Hamilton Development Co. v. Broad Rock Club, Inc.

JUSTICE WHITING,

concurring in part and dissenting in part.

I agree with the majority’s holding with the exception of its affirmance of the punitive damage award. In my opinion, this award is so destructive to the defendant as to indicate that it was not the product of a fair and impartial decision. The Gazette, Inc. v. Harris, 229 Va. 1, 51, 325 S.E.2d 713, 746-47 (1985).

*47The majority recognizes that we should consider the net worth of the defendant in deciding whether the punitive damage award is excessive. Although the purpose of punitive damages is “to punish the defendant for [its] conduct and to serve as a warning to others not to engage in similar activity,” it should not be so large as to be destructive. The Gazette, 229 Va. at 50, 325 S.E.2d at 746. In The Gazette, we indicated that a $250,000 damage award with interest from the date of the tort was destructive and, therefore, excessive even though the defendant estimated his net worth as close to one million dollars. Id. at 51, 325 S.E.2d at 746-47.

Here, the evidence indicates that the defendant’s net worth is considerably less than one million dollars. The only evidence of its assets and income contained in the record are two schedules prepared by its certified public accountant. One statement shows that, for the year ending December 31, 1989 (the year of the tort), the corporation’s “Gross profit on lot sales” was $350,289.03 (the figure used by the majority). However, the statement also revealed that the company’s net income, excluding distributions to its officers or stockholders, was $167,597.48. The latter, not the former, is the figure I believe that the majority should have used in considering the corporation’s income from lot sales for 1989.

Additionally, the majority notes that, as of December 31, 1989, the corporation’s two principals had received $670,160 in “distributions” from the corporation. However, these distributions could not have come from corporate income earned during the year of the tort since the corporation’s net profit for that year was only $167,597.48. Moreover, the only evidence of the net worth of the corporation at the end of 1992 was that shown on its balance sheet of $190,488.58.

Given all these circumstances, I would hold that the $200,000 punitive damage award is excessive. Accordingly, I would reverse the award of punitive damages and remand the case, with direction to the trial court to require the plaintiff either to remit a substantial amount of his punitive damage recovery or to submit to a new trial confined to the issue of punitive damages.