714 S.E.2d 904
S.C. Ct. App.2011Background
- Hollis and Robinson families own ~19 acres; drive crosses a dam between ponds built decades earlier.
- Stonington purchased upstream property in 1999 to develop a subdivision and allegedly ignored erosion, stormwater, and sediment-control plans.
- Evidence shows Stonington failed to follow its own stormwater plans, causing silt/sediment buildup and flooding of the ponds.
- Dam collapse and sediment up to four feet caused property damage, loss of use, and costs to restore over $250,000 (plus pre-trial expenses).
- Jury awarded $400,000 actual damages and $3.5 million punitive damages; trial court offset actual damages by settlements to $315,000.
- On appeal, court affirms punitive damages liability and the verdict but reduces punitive damages to $2,000,000 as unconstitutional at $3.5 million.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in denying a directed verdict on punitive damages | Hollis/Robinsons contended substantial evidence showed reckless disregard | Stonington argued insufficient evidence for punitive damages | No reversible error; directed verdict denial affirmed |
| Whether the punitive damages jury charge improperly required damages for both defendants | Plaintiffs claim charge misled jury about punitive damages | Stonington argues charge was correct when viewed as a whole | No reversible error; charge considered in context is adequate |
| Whether the punitive damages award violates due process and should be reduced | Punitive award justified by deterrence and severity of misconduct | Award excessive and punitive damages ratio violates due process | Award reduced from $3.5 million to $2 million; due process satisfied at upper limit of $2M |
Key Cases Cited
- Austin v. Stokes-Craven Holding Corp., 387 S.C. 22 (S.C. 2010) (guides de novo review of constitutionality of punitive damages; deterrence considerations)
- Mitchell v. Fortis Ins. Co., 385 S.C. 570 (S.C. 2009) (set framework for three guideposts and de novo constitutional review)
- Gore v. BMW of N. Am., 517 U.S. 559 (U.S. 1996) (due process limits on punitive damages; ratio considerations)
- Campbell v. Gamble, 538 U.S. 408 (U.S. 2003) (deterrence and conduct relevance; limits on out-of-state harm evidence)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003) (reprehensibility and ratio considerations in punitive awards)
- Mishoe v. QHG of Lake City, Inc., 366 S.C. 195 (Ct.App. 2005) (standard for submitting punitive damages to jury when inferences support it)