Richard J. Bolen
Huddleston, Bolen, Beatty, Rachael S. Carrico
Porter & Copen Masters & Taylor
Huntington, West Virginia Charleston, West Virginia
Attorney for the Appellant Attorneys for the Appellee
The Opinion of the Court was delivered Per Curiam.
JUSTICE SCOTT dissents and reserves the right to file a dissenting opinion.
essential elements in an action for fraud are: (1) that the act claimed to be
fraudulent was the act of the defendant or induced by him; (2) that it was material
and false; that plaintiff relied on it and was justified under the circumstances
in relying upon it; and (3) that he was damaged because he relied on it.
Syllabus point 1, Lengyel v. Lint, 167 W. Va. 272, 280 S.E.2d 66
formulation of jury instructions is within the broad discretion of a circuit
court, and a circuit court's giving of an instruction is reviewed under an abuse
of discretion standard. A verdict should not be disturbed based on the formulation
of the language of the jury instructions so long as the instructions given as
a whole are accurate and fair to both parties. Syllabus point 6, Tennant
v. Marion Health Care Foundation, Inc., 194 W. Va. 97, 459 S.E.2d 374
litigant may not silently acquiesce to an alleged error, or actively contribute
to such error, and then raise that error as a reason for reversal on appeal.
Syllabus point 1, Maples v. West Virginia Department of Commerce, 197
W. Va. 318, 475 S.E.2d 410 (1996).
outer limit of the ratio of punitive damages to compensatory damages in cases
in which the defendant has acted with extreme negligence or wanton disregard but
with no actual intention to cause harm and in which compensatory damages are neither
negligible nor very large is roughly 5 to 1. However, when the defendant has acted
with actual evil intention, much higher ratios are not per se unconstitutional.
Syllabus point 15, TXO Production Corp. v. Alliance Resources Corp., 187
W. Va. 457, 419 S.E.2d 870 (1992).
judgment will not be reversed because of the admission of improper or irrelevant
evidence when it is clear that the verdict of the jury could not have been affected
thereby. Syllabus point 7, Torrence v. Kusminsky, 185 W. Va.
734, 408 S.E.2d 684 (1991).
Mountaineer Coal Development Company, d/b/a Marrowbone Development Company (hereinafter referred to as Marrowbone), appellant/defendant below, appeals from an adverse jury verdict entered in the Circuit Court of Mingo County. The jury awarded Radec, Inc. (hereinafter referred to as Radec), appellee/plaintiff below, $89,629.89 in compensatory damages. Additionally, the jury awarded to Radec $1,541,638.00 in punitive damages. Marrowbone asserts assignments of error related to the following topics: (1) the submission of a fraud theory to the jury; (2) the jury instructions on punitive damages; (3) the trial court's review of the punitive damage award; (4) the excessiveness of the punitive damages; and (5) the admission of certain evidence regarding finances and the mentioning of a non-union coal operation. Based upon the parties' arguments on appeal, the record designated for appellate review, and the pertinent authorities, we affirm the decision of the Circuit Court of Mingo County.
In May of 1995, Radec was
prepared to begin mining preparations for Radec No. 5. Due to the unexpected
delay in getting to Radec No. 5, a great deal of deterioration had occurred.
Approximately twenty-million gallons of water had flooded Radec No. 5, which
caused 1,800 feet of the mine's ceiling to fall. The additional cost for rehabilitating
Radec No. 5 was not part of the original written contract between Radec and
Marrowbone. However, because of Marrowbone's request for additional work on
Radec No. 4, and the resulting delay of the start up on of Radec No. 5, Marrowbone
orally agreed to reimburse Radec for the cost of rehabilitating Radec No. 5.
Eventually, Marrowbone rejected
paying to Radec the amounts requested by Radec for rehabilitating Radec No.
5. Radec then concluded that, as a result of Marrowbone's refusal to pay all
of the rehabilitation costs for Radec No. 5, it would no longer be profitable
for Radec to remove coal from Radec No. 5. Under the terms of the original written
contract between Radec and Marrowbone, Radec could terminate its obligation
to work Radec No. 5 by providing 30 days notice to Marrowbone. Radec gave no such notice to Marrowbone. Instead, Radec continued to work Radec No. 5
after Marrowbone orally agreed to permit Radec to additionally mine a profitable
site known as the Drautz property.
Radec was finishing its work
on Radec No. 5 in September of 1996 when Marrowbone advised Radec that Radec
would not be allowed to mine the Drautz property. Radec subsequently
filed this civil lawsuit in July, 1997. The suit alleged causes of action for
breach of an oral contract and fraud.See
footnote 1 1
The case was tried before
a jury. On June 2, 1999, the jury returned a verdict against Marrowbone in the
amount of $89,629.89 as compensatory damages, and $1,541,648.00 as punitive
damages. Following the trial court's denial of Marrowbone's post-trial motions,
Marrowbone filed this appeal.
We have further held that
'[w]hen the plaintiff's evidence, considered in the light most favorable
to him, fails to establish a prima facie right of recovery, the trial court
should direct a verdict in favor of the defendant.' Syl. pt. 3, Roberts v.
Gale, 149 W. Va. 166, 139 S.E.2d 272 (1964). Syl. pt 1, Brannon v. Riffle, 197
W. Va. 97, 475 S.E.2d 97 (1996). However, it is equally well established
that a claim should go to the jury unless manifest insufficiencies in the evidence
compel otherwise. Accordingly, it has long been the rule in this jurisdiction
that '[b]efore directing a verdict in a defendant's favor, every reasonable
and legitimate inference favorable to the plaintiff fairly arising from the
evidence, considered as a whole, should be entertained by the trial court, and
those facts should be assumed as true which the jury may properly find under
the evidence.' Syl. pt. 1, Fielder v. Service Cab Co., 122 W. Va.
522, 11 S.E.2d 115 (1950). Syl. pt. 9, Casto v. Martin, 159 W. Va.
761, 230 S.E.2d 722 (1976). Accord Syl. pt. 1, Blake v. John Skidmore
Truck Stop, Inc., 201 W. Va. 126, 493 S.E.2d 887 (1997). In our review
of the record, we are left with little doubt that sufficient evidence was adduced
by Radec to warrant the fraud claim being submitted to the jury.See
footnote 3 3
To begin, a Radec official, Richard Goff, testified that a Marrowbone official, Howard Epperly, promised to let Radec mine the Drautz property if Radec continued to rehabilitate and mine Radec No. 5. Goff further testified that another Marrowbone official, John Faulconer, took Radec officials to see the Drautz property.
Mr. Goff clearly testified that Radec would not have continued to rehabilitate
and mine Radec No. 5 had Marrowbone not promised to permit Radec to mine the
The Evidence presented by
Radec suggested that it was reasonable for Radec to rely on such a promise,
because Radec had done business with Marrowbone for almost twenty years. Moreover,
Marrowbone made additional representations to Radec regarding Marrowbone's preparation
of the necessary paperwork to secure governmental approval for mining the Drautz
In contrast, John Faulconer
testified that Marrowbone had never actually considered letting Radec mine the
Drautz property.See footnote 4 4
Other evidence suggested that Marrowbone had been considering mining the
Drautz property itself. There was also evidence indicating that a mining application
for the Drautz property was initially filed under the name of Marrowbone, but
was later transferred to that of the Heritage Corporation. The mining application
for the Drautz property was never listed in the name of Radec.
To support their damage claim,
Radec produced testimony from Mr. Goff, Ms. Kay Parsley, bookkeeper, and Mr.
Drew Baldock, accountant. Those witnesses testified that Radec was financially ruined as a result of its reliance on
Marrowbone's promise to allow Radec to mine the Drautz property. There was evidence
that Radec incurred debts totaling $1.1 million dollars in rehabilitation costs
relating to Radec No. 5. Additionally, Radec lost all of its mining equipment
due to its inability to make loan payments on the equipment.
It is clear from the above
evidence that it was proper to allow Radec's fraud theory to go to the jury.
There were various legitimate inquiries proper for jury resolution regarding
[Radec's theory of fraud.] Brannon v. Riffle, 197 W. Va.
97, 101, 475 S.E.2d 97, 101 (1996). This Court has held that [u]pon a
motion to direct a verdict for the defendant, every reasonable and legitimate
inference fairly arising from the testimony, when considered in its entirety,
must be indulged in favorably to plaintiff; and the court must assume as true
those facts which the jury may properly find under the evidence.' Syl., Nichols
v. Raleigh-Wyoming Coal Co., 112 W. Va. 85, 163 S.E. 767 (1932). Syl.
pt.1, Totten v. Adongay, 175 W. Va. 634, 337 S.E.2d 2 (1985).
of jury instructions is within the broad discretion of a circuit court, and a
circuit court's giving of an instruction is reviewed under an abuse of discretion
standard. A verdict should not be disturbed based on the formulation of the language
of the jury instructions so long as the instructions given as a whole are accurate
and fair to both parties.
Syl. pt. 6, Tennant v. Marion Health Care Found., Inc., 194 W. Va. 97, 459 S.E.2d 374 (1995).
With respect to instructing
the jury on punitive damages, we held in syllabus point 3 of Garnes v. Fleming
Landfill, Inc., 186 W. Va. 656, 413 S.E.2d 897 (1991):
When the trial court instructs the jury on punitive damages, the court should, at a minimum, carefully explain the factors to be considered in awarding punitive damages. These factors are as follows:
(1) Punitive damages should bear a reasonable relationship to the harm that is likely to occur from the defendant's conduct as well as to the harm that actually has occurred. If the defendant's actions caused or would likely cause in a similar situation only slight harm, the damages should be relatively small. If the harm is grievous, the damages should be greater.
(2) The jury may consider (although the court need not specifically instruct on each element if doing so would be unfairly prejudicial to the defendant), the reprehensibility of the defendant's conduct. The jury should take into account how long the defendant continued in his actions, whether he was aware his actions were causing or were likely to cause harm, whether he attempted to conceal or cover up his actions or the harm caused by them, whether/how often the defendant engaged in similar conduct in the past, and whether the defendant made reasonable efforts to make amends by offering a fair and prompt settlement for the actual harm caused once his liability became clear to him.
(3) If the defendant profited from his wrongful conduct, the punitive damages should remove the profit and should be in excess of the profit, so that the award discourages future bad acts by the defendant.
(4) As a matter of fundamental fairness, punitive damages should bear a reasonable relationship to compensatory damages.
(5) The financial position of the defendant is relevant.
The record is clear. The trial court did not specifically cite the Garnes factors when instructing the jury on punitive damages. Radec contends that this Court should not consider the issue for two reasons. First, Radec argues that Marrowbone did not raise an objection to the trial court regarding the absence of the Garnes factors in the jury instructions. Radec points out that Rule 51 of the West Virginia Rules of Civil Procedure provides that [n]o party may assign as error the giving or the refusal to give an instruction unless the party objects thereto before the arguments to the jury are begun, stating distinctly, as to any given instruction, the matter to which the party objects and the grounds of the party's objection[.] Accord Syl. pt 5, Page v. Columbia Natural Resources, Inc., 198 W. Va. 378, 480 S.E.2d 817 (1996); Syl. pt. 1, Shia v. Chvasta, 180 W. Va. 510, 377 S.E.2d 644 (1988).
Second, Radec points out that
it tendered to the trial court an instruction containing the Garnes factors.
However, Marrowbone objected to the giving of any punitive damages instruction.See
footnote 5 5 Radec argues that Marrowbone should now not be
allowed to raise the issue as error, because Marrowbone invited the error by
objecting to such an instruction being given. Our cases are clear in holding
that [a] litigant may not silently acquiesce to an alleged error, or actively
contribute to such error, and then raise that error as a reason for reversal
on appeal. Syl. pt. 1, Maples v. West Virginia Dep't of Commerce,
197 W. Va. 318, 475 S.E.2d 410 (1996). A judgment will not be reversed
for any error in the record introduced by or invited by the party seeking reversal.
Syl. pt. 4, State v. Johnson, 197 W. Va. 575, 476 S.E.2d 522 (1996).
For the reasons provided by
Radec and our decisions on invited error, the Garnes jury instruction issue will not be addressed by this Court.See
footnote 6 6 Moreover, it has been noted that a defendant 'cannot
. . . be allowed to alter retroactively [his] trial strategy.' McDougal
v. McCammon, 193 W. Va. 229, 239, 455 S.E.2d 788, 798 (1995) (quoting
DeBenedetto v. Goodyear Tire & Rubber Co., 754 F.2d 512, 518 (4th
appropriateness of punitive damages to encourage fair and reasonable settlements
when a clear wrong has been committed. A factor that may justify punitive damages
is the cost of litigation to the plaintiff.
Because not all relevant information is available to the jury, it is likely that in some cases the jury will make an award that is reasonable on the facts as the jury know them, but that will require downward adjustment by the trial court through remittitur because of factors that would be prejudicial to the defendant if admitted at trial, such as criminal sanctions imposed or similar lawsuits pending elsewhere against the defendant. However, at the option of the defendant, or in the sound discretion of the trial court, any of the above factors may also be presented to the jury.
We have reviewed the trial court's order. We disagree with Marrowbone's contention that the order fails to demonstrate a meaningful review. We find the order shows the trial court gave full consideration to the amount of the punitive damage award and the evidence adduced at trial.
We have considered the issues
raised by the parties as it relates to trial evidence and the punitive damage
award in this case. We agree with Radec that the evidence of Marrowbone's fraudulent
conduct warranted the amount of punitive damages awarded in this case. It is clear from the evidence that Marrowbone knew Radec
could not survive financially if it rehabilitated and mined Radec No. 5. Additionally,
Marrowbone plainly knew it would benefit from Radec's work on Radec No. 5. In
order to reap this benefit, Marrowbone deceived Radec into believing that it
would be given the profitable Drautz property to mine after completing work
on Radec No. 5. Marrowbone never intended to turn over the Drautz property to
Radec. Marrowbone's actions were evil and self-serving.
To begin, Marrowbone argues that the trial court committed error in admitting evidence illustrating Marrowbone's financial situation. Marrowbone concedes that under Garnes v. Fleming Landfill, Inc., supra, evidence of its financial position is relevant. However, Marrowbone contends that Radec's evidence, showing gross revenues over a six-year period, did not reflect Marrowbone's true financial position.
Radec notes initially that
Marrowbone did not object to the evidence on the grounds of accuracy during
the trial. Marrowbone sought to keep the evidence out on the ground that it
was not relevant. Next, Radec points out that Marrowbone refused to provide
more accurate financial information during discovery. Further, the information
submitted to the jury actually came from information Marrowbone supplied to
Insofar as Marrowbone supplied
Radec with the financial information introduced at trial, but failed to challenge
that information at trial with more accurate data that it possessed, we find
no merit to this issue. Marrowbone cannot withhold requested information and
then complain about the accuracy of information it supplied. It is fundamental
that a defendant must live by his trial decisions. State v. Knuckles,
196 W. Va. 416, 421, 473 S.E.2d 131, 136 (1996). See also McDougal v.
McCammon, 193 W. Va. 229, 238, 455 S.E.2d 788, 797 (1995) (As
a general rule, wrongfully secreting relevant discovery materials makes it inequitable
for the withholder to [ob]tain the benefit of a favorable verdict.).
Marrowbone also assigned error
to the admission of evidence regarding the mentioning of a non-union company.
Radec contends, and we agree, that this evidence was relevant as corroborative
and impeachment evidence.
Radec presented evidence indicating
the circumstances surrounding Marrowbone's promise to let Radec mine the Drautz
property. Marrowbone's Howard Epperly denied ever promising to let Radec mine
the Drautz property. However, evidence presented by Radec revealed that Epperly
had stated, before Radec was promised it would mine the Drautz property, that
the Drautz property was going to be conveyed to a non- union company. This evidence
served to both impeach Epperly and corroborate Radec's rendition of what was
promised and said by Marrowbone.See footnote
9 9 Our prior cases have permitted the attacking party
to admit evidence that, if credited by the jury, would raise doubts about a
prior witness's testimony. McDougal v. McCammon, 193 W. Va.
229, 236, 455 S.E.2d 788, 795.
Upon petition, this Court will review all punitive damages awards. In our review of the petition, we will consider the same factors that we require the jury and trial judge to consider, and all petitions must address each and every factor set forth in Syllabus Points 3 and 4 of this case with particularity, summarizing the evidence presented to the jury on the subject or to the trial court at the post-judgment review stage. Assignments of error related to a factor not specifically addressed in the petition will be deemed waived as a matter of state law.