Virginia Supreme Court Decides Punitive Damages Case

In the recent case of Cain v. Lee, the Virginia Supreme Court determined that the Circuit Court for the County of Stafford erred when it granted a jury instruction that provided that "punitive damages are generally not favored and should be awarded only in cases involving egregious conduct."  The instruction that was offered by the defendant and subsequently modified by the Court after argument by the parties was based upon a violation of Virginia Code §8.01–44.5.  The Court found that the instruction included "unnecessary commentary" on punitive damages and that it "improperly required the jury to consider an element or legal standard" that the plaintiffs were not required to prove as part of their case.

The facts of the case are fairly straightforward.  There were three plaintiffs in this case, Julia Cain, Raven Cain, and Rihanna Cain.  They were occupying a vehicle that was slowing due to traffic in front of them on May 31, 2008.  At that time, they were rear-ended by a vehicle driven by Joe Lee.  The impact was strong enough to push the Cain vehicle into the vehicle in front of them.

A state trooper who investigated the accident thought that Mr. Lee was possibly intoxicated as a result of his appearance and the "presence of a strong odor of alcohol."  Mr. Lee was administered a field sobriety test, which he failed.  He was subsequently submitted for a preliminary breath test which registered a blood-alcohol content of .24.  Lee was arrested and charged with DUI among other offenses.  Lee was subsequently brought before a magistrate and he refused to submit to a breath test.  Subsequently, he was charged with unreasonably refusing to submit to a breath test in violation of Virginia Code §18.2 – 268.3.  He was also charged with driving under the influence in violation of Code §18.2 – 266.  Mr. Lee pled guilty to the DUI charge and the unreasonable refusal charge was non prossed by the Commonwealth as part of a plea deal.

Each of the Cains filed personal injury actions against Lee seeking $25,000 in compensatory damages and $350,000 in punitive damages.  The three actions were consolidated into a single action for purposes of trial and discovery.  At trial, Lee conceded liability and the cases were tried to determine compensatory and punitive damages.  The jury awarded a total of $12,000 in compensatory damages and $1,500 in punitive damages.  The Cains all appealed the jury's verdict.

On appeal the Cains argued that the trial court erred by giving Instruction 10 which included language that noted "punitive damages are generally not favored and should be awarded only in cases involving egregious conduct."  The Cains argued that the instruction as worded did not properly state the law, incorporate the appellate standard of review, and was prejudicial in the way that it was worded.  The Virginia Supreme Court agreed with their position and noted that the code section upon which the instruction was based did not include the necessity that the jury find that the conduct was "egregious."  The Virginia Supreme Court states that under Code §8.01–44.5, a finder of fact may award punitive damages if the evidence demonstrates:

1.  the defendant was intoxicated at the time of the accident;
2.  the defendant knew or should have known "his ability to operate a motor vehicle was impaired"; and
3.  "the defendant's intoxication was a proximate cause of the injury to the plaintiff or death of the plaintiff's decedent."

The Court noted that Instruction 10 in this instance was taken from its holding in Expedious Management Company of Virginia, LLC v. Stefan, 269 VA 421, 425, 611 S. E.2d 385, 387 (2005).  The Court went on to state that the language used in this particular instruction of was a clear example of "argumentative language" taken from commentary by the Court about the favorability of punitive damages.

It is interesting to note that the general punitive damages instruction also does not contain a reference to egregious behavior or the fact that punitive damages are generally disfavored in Virginia.  Instruction 9.080 of the Virginia Model Jury Instructions provides as follows:

If you find that the plaintiff is entitled to be compensated for his damages, and if you further believe by the greater weight of the evidence that the defendant acted with actual malice toward the plaintiff or acted under circumstances amounting to a willful and wanton disregard of the plaintiff's rights, then you may also award punitive damages to the plaintiff to punish the defendant for his actions and to serve as an example to prevent others from acting in a similar way.

If you award punitive damages, you must state separately in your verdict the amount you allow as compensatory damages and the amount you allow as punitive damages.

In its Cain opinion, the Court discusses the fact that punitive damages awarded in the Expedious Management Company case were common law punitive damages while the damages awarded in the instant case were the result of a statute.  The Court notes that statutory punitive damages have been "explicitly approved by the General Assembly." Therefore, the court could not say that such punitive damages were "generally not favored" as a matter of law.

There are takeaways for both clients and lawyers to be found in this case.  The takeaways for our clients are that statutory punitive damages and common law punitive damages can be treated differently by the courts.  If the conduct is believed to fit under a statute, whether the conduct is considered to be "egregious" or not, punitive damages may be awarded based upon a jury's finding in a case.  Common law punitive damages does require that a defendant act with "actual malice" toward a plaintiff or that he acted under circumstances that amount to "a willful and wanton disregard" of a plaintiff's rights.  This is obviously a different standard and each case should be looked at under its specific facts to determine whether it falls under a statutory punitive damages claim or a common-law punitive damages claim.  The take away for lawyers should be to craft your jury instructions so that they comply with the statutory language.