What’s On Their Minds: Can Punitive Damages Be Assessed Against a Deceased Tortfeasor’s Estate? Christine Marie Whetstone v. Erin K. Binner, Administrator of the Estate of Roxanne McClellan, Deceased.

Update: On March 15, 2016, the Supreme Court of Ohio handed down a merit decision in this case.  Read the analysis here.

“So your view is that by awarding punitive damages against the estate we will generally tell all similarly situated potential child abusers, that your estate might be affected by what’s happening?” Justice O’Donnell, to counsel for Whetstone.

On October 28, 2015 the Supreme Court of Ohio heard oral argument in the case of Christine Marie Whetstone v. Erin K. Binner, Administrator of the Estate of Roxanne McClellan, Deceased, 2014-1462.  At issue in this case is whether punitive damages against a deceased tortfeasor’s estate are permitted.

Case Background

Christine Whetstone, individually and on behalf of her two minor daughters, filed suit against Whetstone’s aunt, Roxanne McClellan claiming assault, battery, false imprisonment, and intentional infliction of emotional distress, arising out of a physical attack by McClellan on the two girls. McClellan never answered, and a default judgment was entered against her. After a damages hearing was set, McClellan filed a motion for leave to plead, asserting that she was not properly put on notice of the lawsuit and had been receiving chemotherapy. McClellan’s motion was denied, but the damages hearing was continued.

In the interim, McClellan died and her daughter, Erin Binner, was appointed administrator of McClellan’s estate. At the damages hearing, the trial court awarded Whetstone and her children a total of $51,500 in compensatory damages but declined to award punitive damages against McClellan’s estate.

In a split decision, the Fifth District reversed the trial court’s decision and found that punitive damages could be assessed against a deceased tortfeasor’s estate. Read the oral argument preview of this case here.

Key Precedent

R.C. 2305.21 (Ohio’s Survival Statute which reads, “In addition to the causes of action which survive at common law, causes of action for mesne profits, or injuries to the person or property, or for deceit or fraud, also shall survive; and such actions may be brought notwithstanding the death of the person entitled or liable thereto.” (emphasis added.)

R.C. 2311.21 (“Unless otherwise provided, no action or proceeding pending in any court shall abate by the death of either or both of the parties thereto, except actions for libel, slander, malicious prosecution, for a nuisance, or against a judge of a county court for misconduct in office, which shall abate by the death of either party.”)

R.C. 2315.21(Punitive damage statute. Subsection (C) (1) states punitive damages are not recoverable unless the actions of that defendant demonstrate malice or aggravated or egregious fraud or there was ratification by a principal.)(emphasis added.)

Sivit v. Vill. Green of Beachwood, L.P., 2015-Ohio-1193 (The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct, quoting Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638, 651, 635N.E.2d 331 (1994)).

Dardinger, Exr., v. Anthem Cross & Blue Shield Et Al. 2002-Ohio-7113 (In assessing punitive damages and their overarching purpose, “the plaintiff remains a party, but the de facto party is our society, and the jury is determining whether and to what extent we as a society should punish the defendant.”)

At Oral Argument

Arguing Counsel

Charles M. Elsea, Stebelton, Aranda & Snider, L.P.A. Lancaster, for Appellant Erin Binner, Administrator of the Estate of Roxanne McClellan

Grant A. Wolfe, Of Counsel to Rinehart, Rishel & Cuckler, Ltd., Columbus, for Appellee Christine Marie Whetstone, Individually And as Parent and Natural Guardian and Next Friend of O.C. and L.C., Minors.

Binner’s Argument

The court of appeals decision represents a marked departure from the historical and precedential public policy underlying punitive damages. Courts in Ohio have been consistent that punitive damages exist to punish and deter wrongful conduct, not to compensate a plaintiff. No case has ever said that the public policy of punitive damages is to punish or deter—the policy is in the conjunctive. That public policy is inherently undermined by the imposition of punitive damages against the estate of a deceased tortfeasor, and the General Assembly has not expanded that public policy.

Deterrence has two components—specific deterrence and general deterrence. General deterrence depends on the idea of society being warned that individuals will be held primarily responsible for their wrongful conduct. By relying on general deterrence as a public policy against the estate of a deceased tortfeasor, the defendant is being held vicariously responsible via the heirs and beneficiaries of the estate, as well as the creditors of the estate. General deterrence depends on the idea of the wrongdoer being held up in public as an example to others. There is also a fundamental unfairness in punitive damages being attached to probate but not to non-probate assets. So probate beneficiaries will pay a disproportionate share of the tortfeasor’s wrongdoing.

Punitive damages do not accrue at the time of the incident, but are within the discretion of the judge or jury—the right to punitive damages only arises at the moment the jury makes that determination. Imposing punitive damages here would not punish the tortfeasor in this case, would not specifically deter her from anything, and has no meaningful general deterrent effect because of the fact that it is harming innocent beneficiaries.

Whetstone’s Argument

The court should join the minority of jurisdictions that find that general deterrence, rather than punishment and specific deterrence, is the central goal of punitive damages. It is a crucially important societal message that people who are disposed to act as the tortfeasor did here see that if such a person dies, that person doesn’t escape an award of punitive damages. General deterrence by itself is sufficient to sustain an award of punitive damages against the estate of a deceased tortfeasor. General deterrence remains open and is not attenuated or thwarted simply because the tortfeasor dies. In cases where the tortfeasor dies, general deterrence is still available to sustain an award of punitive damages. Deterrence requires a perception by others that they will be punished if they engage in similar conduct.

A default judgment was granted by the trial court in this case on the issue of liability against the tortfeasor while she was still alive. The only thing that was left to be decided was the amount of punitive damages. Admittedly, there is some confusion about when liability arises—is it when the default judgment on liability is entered, or only after the damages hearing is concluded? Whetstone’s position is that the entitlement to punitive damages arises when there is a determination made on the issue of liability. Punitive damages are not a separate cause of action. They are part and parcel of a cause of action, an incident to a cause of action.

Whetstone asks nothing more in this case than that a hearing be held on punitive damages. The trial court can police any problems that might arise because the tortfeasor is deceased. In balancing the equities, who is in a better position to claim innocent status than the five year old who was nearly smothered to death. Whetstone does not seek specifically to deter the heirs at law here, but rather to deter others in the general public who are inclined to engage in the same kind of reprehensible conduct. The beneficiaries bear no greater burden than they would bear if the tortfeasor had survived and had a judgment entered against her.

What Was On Their Minds

Specific v. General Deterrence

Is the purpose of punitive damages just to deter the tortfeasor, or is it so send a message to society as a whole, asked Justice O’Neill? Why does it matter if the tortfeasor is no longer alive?

Would awarding punitive damages after death put people engaged in criminal activity on notice when many of their actions are done in the heat of passion, or out of mental incapacity, or stress, asked Chief Justice O’Connor? Is a tortfeasor likely to be deterred by thinking that her estate may be divided in a way she didn’t want it to be?

Must the court decide whether punitive damages are a personal or a general deterrence, asked Justice Lanzinger? Must the general public be aware that any punitive damage in any case is supposed to deter them from the same conduct?

What deterrence is there for an heir at law, asked Justice O’Donnell?

The Message to be Sent

Wouldn’t diminishing the size of a deceased tortfeasor’s estate send exactly the right message to others who are contemplating such an action, asked Justice O’Neill?

The Position of Other Jurisdictions

The majority view in the country is that an estate cannot be liable for punitive damages of a deceased tortfeasor, noted Justice Lanzinger, who observed that the court of appeals in this case adopted a distinctly minority position in this issue of first impression for the Ohio high court.

Which case from other state supreme courts that have ruled on this is most persuasive, Justice O’Donnell asked appellant. Justice Lanzinger later asked the same question to the appellee.

Now What?

There still needs to be a punitive damages hearing, right, asked Justice O’Neill? Isn’t that what the appeals court found?

What is left here is to figure out the extent of the damages, which would take a hearing, commented Chief Justice O’Connor, noting that the personal representative could challenge the damages claim just as the decedent could have. As far as the trial court is concerned, it makes no difference if the tortfeasor is alive or not. The only thing left to do is to attach a dollar amount to punitive damages? Couldn’t the personal representative present any mitigating factors? Wasn’t the estate present at the compensatory damages hearing?

Could the court decide that default judgment was entered while the tortfeasor was still alive, and thus avoid this whole big issue, asked Justice Pfeifer, in what could be the way out here. Could nonprobate assets be reached if the court were to decide this case narrowly?

Timing

Does it matter that the tortfeasor was alive at the time the judgment was rendered, asked Justice French, in a key question of the day.  Could the court say that in this narrow circumstance, there was a judgment against a living tortfeasor, and then the estate was substituted later, so we should affirm?

In another key question of the day, Justice O’Donnell asked when does the entitlement to punitive damages arise?

Is seeking punitive damages a separate cause of action, asked Justice Lanzinger? Aren’t these damages just a consequence of a finding of liability for a tort?

Does the default establish liability here, asked Chief Justice O’Connor, noting that obviously took place while the tortfeasor was still alive.

Heirs and Beneficiaries

Wouldn’t it make sense to say that any ability a tortfeasor has to pass on an amount of money to his or her heirs should be reduced, given the tortfeasor’s activity, asked Justice French? Isn’t that a deterrent? That there will be less in the estate?

What is the deterrence to the heir of the admitted tortfeasor, asked Justice O’Donnell, noting that an heir is not part of the act of the tortfeasor that gave rise to the cause of action. Isn’t the heir at law the one that bears the burden?

Corporations

Justice Pfeifer expressed his concern about applying this rule to a corporation that had to file bankruptcy. Would the same rule apply, that there could be no punitive damages assessed against a corporation that is in bankruptcy?

The Pertinent Statutes

The punitive damages statute refers to the acts or omissions of that defendant, noted Justice French. Does that also mean the defendant’s estate? Does the estate stands in the shoes of the defendant for the purposes of this statute?

How it Looks from the Bleachers

To Professor Bettman

I teach torts, but am having a hard time predicating this one. I did not sense consensus among the justices here. Justice O’Neill is clearly the most solidly in Whetstone’s camp, believing, as he commented early on, that diminishing the size of a deceased tortfeasor’s estate would send exactly the right message to others who are contemplating similar action. Justice Lanzinger seemed least swayed by that position, as was apparent from her questioning.  She kept coming back to the fact that only a small number of states have adopted the position taken by the majority in the court of appeals, allowing punitive damages to be assessed against the estate of a deceased tortfeasor. She also clearly recognized, correctly in my view, that punitive damages are not a cause of action, so the survival statute doesn’t save them. In this vein, the question of when the entitlement to punitive damages actually arises is an interesting one.  Justice O’Donnell seemed closer to Lanzinger’s position than to O’Neill’s, and most disturbed about the effect on innocent beneficiaries of allowing such damages after the death of the tortfeasor.  And Justice Pfeifer, author of the legendary decision in Dardinger, Exr., v. Anthem Cross & Blue Shield et al. did not seem as enthusiastic about Whetstone’s position as I thought he might be.

A core of the justices—Pfeifer, French, and the Chief (although not at first) seemed willing to entertain a narrower resolution here—to allow the punitive damages in this case because liability was assessed against McClellan while she was still alive, albeit by way of a default judgment. The court could hold that in this limited circumstance, punitive damages could be assessed, with the personal representative defending the tortfeasor’s position at the damages hearing, and saving for another day the question of whether in a case where liability has not been determined while the tortfeasor is still alive, punitive damages can be assessed in that circumstance. Still, as horrendous and incomprehensible as McClellan’s actions were, holding a hearing on punitive damages without her being able to present her own defense is troubling to me. Yes, the estate steps into her shoes, but that’s not quite the same thing.

In response to questioning by the justices about which out-of-state decision was most persuasive to their respective positions, Binner cited the Iowa case of In re Estate of Vajgrt, 801 N.W.2d 570, (2011) and Whetstone cited G.J.D. v. Johnson, 552 Pa. 169, 713 A.2d 1127, (1998)  from Pennsylvania and Haralson v. Fisher Surveying, Inc., 31 P. 3d 114 (2001) from Arizona, which was her side’s first choice. I read all three, and found two things especially noteworthy.  In all three of the cases, the tortfeasor died before liability was determined, thus distinguishing it from this case.  And in all three cases there was a majority and a heated dissent. None was unanimous. All three were well written.  But I found the dissent in Haralson to  be the best and most persuasive of the lot. I hope Justice Lanzinger takes a look at that one, because it seems closest to her position.  It was written by the extremely well regarded former Chief Justice of that court, Ruth McGregor, who was once herself a law clerk to retired U.S. Supreme Court Justice Sandra Day O’Connor. As her  dissent points out in Haralson, it is a fundamental principle of American law that we do not punish an innocent party (the heirs) for another’s wrongdoing.

I certainly favor punitive damages in an appropriate case, and believe in specific deterrence. But despite my notorious plaintiff’s heart, I’m not much of a believer in general deterrence in these non-corporate cases, so I’m with appellant Binner. Do I think preserving punitive damages after the death of a tortfeasor sends a useful general deterrence message? Not really. I’m sure my friends in the plaintiffs’ bar will disagree.  I don’t think a tortfeasor gives an iota of thought ahead of time about how his or her conduct could affect his or her estate, much less take that message from someone else’s misconduct.

To Student Contributor Austin LiPuma

Binner’s argument focuses on the fundamental purpose of punitive damages—to punish and deter a wrongdoer. Shouldn’t the message be sent to the world at large and if so, why does it matter whether the tortfeasor is alive or dead? It does matter because a defendant (the decedent’s estate in a case like this) is being held vicariously liable for the acts of a deceased person. Public policy should not favor innocent beneficiaries being punished for the harmful acts of someone else. When proposed with the analogy, counsel effectively distinguishes a bankrupt corporation and a deceased defendant through how an estate is divided. Counsel had to overcome very pointed questions directly attacking the suggestion that a harmed child should ultimately suffer in favor of a deceased defendant’s egregious acts. However, compensatory damages are categorically separate from punitive damages. Therefore, this is not about limiting the collection of a tort victim, it is about appropriately limiting the availability of punitive damages.

Whetstone’s argument appropriately focuses on the “deterrence” factor involved in punitive damages. Do punitive damages in this case actually put potential defendants who act in a “willful, malicious” way on notice? They do. Even those who commit such heinous acts still, most likely, have an innate desire to protect their assets for their loved ones. Justice French continued to turn the conversation back to statutory interpretation—punitive damages are to be assessed against the literal tortfeasor. Even if that is true, judgment was already entered while the tortfeasor was alive. Furthermore, when looking to statutory authority, the General Assembly has determined that causes of action for injury to one’s person are not abated by death. Turning towards public policy, the “who’s innocent” argument clearly cuts in favor of the victims in tort cases. A child was nearly smothered to death—that child should not be punished because a defendant perished.

Lots of underlying issues were involved here as evidenced by the variety of questions posed. Quite frankly, some of these questions bordered on irrelevancy i.e. “What is the size of the estate?” What matters here, and what both arguments attempted to come back to time and time again, is the driving purposes behind punitive damages. I’m not confident in my prediction but I think it will be a win for Whetstone. The unique nature of the facts here (tortfeasor was alive when default judgment was entered) coupled with the long line of jurisprudence upholding punitive damages as predicated on general deterrence should be enough. However, it will be close and I expect to see a vehement dissent regardless of the outcome.

 

 

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