Austin v. Stokes-Craven Holding Corp.

Justice PLEICONES,

concurring in part and dissenting in part.

I respectfully concur in part and dissent in part. Specifically, I agree that Stokes-Craven has not shown an abuse of discretion in the trial court’s decision to qualify Morris as an expert, State v. White, 382 S.C. 265, 676 S.E.2d 684 (2009), although I would give no weight to the fact that Morris had been qualified as an expert on several other occasions. Cf. State v. Jones, 383 S.C. 535, 681 S.E.2d 580 (2009) (despite fact that other jurisdictions had permitted same witness to *60testify as expert in area, trial court abused its discretion in admitting the evidence). I also agree with the majority that Stokes-Craven was entitled to a directed verdict on the Federal Odometer Act claim, and that it cannot prevail on its new trial argument. See Camden v. Hilton, 360 S.C. 164, 600 S.E.2d 88 (Ct.App.2005) (inconsistent verdict allegation waived if not raised before jury is dismissed). Finally, I agree with the majority that the trial judge properly denied Austin’s request for prejudgment interest.

I agree with Austin that the issue whether Stokes-Craven was entitled to a directed verdict because Austin offered no evidence of fair market value is not preserved for appeal as this failure of proof was not raised as a ground for a directed verdict. Consequently, whether it was raised in the judgment non obstante veredicto (JNOV) motion and/or is discussed in the detailed post-trial memorandum is irrelevant. E.g., In re McCracken, 346 S.C. 87, 551 S.E.2d 235 (2001) (only issues raised at directed verdict can properly be raised a JNOV). Moreover, since there was no contemporaneous objection either to the expert’s or to the owner’s testimony that the truck had a value of $0, I agree that there was evidence of value for the jury’s consideration. E.g., Cantrell v. Carruth, 250 S.C. 415, 158 S.E.2d 208 (1967) (evidence received without objection becomes competent and cannot be disregarded when considering directed verdict motion). Had the issue been properly preserved, however, I would agree that Austin failed to present any competent evidence of the truck’s fair market value, which clearly is more than $0.

Stokes-Craven also contends that it was entitled to a new trial as there is no evidence in the record to support the jury’s verdict valuing the truck at $26,371.10, that is, the amount Austin paid for it. Since there was no objection to Austin’s or Morris’ $0 value testimony, there is evidence in the record to support this verdict.12 I therefore agree with the majority that Stokes-Craven has not shown an abuse of discretion in *61the trial court’s denial of a new trial. E.g., Dillon v. Frazer, 383 S.C. 59, 678 S.E.2d 251 (2009).

On appeal, Stokes-Craven contends the trial judge erred in allowing Disher to testify to safety issues. In my view, this issue is not preserved for appellate review since the judge sustained both of Stokes-Craven’s objections to Disher’s answers which exceeded the scope of Disher’s expertise. See State v. Thompson, 304 S.C. 85, 403 S.E.2d 139 (Ct.App.1991) (where objection sustained and no further relief is sought, no issue is preserved for appeal as appellant received all relief requested from trial judge). As I do not view the issue as preserved, I do not join the majority’s discussion of prejudice.

Unlike the majority, I would reduce the punitive damages award here. Stokes-Craven challenges the punitive damages award on three grounds arguing that:

1) since the actual damage award of $26,371.10 must be reversed, the punitive damage award cannot stand;
2) the punitive award is based on an inappropriate closing argument; and
3) the award is unconstitutionally excessive.

As explained above, no issue relating to the actual damage award is preserved for appellate review, and thus Stokes-Craven’s first argument fails.

The question of improper closing argument is also not preserved. Austin’s counsel argued that, extrapolating from other testimony, Stokes-Craven’s total profit for 2005 was $1,365,000. Stokes-Craven did not object to this argument. In its order reviewing punitive damages, the trial judge wrote that the witness had testified to this “total profit,” which is incorrect. However, Stokes-Craven never called this misstatement to the trial judge’s attention. Given that there was no objection to the extrapolation of total profit in Austin’s closing argument, its alleged impropriety cannot be the basis for reversal here. E.g., Ligon v. Norris, 371 S.C. 625, 640 S.E.2d 467 (Ct.App.2006). Further, the trial court’s unobjected-to misstatement in its order reversing punitive damages is not a basis for reversal. E.g., State v. Covert, 382 S.C. 205, 675 S.E.2d 740 (2009) (error must cause sufficient prejudice to warrant reversal).

*62The third ground urged for reversal is Stokes-Craven’s argument that the punitive damages verdict of $216,600 is unconstitutionally excessive. In Mitchell v. Fortis Ins. Co., 385 S.C. 570, 686 S.E.2d 176 (2009), we articulated a reformulated three-part test to be used in conducting a post-judgment review of a punitive damages award: the reprehensibility of the defendant’s conduct; the ratio between the actual or potential harm suffered by the plaintiff and the amount of the punitive damages award; and the difference between the punitive damages verdict and civil penalties authorized in comparable cases. I have reviewed each part below.

1. Reprehensibility

In my view, it is reprehensible to misrepresent a warranty, and to deny that the vehicle had been wrecked when asked directly. I do not find it reprehensible, however, to vaguely confirm the buyer’s guess as to the identity of the truck’s prior owner. I find the warranty issue was mitigated since, when the misrepresentation/misunderstanding was discovered about two months after the purchase, Stokes-Craven’s offered to “trade [Austin] out of the truck.” As to the vague confirmation by Stokes-Craven as to the truck’s prior owner, i.e., “Yeah, I believe that is his truck,” I do not find the action particularly despicable. I am, however, deeply troubled by Stokes-Craven’s misrepresentation that the truck had not been wrecked. My concern is tempered somewhat by the testimony of Austin’s own expert Disher that “anybody that [sic] had their eyes open and was looking ... could tell that there’d been a massive amount of repairs done to that vehicle” in light of Austin’s testimony that he “used his training as a mechanic to examine the [truck’s] outside and its underside.” The misrepresentation is reprehensible: whether Austin was misled is questionable.

In short, I find the conduct mildly reprehensible. Unlike the majority, I find no evidence that Stokes-Craven “forged” Austin’s signature on the “Buyers Guide,” only evidence that Austin denied signing it. Finally, given that we have held the trial judge should have granted a directed verdict on the Federal Odometer Act claim, I do not agree that we should rely on evidence of Stokes-Craven’s practice of not showing titles to customers, evidence admitted only in an attempt to *63prove the Odometer Act claim, as probative of reprehensibility.

2. Ratio

Although I find that Stokes-Craven did not preserve its objections to the testimony that the fair market value of the truck was $0, in viewing this ratio guidepost Fortis instructs we need not always compare the punitive award to the actual damages.

Here, the truck obviously had residual value, either as scrap or for its intended purpose in light of the evidence that Austin continued to drive the truck at the time of the trial, more than four years after it was purchased. In my view, the actual damage award far exceeds the true value of any harm or potential harm suffered by Austin.

On a pure ratio basis, the relationship between the actual/punitive awards is 1:8.21. In my view, this ratio is, as the majority acknowledges, “high,” especially since I view the actual damages award as unreliable. Looking at the ratio in light of the other factors to be considered under Fortis, I find the punitive damages awarded here will deter Stokes-Craven from making misrepresentations in the future; that the $216,000 awarded is reasonably related to the harm likely to result from such conduct; and that Stokes-Craven has the ability to pay. I therefore reluctantly conclude that ratio does not provide a basis to reverse or reduce the punitive damage award.

The final guidepost under Fortis is a comparison of the $216,000 to civil penalties authorized in comparable cases. In my view, the closest comparable statutory scheme is the Motor Vehicles Dealers Act, which admittedly does not provide for civil penalties. While the jury found a violation of that statute here, it found no punitive damages were warranted. Under this Act, punitive damages can be awarded if the defendant acted “maliciously,” but any such award is capped at three times the actual damages awarded. S.C.Code Ann. § 56-15-110(3) (2006). Here, the maximum “statutory penalty” would have been $79,113.30 in light of the actual damages award of $26,371.10.

In short, the reprehensibility is mild, the ratio is high, and the comparable penalty less. Viewing these three guideposts, *64I find the verdict here constitutionally excessive, and would remit the punitive award to $100,000. Compare Fortis, supra (partially remitting punitive damages award after appellate review).

I agree with the majority that a plaintiff who elects to receive damages awarded under a common law theory may also be entitled to recover statutory costs and attorneys fees to which he is entitled under a separate verdict, without running afoul of the public policies underlying the doctrine of election of remedies. See, e.g., United Labs., Inc. v. Kuykendall, 335 N.C. 183, 437 S.E.2d 374 (1993). As explained below, however, I do not believe this issue is preserved for our consideration.

Here, Austin sought attorneys’ fees under the Dealers Act and also sought reasonable attorneys’ fees under the Odometer Act. The trial judge awarded him attorneys’ fees under the Odometer Act, restricting the amount to fees and costs reasonably and necessarily incurred in prosecuting that cause of action. The majority has concluded that Austin’s Odometer Act claim must fail. In my view, his claim for attorneys’ fees and costs dies with it.

On appeal, Austin maintains the trial court erred in requiring him to elect between punitive damages under the fraud or negligence verdict and his costs and fees under the Dealers Act. In my view, this issue is not preserved. After the court ruled that Austin must elect between the Dealers Act verdict, the fraud verdict, and the negligence verdict, but did not rule on this issue involving an election between punitive damages and statutory fees, Austin filed no motion to alter or amend. Since this issue was not ruled on below and no motion to alter or amend was made, no issue regarding the availability of Dealers Act fees and costs is preserved for our review. E.g., Metts v. Mims, 384 S.C. 491, 682 S.E.2d 813 (2009).

I also disagree with the majority’s holding that, pursuant to Taylor v. Nix, 307 S.C. 551, 416 S.E.2d 619 (1992), a plaintiff entitled to fees under the Dealers Act need not segregate the amount of attorney time and costs attributable to that claim and recover only these sums. That opinion holds:

The defendant’s attorney argued fees related to the [non-Dealers Act] cause of action should have been excluded. *65We agree. However, precisely what fees were unrelated to the statutory action were not presented to the lower court ... [T]he party asserting the right to attorneys fees [must] produce an itemized affidavit of their fees that they believe are related to the statutory claim. The opposing party then has the burden of showing which of the fees are clearly unrelated.

Taylor v. Nix, 307 S.C. at 557, 416 S.E.2d at 622.

The only attorneys’ fees affidavit in this record was submitted by Austin’s counsel prior to the court’s ruling on the election of remedies issues, and makes no pretense of separating fees incurred only in pursuit of the Dealers Act or the Odometer Act. He therefore did not meet even the threshold requirement of Taylor v. Nix, supra.

Overlooking for the moment that the issue is not preserved, I disagree with the majority that we may award all fees and costs sought on this record, given the applicable law. This is especially so since in making the fees and costs award Austin sought under the Odometer Act, the trial judge honored Taylor v. Nix: he required Austin to submit a new affidavit identifying fees and costs attributable to that cause of action, and gave Stokes-Craven the opportunity for “input” following submission of that affidavit. Presumably, the trial judge would have followed this same procedure had he made an award under the Dealers Act.

Austin sought attorneys’ fees and costs under two separate statutes. The judge awarded them under one, and Austin did not object. Nowhere below did Austin specify he sought to recover fees and costs incurred in prosecuting the Odometer Act claim in addition to fees and costs incurred in pursuing the Dealers Act claim.

I concur in part and dissent in part.

. I do not agree, however, with the suggestion that Stokes-Craven's refusal to allow Austin's request to return the truck for a full refund permits Austin to seek rescission damages in a breach of contract suit. In my view, Stokes-Craven was under no obligation to honor Austin's request.