What Happened on Remand: More On Sivit v. Village Green of Beachwood, L.P

Update: On November 9, 2016, the Supreme Court of Ohio declined jurisdiction in both the appeal and cross appeal in this case.

As I posted here, after the Supreme Court of Ohio reversed and remanded this case to apply the punitive damages cap in R.C. 2315.21(D)(2)(a) to the two million dollar punitive damages judgment, arguing began in earnest over the amount and the distribution of the punitive damages. On remand, the trial court determined that the total amount of the punitive damages should be only $1,537,555.90, and each individual plaintiff group should receive $153,755.59. Village Green, the defendant, and the Gruhins, a plaintiff group that wanted more than an equal share of the punitive damages, appealed.

Village Green argued the total amount of punitive damages should be only $1,194,294, not $1,537,555.90, since among the plaintiff groups in the case were four subrogated insurance companies that had not sought punitive damages, and only the amount awarded to the individual plaintiff groups should have been doubled.

The Gruhins argued they should receive twice the amount of their actual compensatory damages, which would have given them $222,466 instead of $153,755.59.

In an opinion written by Judge Eileen A. Gallagher, and joined by  Judges Keough and Blackmon, the Eighth District Court of Appeals unanimously affirmed in part and reversed in part. The court agreed with Village Green that the total amount of the punitive damages should be only $1,194,294. But the appeals court agreed with the trial court (and thus disagreed with the Gruhins) that the money should be allocated equally among all ten plaintiff groups.  With the new punitive-damages total, each plaintiff group will receive $119, 429.40.

The appeals court decision is an interesting one. The court gave several reasons for finding no abuse of discretion in the trial court’s equal, per capita distribution of punitive damages to each of the ten individual plaintiff groups.

The Gruhins acknowledged that the individual plaintiffs could have entered into an agreement specifying how a punitive damage award should be allocated, and that such an agreement would be enforceable, but denied that any such agreement existed. The appeals court disagreed, and found there was evidence supporting an agreement to share any award equally. The court noted that counsel for all the plaintiffs (before the Gruhins split off and hired their own lawyer) informed Mr. Gruhin of the proposal to divide the award equally, and Gruhin never protested for over two years.

Ultimately, though, the appeals court found it did not need to decide if there was sufficient evidence supporting the finding of an agreement to share equally in the award, because even if the trial court was wrong in finding that such an agreement existed, its decision to make an equal distribution would be affirmed based on the facts and circumstances of the case.

The Gruhins argued that the language of R.C. 2315.21(D)(2)(a) (“The court shall not enter judgment for punitive or exemplary damages in excess of two times the amount of the compensatory damages awarded to the plaintiff from that defendant”) required the trial court to look at the individual compensatory damages awarded to each individual group of plaintiffs and multiply that amount by two. The appeals court disagreed, noting that the purpose of the statute was to limit the punitive damages awarded against a defendant, not to guarantee or entitle a particular plaintiff a particular amount.

The appeals court agreed that when read as a whole, R.C. 2315.21 “seems to contemplate that the trier of fact will make individualized determinations of both compensatory damages to be awarded to a particular plaintiff, (or, in this case, plaintiff groups), and whether a particular plaintiff is entitled to recover punitive damages.” But as the appeals court also notes, nothing in the statute requires individualized jury interrogatories specifying the amount of punitive damages recoverable by each plaintiff, and in this case, at trial, no one asked for such an interrogatory. To the contrary, for strategic reasons, the court surmised, the individual plaintiff claims were presented collectively to the jury, which was asked to consider a punitive damage award to the plaintiffs as a group. The verdict form asked for a group verdict on punitive damages. Since there was no objection to this at trial, the appeals court found that this argument by the Gruhins was waived and now barred by res judicata. And since the jury was not asked to make separate determinations of the amount of punitive damages to each plaintiff group, the appeals court found the allocation of the award properly left to the discretion of the trial court.

Finally, the appeals court rejected the Gruhins’ argument that they were entitled to receive punitive damages in line with their individual award of compensatory damages, just as they would have received had they filed a separate action. The appeals court concluded that it was utterly speculative as to whether the Gruhins would have received anything at all had they, and other plaintiff groups, filed separate lawsuits.

So, bottom line is that the appeals court found no abuse of discretion in a per capita rather than a pro rata distribution of the punitive damage award. Read the entire court of appeals decision here.

Is this the end? We’ll see if the Gruhins try to take the case back to the Supreme Court of Ohio.

 

 

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