think should be pointed out. For example, in the case of Ash v. Barrett, at 274 N.E.2d 152-153, the breach claimed was that the defendant refused possession knowing plaintiffs were living in a motel, meanwhile the defendant willfully allowed the house to remain vacant. Punitive damages were claimed on the theory that such damages are permissible in exceptional cases for a breach of contract when the breach amounts to an independent willful tort. The court held both events occurred after the breach and did not make an unusual case for breach of contract; and the breach was properly remedied by compensatory damages.
The idea that recovery is limited to actual damages in contract cases is expressed in Graham v. Turner, at 472 S.W.2d 838. The court held the case there involved fell into the category of a suit for breach of contract, for which the proper redress is a money judgment for actual damages, and for which exemplary damages are not authorized.
In the case we are dealing with, the Trenckmanns were made whole and fully compensated when they were awarded their actual damages. There was no such unusual or exceptional case of breach of contract as would call for compensating them a second time.
In the case of Williams v. Speedster, Inc., at 485 P.2d 730, which we have cited, the court said plaintiff's complaint clearly indicates it does 'sound in contract' and there were no factual allegations which would justify exemplary damages. Also, the court which decided the case of Alsip Homebuilders, Inc. v. Shusta said, at 284 N.E.2d 512, the general rule requires that punitive damages cannot be recovered in an action for breach of contract. It was expressly stated that Illinois seems to adopt the general rule; that the authority is extensive; and that a review of the authority in other jurisdictions confirms that the vest majority does not allow punitive damages to be awarded in contract actions. Numerous cases were cited.
Although appellant's brief cites texts and cases in support of his contention that punitive damages are not recoverable in this case, counsel for the appellees undertakes to defend such damages by the use of general statements without the citation of authority. The subject is treated in appellees' brief in two paragraphs which we will quote:
'The record so far certainly supports a conclusion by the jury that Waters made certain representations, that the representations were false, that Trenckmann relied thereon, that Trenckmann was justified in relying thereon and that Trenckmann was damaged. The jury could conclude from this evidence that Waters acted fraudulently, wilfully or wantonly, justifying a grant of punitive damages. In addition the jury was justified in finding that Waters deliberately tried to break Trenckmann by taking all of his cash including large amounts borrowed at high rates of interest and then acted in such a manner as to make it impossible for him to make subsequent payments. Attention is directed to the following portion of the record (R. 777-778):
(At this point testimony is quoted pertaining to the financial condition of Trenckmann after he made the $250,000 down payment provided for in the sales contract.)
If the Trenckmanns overstretched themselves and agreed to make a larger down payment than they could financially afford, it would not entitle them to punitive damages from Waters. And, if Waters committed any wrongful acts after a contract between the parties had been entered into, the proper remedy would be for breach of contract. Also, if the credibility of Waters and his motives were impeached, that would have nothing to do with the award of punitive damages.
Thus, appellees have offered nothing in justification of punitive damages except breach of contract and a suggestion of fraud. We find nothing in the record to indicate the jury found Waters guilty of fraud nor to indicate the award of punitive damages was based on fraud.
If fraud was present, it would necessarily have to relate to false representations of existing facts made prior to execution of the purchase agreement. Those false representations would have to be representations which were relied on by plaintiffs to their damage. 2 The Trenckmanns have not sought to rescind the purchase contract. If they had known the truth concerning facts which they claim were misrepresented, would they have refused Waters' offer of sale?
Appellant argues that Trenckmanns did not rely on any false representations made by Waters; that the Trenckmanns were admittedly experienced people in the ranching business; that they visited the Waters ranch several times before buying it, inspecting not only the ranch itself but also all livestock, hay, machinery and equipment; and that the Trenckmanns made extensive inquiry in the area concerning the ranch and Waters. On the basis of these undisputed facts, appellant asserts Davis v. Schiess, Wyo., 417 P.2d 19, 22, is applicable and plaintiffs failed to prove they relied upon any misrepresentations made by Waters.
Without deciding whether an element of fraud was present in Waters' representations concerning his property, we can say punitive damages are not recoverable in any event, in this case. For punitive damages, there would have to be conduct on the part of defendant amounting to aggravation, outrage, malice or willful and wanton misconduct. 3
We deem it important to reemphasize at this point that fraud must relate to...
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