In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-2598
MARIA F. JUAREZ
Plaintiff-Appellant,
v.
MENARD, INC.,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 02 C 55—Rudy Lozano, Judge.
____________
ARGUED DECEMBER 1, 2003—DECIDED APRIL 26, 2004
____________
Before POSNER, EASTERBROOK, and ROVNER, Circuit
Judges.
ROVNER, Circuit Judge. Menards,1 a chain of home
improvements stores operates under a business model
which combines warehouse with retail store. Customers
make their selections from merchandise displayed on lower
shelves and excess merchandise is stored on shelves high
above. Consequently, employees at Menards often use ma-
chinery to load and unload merchandise from high shelves
1
Although the name of appellee corporation is Menard, Inc., the
stores owned by Menard are called “Menards.”
2 No. 03-2598
at the same time that customers are shopping in the store.
On January 19, 2002, two Menard employees were stocking
doors in the millwork department of a Menards in
Schererville, Indiana, when the doors they were stocking
onto a high shelf on one side of an aisle pushed up against
a steel door perched on a storage shelf high above the
adjacent aisle. The steel door fell from its shelf, hitting
Maria Juarez, and, according to Juarez, broke four verte-
brae in her back, and caused head injuries, blurred vision,
and permanent back and neck injuries.
Juarez filed a complaint in the district court invoking
diversity jurisdiction pursuant to 28 U.S.C. § 1332, and
seeking compensatory and punitive damages for her in-
juries. Prior to a trial on the amount of Menard’s liability,
Menard filed a motion asking the district court to grant
summary judgment on Juarez’s punitive damages claim,
alleging that, even taking the facts in the light most fa-
vorable to Juarez, a reasonable jury could not conclude that
Menard’s actions constituted the type of intentional conduct
for which a reasonable jury could award punitive damages.
The district court agreed, and on appeal its grant of sum-
mary judgment is subject to our de novo review. Lang v. Ill.
Dept. of Children and Family Sevs., 361 F.3d 416, 418 (7th
Cir. 2004).
Juarez proceeded to trial on her remaining claims where
a jury determined that she was entitled to $385,000 in
compensatory damages.2 She now appeals the district
court’s summary judgment determination on punitive dam-
ages maintaining that because Menard knew of the risks of
falling merchandise but consciously disregarded those risks,
she is entitled not only to the compensatory damages
awarded by the jury, but to punitive damages as well.
2
As Menard admitted liability, the only issue for the jury to
decide was the amount Menard should compensate Juarez for her
injuries.
No. 03-2598 3
As support for her claim that Menard knew of but
disregarded the risks of falling merchandise, Juarez points
to several facts, the truth of which we must assume in our
review of the grant of summary judgment. Frobose v. Am.
Sav. and Loan Ass’n of Danville, 152 F.3d 602, 604 (7th Cir.
1998). First, Juarez claims that Menard required all
employees to watch a videotape of an episode of the televi-
sion show “Inside Edition,” which featured a story regarding
the dangers of falling merchandise at Home Depot, a
competing chain of warehouse hardware stores. The video-
tape chronicles the dangers associated with this shopping
format and mentions safeguards and procedures used by
Home Depot to reduce the likelihood of injuries. Menard,
she claims, failed to implement similar safety procedures
such as using fall protection, cordoning off aisles, warning
customers of the dangers of falling merchandise, or keeping
customers away from merchandise while employees load
and unload shelves. In fact, Juarez claims that Menard
specifically prohibited employees from cordoning off aisles
and posting warning signs in “high risk aisles” so as not to
ruin the “shopability” of those aisles. Finally, Juarez argues
that Menard knew of the dangers of this type of accident
because between June 28, 1997, and January 19, 2002,
merchandise fell and injured customers on sixteen separate
occasions.
Juarez does not challenge the jury’s verdict awarding her
$385,000 in compensatory damages as unsatisfactory, and
theoretically at least, she has been made whole by that
award. Punitive damages, however, go beyond compen-
sating a tort victim for a cognizable wrong. They are de-
signed to deter and punish wrongful activity, and as such,
are quasi-criminal in nature. Cheatham v. Pohle, 789
N.E.2d 467, 471 (Ind. 2003). Under Indiana law, which we
must apply in this diversity action, (see Erie R.R. Co. v.
Tompkins, 304 U.S 64, 78 (1938)) civil plaintiffs have no
right to receive punitive damages. Cheatham, 789 N.E.2d at
4 No. 03-2598
472. And, in fact, the Indiana General Assembly has
demonstrated a disinclination toward allowing unchecked
punitive damages awards by enacting legislation that limits
the amount of money a plaintiff may receive from a punitive
damages award (Ind. Code § 34-51-3-6) and by requiring
that a plaintiff establish the facts warranting an award of
punitive damages by clear and convincing evidence rather
than the usual preponderance of the evidence standard.
Ind. Code § 34-51-3-2. Thus in Indiana, before a court may
award punitive damages, a plaintiff must demonstrate by
clear and convincing evidence that the defendant acted with
malice, fraud, gross negligence or oppressiveness that was
not the result of mistake of fact or law, honest error of
judgment, overzealousness, mere negligence, or other
human failing. USA Life One Ins. Co. v. Nuckolls, 682
N.E.2d 534, 541 (Ind. 1997); Bell v. Clark, 670 N.E.2d 1290,
1294 (Ind. 1996) (incorporating by reference Bell v. Clark,
653 N.E.2d 483, 490 (Ind. App. 1995)); Romine v. Gagle, 782
N.E.2d 369, 384 (Ind. App. 2003) transfer denied, 804
N.E.2d 750; Wohlwend v. Edwards, 796 N.E.2d 781, 784
(Ind. App. 2003). Moreover, a trier of fact is not required to
award punitive damages even after finding all of the facts
necessary to justify the award. Cheatham, 789 N.E.2d at
472. The requirements for an award of punitive damages,
therefore, go far above and beyond those required for a
finding of negligence. Menard does not dispute that it was
negligent in allowing this accident to happen. It argues,
however, that it did not have the requisite intent needed for
an award of punitive damages.
Juarez begins her argument for punitive damages with
the premise that “[i]f Menard knew of but disregarded the
harmful consequences of its conduct, punitive damages
would be appropriate.” Appellant’s Brief at 9. For this prop-
osition, she cites Purnick v. England, 269 F.3d 851 (7th Cir.
2001). But her paraphrased reference to Purnick over-
simplifies its statement of Indiana law and omits the
No. 03-2598 5
critical element of conduct warranting an assessment of
punitive damages—conscious and intentional misconduct.
In fact, Purnick states that a plaintiff may recover punitive
damages “only if he can show by clear and convincing
evidence that the defendant engaged in conscious and
intentional misconduct that he knew would probably result
in injury.” Id. at 852 (emphasis ours). It is not enough that
the tortfeasor engage in conduct that she knows will
probably result in injury. After all, most business owners
understand that their operations pose some level of risk
of injury to consumers. The tortfeasor must act with con-
scious indifference or heedless disregard of the conse-
quences of her actions. Orkin Exterminating Co., Inc. v.
Traina, 486 N.E.2d 1019, 1023 (Ind. 1986). Other Indiana
courts have described this consciousness and intention
as requiring a show of willful and wonton conduct or a
“quasi-criminal state of mind.” Stroud v. Lints, 760 N.E.2d
1176, 1179 (Ind. App. 2002), vacated on other grounds, 790
N.E.2d 440 (Ind. 2003); Mitchell v. Stevenson, 677 N.E.2d
551, 564 (Ind. App. 1997). It was this consciousness and
intent—or quasi-criminal state of mind—that the district
court found lacking when it concluded, based on the evi-
dence presented by Juarez, that no reasonable jury could
impose punitive damages. Juarez v. Menard, No. 2:02-CV-
55, slip op. at 18 (N.D. Ind. May 15, 2003). And upon our de
novo review, we must agree.
As evidence that Menard knew of but disregarded the
harmful consequences of its behavior, Juarez points to the
“Inside Edition” videotape which depicts injuries and
fatalities from falling merchandise at Home Depot. Juarez
maintains that not only was Menard aware of the video, but
also that it required all of its employees to watch it. As the
district court noted, nothing in the “Inside Edition” video-
tape, however, suggests that stores like Menards should
keep customers out of adjacent aisles when employees are
stacking merchandise. Id. at 15. The “Inside Edition” story
6 No. 03-2598
notes that it is Home Depot’s policy to rope off the aisles
where merchandise is being loaded, to use spotters to
monitor the area around heavy machinery, and to shrink-
wrap merchandise stored on high shelves to prevent stray
pieces from falling. The videotape story does not discuss
merchandise falling in adjacent aisles at all. Consequently,
the “Inside Edition” story gave Menard no additional
knowledge about the risk of merchandise falling into
adjacent aisles. Furthermore, even if Menard had instituted
all of the safety procedures mentioned in the “Inside Edi-
tion” story, Juarez still may have been injured by a steel
door falling in the aisle adjacent to where employees were
loading merchandise.
Perhaps, Juarez might argue, our inquiry regarding
Menard’s knowledge is too narrow. If Menard knew that
customers could be injured when employees stocked mer-
chandise in the same aisles in which those customers were
shopping, it must also have known that customers could be
injured if employees accidentally pushed too hard on mer-
chandise on one side of a shelf, knocking over merchandise
on the adjacent shelf. But even if we were to impute this
knowledge to Menard, Juarez still fails to demonstrate that
Menard’s actions rose to the level of intentional, quasi-
criminal conduct that Indiana courts require before award-
ing punitive damages. See, e.g., Cheatham, 789 N.E.2d at
470 (wife awarded punitive damages after former husband
distributed sixty copies of nude photographs of wife along
with her name, her work location and phone number, her
new husband’s name and her attorney’s name around the
small community where both parties still lived); Bell, 670
N.E.2d at 1294, incorporating Bell, 653 N.E.2d at 490
(upholding punitive damage award against lawyer who
unfairly and intentionally impugned client/ business
partner’s reputation for honesty, leading to his ouster as
general partner of the business deal and years of litigation);
Mitchell, 677 N.E.2d at 564 (daughter of decedent awarded
No. 03-2598 7
punitive damages after decedent’s widow secretly disin-
terred his remains and removed headstone as retribution
for daughter’s success in a will contest giving daughter
primary responsibility for maintaining decedent’s grave and
monument); Stroud, 760 N.E.2d at 1179 (upholding punitive
damage award to injured passenger of drunk driver who
drank excessively, drove ninety-four miles an hour past a
stopped line of traffic, through a stop sign, and into another
vehicle); Romine, 782 N.E.2d at 384-85 (landowner awarded
punitive damages after neighbor with whom he had been
involved in contentious litigation, maliciously built a dam-
like berm causing groundwater to swell on and damage
landowner’s property).
Similarly, the Schererville Menards’ record of sixteen
previous injuries involving falling merchandise does little
to bolster Juarez’s claim that Menard disregarded known
risks.3 The evidence Juarez submitted regarding other
injuries occurring in the Schererville Menards store over a
five-year period contains no detail regarding how those
injuries occurred. Any or all of these injuries may have been
due to customer negligence or other factors unrelated to
merchandise stocking. Without knowledge of how these
accidents occurred, no reasonable jury could use this evi-
dence to find by clear and convincing evidence that Menard
intentionally disregarded a known risk in a willful, wonton,
or quasi-criminal manner.
Nor could a jury come to that conclusion from the evi-
dence presented in employee Nick Orange’s affidavit.
Orange was one of the employees stocking merchandise
when the door fell into the adjacent aisle injuring Juarez.
In an affidavit submitted to the district court, Orange
3
Juarez makes no mention of these incidents of falling merchan-
dise in the argument section of her brief. Because she mentions
these incidents in her fact section, however, we discuss what, if
anything, knowledge of these prior incidents contributes to
Menard’s liability for punitive damages.
8 No. 03-2598
stated that employees attempted to warn Menard managers
of the dangers of falling merchandise, and even attempted
to implement their own safety procedures by cordoning off
aisles and posting homemade paper signs stating, “Do Not
Enter.” The affidavit, however, does not indicate whether
the employees warned Menard of the risk of merchandise
falling into adjacent aisles, and as it is undisputed that
Menard had knowledge of the general risk of falling
merchandise, Orange’s affidavit adds little to the mix. Nor
does the affidavit tell us whether the employees attempted
to utilize their homemade safety measures in adjacent
aisles, and thus we do not know whether the safety mech-
anisms, cobbled together by the employees and suggested to
management, would have been any more successful in
preventing Juarez’s accident than the safety procedures
already in place.
Furthermore, Menard’s prohibition on employee-devised
safety measures provides insufficient evidence of malice,
gross negligence, or wanton or willful conduct. Menard may
have had legitimate reasons for prohibiting employees from
creating their own solutions to perceived safety problems;
perhaps Menard was concerned that homemade safety
remedies might spur, in turn, their own unknown risks or
that they might lull employees into a reduced state of
vigilance while loading and unloading merchandise. In any
case, although it might be wise for an employer to listen to
the concerns of those who see workplace dangers firsthand,
Juarez has not offered any evidence from which a reason-
able jury could find, by clear and convincing evidence, that
Menard’s refusal to heed employees’ safety suggestions,
constituted the type of conduct for which punitive damages
could be awarded.4
4
As both Menard and the district court point out, Orange’s
affidavit presents some evidentiary problems. Evidence presented
to defeat a summary judgment motion need not be in admissible
(continued...)
No. 03-2598 9
Menard admitted liability for the accident and a jury
awarded Juarez $385,000 in compensatory damages for her
injuries. The only question presented by this appeal then is
whether Menard acted with malice, fraud, gross negligence
or oppressiveness which was not the result of mistake of
fact or law, honest error or judgment, overzealousness,
mere negligence or other human failing. Although Menard’s
failure to protect customers from falling merchandise
pushed by employees loading stock in an adjacent aisle was,
as Menard admits, negligent, it did not constitute the type
of willful and wanton or quasi-criminal conduct for which
punitive damages may be assessed. Consequently we
AFFIRM the decision of the district court.
(...continued)
form, but it must be admissible in content. Payne v. Pauley, 337
F.3d 767, 775 n.3 (7th Cir. 2003), citing Stinnett v. Iron Works
Gym/Executive Health Spa, Inc., 301 F.3d 610, 613 (7th Cir.
2002). Consequently, affidavits submitted in an attempt to thwart
summary judgment must be based on personal knowledge as
required by both Federal Rule of Civil Procedure 56(e)
(“[s]upporting and opposing affidavits shall be made on personal
knowledge”), and by Federal Rule of Evidence 602 (“A witness
may not testify to a matter unless evidence is introduced sufficient
to support a finding that the witness has personal knowledge of
the matter.”). Payne, 337 F.3d at 772. Orange states that he had
no personal knowledge of the other incidents of falling merchan-
dise striking customers. (Juarez App. at 32) He also states that
“[t]he danger of falling merchandise and striking customers [sic]
was brought to the attention of management,” but we do not know
by whom. Id. Likewise, we do not know the basis for his statement
that “management was indifferent to the issue and the danger
created.” Id. Despite these evidentiary problems, even were we to
accept the truth of all of Orange’s assertions, we would still find
that Juarez did not present sufficient evidence for a reasonable
jury to award punitive damages.
10 No. 03-2598
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-26-04