Summary
In Bishop, we held that proof of actual damages on the underlying claim is a necessary predicate for an award of punitive damages.
Summary of this case from Moskovitz v. Mt. Sinai Medical CenterOpinion
No. 84-1861
Decided November 13, 1985.
Damages — Punitive damages properly decreased pursuant to Civ.R. 54(C), when — No cause of action simply for punitive damages.
APPEAL from the Court of Appeals for Cuyahoga County.
This appeal arises from a series of cattle investment programs sold by appellees, James R. Grdina and his various business entities, to appellants, Dr. Edward J. Bishop and Dr. Philip R. Suresky. The six contracts which form the subject matter of appellants' suit were entered into between the years of 1971 and 1977, and were made for purposes of income sheltering.
Dr. Bishop entered into two separate contracts with appellees for the sale and maintenance of cattle. Dr. Suresky entered into four separate contracts with appellees: two for the sale and maintenance of cattle, one solely for the sale of cattle, and one solely for the maintenance of cattle. The latter two contracts were signed on the same day (June 29, 1977) and involved the same cattle. Save for these latter two, each contract involved its own group of cattle.
The programs subsequently experienced problems and appellants sued for damages resulting from, inter alia, appellees' alleged fraud and breach of contract. Appellants in their amended complaint prayed for a total of $454,500 in compensatory damages and $650,000 in punitive damages.
The jury returned a verdict awarding appellants a total of $393,368 in compensatory damages and $3,100,000 in punitive damages. The trial judge also awarded $200,000 in attorney fees to appellants.
Included in the total damages awarded were damages relating to the June 29, 1977 contracts. Dr. Suresky was awarded $106,500 in compensatory damages as to the maintenance contract, and $500,000 in punitive damages as to the sales contract. No compensatory damages were awarded as to the sales contract.
The court of appeals upheld both assignments of error in reversing the judgment of the trial court. First, the $500,000 in punitive damages awarded on the 1977 contract was reversed on grounds that punitive damages may not be awarded without concurrent compensatory damages. Second, the total of punitive damages awarded was decreased to $600,000 in accord with Civ. R. 54(C).
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Joseph W. Diemert, Jr. Assoc. Co., L.P.A., Joseph W. Diemert, Jr. and Thomas M. Hanculak, for appellants.
Bernard, Haffey Bosco Co., L.P.A., Edward G. Bohnert and J. Ross Haffey, Jr., for appellees.
The issues presented in this appeal are: (1) whether the $500,000 punitive damage award as to the 1977 sales contract was properly stricken; and (2) whether the total punitive damages awarded was properly decreased pursuant to Civ. R. 54(C). We affirm on both issues.
I
This court stated in paragraph one of the syllabus in Richard v. Hunter (1949), 151 Ohio St. 185 [39 O.O. 24], that "[e]xemplary or punitive damages may not be awarded in the absence of proof of actual damages." This position was recently upheld in Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, where the court states at 82: "* * * [W]e believe that punitive damages are highly irregular absent proof of any actual damages."
Appellants seize upon this language from Seasons Coal Co. and claim that theirs is an example of such a "highly irregular" situation. Appellants argue that the two June 29, 1977 contracts were inseparable, in that they dealt with the same subject matter and involved essentially the same parties. Thus, it is claimed, the compensatory damages awarded as to the maintenance contract provide support for the punitive damages awarded on the sales contract.
We decline, however, to adopt appellants' reasoning. The purpose of the Richard rule is to keep the punitive damages awarded a mere incident of the cause of action, rather than let it become a cause of action in and of itself. Punitive damages are awarded as punishment for causing compensable harm and as a deterrent against similar action in the future. No civil cause of action in this state may be maintained simply for punitive damages. Schumacher v. Siefert (1930), 35 Ohio App. 405.
In this case, a contract was entered into on June 29, 1977 by Dr. Suresky, as purchaser, and one of the appellee business entities, as seller. The contract was allegedly fraudulent, and the purchaser sued. The jury awarded no compensatory damages, but did award $500,000 in punitive damages on this contract. Such an award is legally unsupportable, as the jury found no actual damages resulting from the claimed fraud. This court further finds no proof of actual damages flowing from any actions of this appellee pertaining to this contract. The presence of a second contract signed on the same day which involved the same parties and the same cattle is not relevant to the contract at issue. Thus we affirm the reversal of the award of $500,000 in punitive damages.
II
Civ. R. 54(C) reads in pertinent part: "* * * [A] demand for judgment which seeks a judgment for money shall limit the claimant to the sum claimed in the demand unless he amends his demand not later than seven days before the commencement of the trial." The Civil Rules are, of course, the law of this state with regard to practice and procedure in our state courts. Section 5(B), Article IV, Ohio Constitution.
Civ. R. 54(C) is clear on its face. No damages awarded may exceed the prayer that is in effect on the sixth day prior to trial. In this case, the punitive damages awarded greatly exceeded appellants' prayer, and the court of appeals properly reduced the award to conform to the requested amount.
Appellants claim that such a rule leads to an incongruous situation in that if no punitive damages are requested they may be awarded, but that if a request is made the award may not exceed the request. Thus, it is claimed, the better practice for a plaintiff would be to either ask for nothing or ask for an excessive amount.
Civ. R. 54(C) does not draw a distinction between compensatory and punitive damages. Both types of damages are subject to the rule. A major purpose of the limitation in the rule is to put the defendant on notice prior to trial as to his potential liability. The Ohio rule was specifically drafted to be distinguished from its federal counterpart which permits an award that exceeds the prayer. See Fed.R.Civ.P. 54(c) ; Staff Notes to Civ. R. 54(C).
Fed.R.Civ.P. 54(c) states:
"A judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment. Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings."
Plaintiffs in this state are thus forced to determine the approximate amount of their total damages prior to trial. Punitive damages are to be approximated as well as compensatory damages by determining the amount which would sufficiently punish and deter the defendant. Nothing prevents the unsure plaintiff from erring on the high side. The duty of the jury (or trial judge) is to match the damages to the proof brought forth. Further, the jury (or trial judge) may award punitive damages without a request therefor, as long as the total award does not exceed the compensatory request. Civ. R. 54(C). Thus, we affirm the reduction of the punitive damages awarded.
For the reasons stated, the judgment of the court of appeals is affirmed.
Judgment affirmed.
CELEBREZZE, C.J., SWEENEY, LOCHER, HOLMES, C. BROWN, DOUGLAS and WRIGHT, JJ., concur.