May 19, 2008

Decision reversed because trial court awarded punitive damages based on environmental tort theory, which was rejected by the jury


This appeal involves a jury's award of punitive damages. The construction company entered into a contract with the State of Tennessee to widen a portion of a highway. The homeowners entered into a contract with the construction company allowing the construction company to place excess materials generated from the highway project on the homeowners' property. In exchange, the homeowners would receive compensation based on the cubic fill area, and the company would fill and grade that portion of the homeowners' property. The project required that the construction company conduct extensive blasting near the homeowners' house and vehicles. One of the homeowners became concerned when he witnessed the construction company placing various garbage items and tires on his property near the fill area. After three years, the construction company finished the project.

The homeowners brought suit, alleging that the company failed to pay the amount due under the contract and caused damage to their house due to the blasting. The complaint also alleged that the company buried certain items, including tires, on the property which constituted an environmental tort. The homeowners' amended complaint stated a cause of action in nuisance and also sought an award of punitive damages in the amount of $1 million dollars.

The jury returned a verdict in favor of the homeowners for the nuisance claim in the amount of $3,305.00 and found that punitive damages should be imposed on the construction company. The jury found in favor of the construction company for the environmental tort claim. After the second phase of the trial, the jury returned an award of $2 million in punitive damages. The trial court remitted the award to $1 million, the amount of the homeowners' ad damnum. The construction company appeals, and we reverse and remand in part and affirm in part.

Opinion may be found at the TBA website:

"Our Supreme Court, in Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901–02 (Tenn. 1992), laid out the procedural framework for awarding punitive damages. First, the plaintiff must prove by clear and convincing evidence that the defendant acted (1) intentionally, (2) fraudulently, (3) maliciously, or (4) recklessly. Id. at 900–01. Upon such a finding, the jury must then determine the amount of damages during the second phase of the trial[.]" Id.

Trial court: "By intentionally burying tires eight feet tall, thirty-two inches in diameter, and weighing over one ton, the defendant clearly violated the solid waste disposal act. The policy of the state to avoid pollution and the creation of unpermitted landfills was intentionally violated on the lands of another and justifies a substantial punitive damages award." Id. (quoting the trial court).

"The trial court’s findings of fact and conclusions of law are insufficient in that they rely heavily on the environmental tort claim, a theory which the jury rejected. We therefore reverse the award of punitive damages and remand the case to the trial court. On remand, the trial court should apply the Hodges factors and make appropriate findings of fact and conclusions of law in approving or decreasing the award of punitive damages, if the court deems appropriate, based on the nuisance theory." Id.