Case 11-1 Young v. Becker
& Poliakoff
Court of Appeals of
Florida, Fourth District 88 So.3d 1002 (2012)
Jacquelyn Young
hired the law firm of Becker &
Poliakoff to represent her in her federal employment discrimination lawsuit
against her employer. The firm associate that filed the action made a mistake
by attaching the wrong U.S. Equal Employment Opportunity Commission (EEOC)
right-to-sue letter. The court dismissed the claims. The law firm did not try
to re-file using the correct attachment, or try to dismiss the motion. Thirteen
months later, the law firm informed Young
that the claims had been dismissed, and that the firm was withdrawing from
representing her further with the case.
Young argued that the firm
had a conflict of interest when it continued to represent other employees of Young’s employer, and when their
settlement included a rule barring the firm from suing the employer in the
future. Young believed that the firm had waited
to pursue her case until its other case was settled. The jury determined that Becker & Poliakoff knew that the
case had been dismissed, but withheld that information from Young so they could settle the other
case and secure the $2.9 million fee and cost reimbursement in that case. The
jury returned a verdict for Young
of $394,000 in compensatory damages as a result of Becker
& Poliakoff’s breach of fiduciary duty. The total compensatory damages
consisted of $144,000 in past lost wages and $250,000 in damages for “pain and
suffering, mental anguish, or loss of dignity.” However, the court reduced the
punitive damages to $2 million, claiming that no evidence was presented to show
that the firm could afford the award without facing bankruptcy. Both parties
appealed.
Justice Taylor
We
grant appellee’s motion for rehearing, withdraw our previous opinion, and
substitute the following in its place. No further motions for rehearing or
clarification will be entertained. . . .
“Under
Florida law, a trial court’s determination of whether a damage award is
excessive, requiring a remittitur or a new trial, is reviewed by an appellate
court under an abuse of discretion standard.” In ruling on a motion for
remittitur, the trial court must evaluate the verdict in light of the evidence
presented at trial. . . .
In
evaluating a punitive damages award, the trial court must also determine
whether the award comports with constitutional due process requirements. “The
three criteria a punitive damages award must satisfy under Florida law to pass
constitutional muster are: (1) ‘the manifest weight of the evidence does
not render the amount of punitive damages assessed out of all reasonable
proportion to the malice, outrage, or wantonness of the tortious conduct;’ (2)
the award ‘bears some relationship to the defendant’s ability to pay and does
not result in economic castigation or bankruptcy to the defendant;’ and (3) a
reasonable relationship exists between the compensatory and punitive amounts
awarded.”
In
this case, the trial court found that the $4.5 million punitive damages award
overcame the presumption of excessiveness under Section 768.73, Florida
Statutes. The court, however, concluded that the award did not satisfy the
criteria for constitutionality. Although the court found that the first and
third criteria mentioned above were met because the award was proportional to
reprehensible conduct of the defendant and bore a reasonable relationship
between the compensatory and punitive amount awarded, it found that the award
fell short on the second criteria; it was excessive because it was “too much
for Defendant to bear without economic castigation or bankruptcy.” As explained
in the trial court’s thorough and detailed order, this finding is supported by the
record.
After noting that the jury apparently
discredited evidence presented by the defense regarding Becker & Poliakoff’s financial picture, the
trial court turned to testimony of Young’s
financial expert, Dr. Pettingil, in determining that the $4.5 million punitive
damages award would bankrupt Becker
& Poliakoff. In short, the trial court found that Dr. Pettingil’s opinion
placed the law firm’s net worth at $9.7 million to $11.1 million, and that “a
$4.5 million punitive damages award constitutes forty percent of the net worth
of the company.” This amount, the court reasoned, was “too large” and exceeded
“the highest amount that can be sustained based upon the evidence.” Explaining
how it arrived at the $2 million remittitur amount, the court stated the following:
The
court finds that the maximum award that will not be excessive is $2 million
which constitutes about 18%–20% of the firm’s net worth. Dr. Pettingil’s
testimony establishes sufficient assets to bear this amount. His testimony
established annual earnings of $675,000.00 per year increasing by 3% in 2010
and every year thereafter, $3 million per year in extraordinary compensation
and a total of $1.5 million in retained earnings. Over 2009 and 2010 this would
amount to assets exposable to collection of a punitive damage award of $6
million to $9 million, depending upon the extent of payment to officers’
extraordinary compensation.
$2
million is as close to disgorging what the jury determined to be ill-gotten
gains as Defendant’s financial wealth will tolerate.
Contrary to Young’s
contention, the trial court did not improperly substitute its judgment for that
of the jury, but instead properly exercised its discretion in reviewing the
award upon the financial information in evidence. While a punitive damages
award should be painful enough to provide some retribution and deterrence, it
should not financially destroy a defendant. We, therefore, do not disturb the
amount of the punitive damages ordered by remittitur; reasonable people could
differ over this matter, and, therefore, no clear abuse of discretion is shown.
We further find any error in the trial
court’s ruling that prohibited Dr. Pettingil from testifying that an award of
$10 million would not bankrupt Becker
& Poliakoff to be harmless. Here, the witness was allowed to state his
opinion concerning valuation of the firm’s net worth and its financial ability
to pay an award. And, even without hearing the witness’s opinion as to whether
an award of $10 million would bankrupt the firm, the jury still awarded $4.5
million in punitive damages—an amount the trial court found to be excessive in
relation to the firm’s net worth.
We reject Becker
& Poliakoff’s argument that the punitive damages award should have been set
aside or remitted further. In connection with this argument, Becker & Poliakoff argues that the
only “loss” cognizable in this case would have been loss of wages and that
mental anguish damages were precluded by the impact rule. Assuming, without
deciding, that the damages for mental anguish were not properly awardable as
compensatory damages in this case, it is clear that the jury awarded at least
some compensatory damages for breach of fiduciary duty. Thus, we need not
consider whether punitive damages could have been awarded in this case in the
absence of actual damages.*
*Young v. Becker & Poliakoff 88 So.3d 1002
(2012).
1.
Read and understand the case or question assigned. Show your
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to incorporate the concepts of the chapter we are studying to show your
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Parties [Identify the plaintiff and the defendant]
Facts [Summarize only those facts critical to the outcome of the
case]
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Do significant research outside of the book and demonstrate that
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