I. Background
In late March of 2000, Marcin Borzym, who was 21 years old at the time, visited Darcars several times to consider purchasing a 1999 BMW 323i, which he had seen advertised in a newspaper for $27,500. The first of these visits took place on Sunday, March 26, when Borzym met with a salesperson, Juste Bahula, and test drove the BMW. Borzym returned to Darcars the following
Borzym returned to purchase the car during the evening of Friday, March 31. To complete the purchase, Borzym met with a finance manager of Darcars, Douglas Quander, who was responsible for negotiating the amount of the down-payment
On Monday morning, Darcars representatives began to question the accuracy of some of the information contained in the sales documents. That day, Robin Stein, a financial services manager from Darcars, and Quander contacted Borzym by phone to tell him that there was a problem with his automobile insurance information and that he needed to provide information of a different policy. Borzym responded to their requests by obtaining a new policy and informing Stein about that policy information on Tuesday morning. Later that afternoon, Stein called back several more times, however, complaining of further discrepancies in the paperwork and asking Borzym to return to Darcars as soon as he could so they could resolve the issue.
Quander also called Tuesday afternoon in hopes of persuading Borzym to meet with him as soon as possible to address the discrepancies in the paperwork. He was so eager to meet Borzym that he offered him a $500 car service credit if Borzym would come into the dealership. In addition, Quander told Borzym that he was willing to meet him on Tuesday at 10:00 p.m. at Borzym’s health club. No meeting took place on Tuesday, however.
Borzym had no further contact with Darcars until the morning of Thursday, April 6, when he walked to the garage where he had parked the BMW and was surprised to see a truck from a repossession company towing the car from the garage. Borzym asked the driver why the BMW was being repossessed, and the driver told him that there was a “problem” with the “dealership” and that he should go there to resolve it. Inside the BMW when it was repossessed were, according to Borzym, his laptop computer, which he valued at approximately $1500, and his collection of music CDs, which he valued at $300.
Borzym called Darcars immediately and spoke to Stein. When he asked why the BMW had been repossessed, she refused to give him a reason over the phone but told him to come to the dealer to discuss the matter. Borzym complied, making it to Darcars later that evening to meet with Stein and two other representatives of Darcars, a sales manager and the head of Darcars security. One of the Darcars representatives told Borzym that the car had been repossessed because Borzym “didn’t pay anything.” Borzym insisted that he
Followed by Darcars staff, Borzym walked outside, where he met his father. When Borzym’s father learned what had happened with the BMW and his son’s belongings, he became upset and confronted Darcars staff. One of the personnel who had met with Borzym began “waving goodbye and making fun” of the Borzyms. This prompted Borzym’s father to walk closer to the staff member, but a security officer stepped in the way. The staff member then began “cursing out” the Borzyms, accusing them of being “thieves.” Darcars did not return the $2,500 cash down-payment, nor did Borzym recover the laptop and CDs that had been taken during the repossession.
Alleging causes of action for breach of contract, conversion, fraud, illegal repossession and punitive damages, Borzym sued Darcars on May 8, 2000, in the Circuit Court for Montgomery County. The Circuit Court dismissed his claims of fraud, illegal repossession and punitive damages, and Borzym аmended his complaint to allege only breach of contract, conversion, punitive damages, and illegal repossession. Before trial, the court granted summary judgment to Darcars on the illegal repossession claim, and, during trial, Borzym abandoned his claim of breach of contract. Only Borzym’s claim that Darcars converted Borzym’s $2500 down-payment, laptop, and CDs went to the jury, which on April 3, 2001, returned a $4,300 verdict
3
in favor of Borzym and
The Court of Special Appeals affirmed the judgment of the Circuit Court.
Darcars Motors of Silver Spring, Inc. v. Borzym,
We granted Darcars’ petition for a writ of certiorari,
Darcars v. Borzym,
1. Whether the Court of Special Appeals erred in holding that the evidence presented to support a conversion claim by a preponderance of the evidence was legally sufficient to support the finding of actual malice by clear and convincing evidence required for a punitive damages verdict?
2. Whether the Court of Special Appeals erred in holding that the substantive clear and convincing burden of proof applicable to punitive damages claims has no bearing on the Court’s legal determination of the sufficiency of the evidence to support those claims?
3. Whether a defendant’s ability to pay an award of punitive damages is an essential element of a plaintiffs claim for punitive damages in which the plaintiff bears the burden of proof and the plaintiff failed to meet that burden in this case?
We hold that the evidence presented at trial was sufficient to sustain a finding of actual malice. We further hold that, in determining the legal sufficiency of evidence supporting actual malice, a trial court must consider the “clear and convincing” standard of proof. Moreover, Borzym had no obligation to present evidence of Darcars’ financial condition; therefore, the award of punitive damages stands.
II. Discussion
A. The Evidеnce is Sufficient to Support a Finding of Actual Malice
Darears contends that the Court of Special Appeals erred in holding that the evidence presented in this case was sufficient to support a finding of actual malice by clear and convincing evidence. In Darears’ view, the evidence minimally supports a claim of conversion. Darears asserts that there was absolutely no evidence that any of its actions were based on any evil motive, intent to injure, or fraud, and that, without more, the jury had to “speculate” or “guess” to reach the conclusion that the conversion had been motivated by actual malice. Darears further takes issue with the Court of Special Appeals’ reliance on Darears’ failure to raise defenses of “claim of right” or “honest belief’ that it was entitled to the $2,500 down-payment, as it posits that such defenses are not necessary to avоid the imposition of punitive damages in a conversion claim.
In response to Darears’ arguments, Borzym argues that clear and convincing evidence of actual malice supports his claim for punitive damages. The tort of conversion, according to Borzym, has been committed with actual malice if the evidence shows that the defendant consummated the conversion willfully and -with knowledge of the wrong. In Borzym’s opinion, Darears demonstrated knowledge of the wrongfulness of the conversion when its representative refused to return Borzym’s belongings and stated, “[f]orget about it. Get out of here. Call your attorney. Get lost.”
Conversion is an intentional tort, consisting of two elements, a physical act combined with a certain state of mind. The physical act can be summarized as “any distinct act of ownership or dominion exerted by one person over the personal property of another in denial of his right or inconsistent with it.”
Allied Investment Corp. v. Jasen,
Conversion, in the sense of the law of trover, consists either in the appropriation of the property of another, or in its destruction, or in exercising dominion over it in defiance of the owner’s rights, or in withholding the possession from him under an adverse claim of title, and all who aid, command, assist, or participate in the commission of such unlawful acts are hable.
Later, in
Wallace v. Lechman & Johnson, Inc.,
[T]he gist of a conversion is not the acquisition of the property by the wrongdoer, but the wrongful deprivation of a person of property to the possession of which he is entitled. Nor need there exist a forcible dispossession of property to constitute an act of the defendant a conversion. A conversion may consist of a wrongful, tortious or unlawful taking of property from the possession of another by theft, trespass, duress, or fraud and without his consent or approbation, either express or implied.
Id.
at 633,
Besides the physical act of exerting unlawful control, there is an intent element to the tort of conversion, and a wide range of different states of mind qualify. At a minimum, a defendant liable of conversion must have “an intent to exercise a dominion or control over the goods which is in fact inconsistent with the plaintiffs rights.”
Keys v. Chrysler Credit Corp.,
We have said that, when conversion occurs in these circumstances, punitive damages are not appropriate.
K & K Management v. Lee,
Conversion, of course, also may occur when the defendant’s intent reaches the level of “actual malice.”
See Middle States Holding Co., Inc. v. Thomas,
In recent years, the law of punitive damages has undergone significant development.
See, e.g., Montgomery Ward,
Our opinions in recent punitive damage cases have examined the intent element of various torts, other than conversion, and defined the type of wrongful motive that may qualify as “actual malice.” In
Zenobia,
this Court explained what is meant by “actual malice” in the context
of
products liability, emphasizing that “negligence alone, no matter how gross, wanton, or outrageous, will not satisfy [the] standard [of actual malice].”
In
Ellerin,
the Court considered the availability of punitive damages where the defendant had committed fraud.
In
Montgomery Ward,
a case involving the tort of malicious prosecution, we reaffirmed the notion that only evidence of “actual malice” supports an award of punitive damages.
Like in the context of products liability, fraud, and malicious prosecution, the availability of punitive damages for the tort of conversion depends on the intent of the tortfeasor. While a plaintiff may obtain a compensatory damage award by proving merely that the defendant, without bad faith, intended to exert unlawful dominion over the plaintiffs property, punitive damages may be awarded only if the defendant demon
strated “actual malice” in carrying out the conversion. The term “actual malice” in the context of conversion requires little explanation beyond the definition we have established in our previous cases: consciousness of the wrongdoing or “conduct of the defendant characterized by evil motive, intent to injure, ill will, or fraud.”
Zenobia,
The evidence presented in this case is sufficient to demonstrate that Darears had an improper motive in converting Borzym’s $2,500 cash down-payment, laptop, and music CDs. When Borzym met with Darears employees to discuss the repossession of the BMW and to inquire about his down-payment, laptop, and CDs, a Darears representative told him to “Forget about it. Get out of here____[C]all your attorney” and “get lost.” Darears did not make the BMW available to Borzym to retrieve his belongings, and even after Borzym had left the dealership office, Darears representatives continued their inappropriate behavior. Outside the office, when Borzym’s father learned of his son’s troubles and approached Darears officials, they began sarcastically waving goodbye to the Borzyms, and one Darears employee “cursed out” the father and son and accused thеm of being thieves.
Evidence of this conduct provides a sufficient basis for the jury’s conclusion that Darears representatives acted with actual malice in the unlawful retention of Borzym’s property. The evidence of Darears employees pretentiously dismissing Borzym’s inquiries about his property, cursing, and then commenting, “get lost” and “call your attorney,” suggests malice. That evidence, combined with evidence of the heated exchange between Darears personnel and Borzym, certainly could lead to the conclusion that the conversion of the property was, in effect, a retaliation for Borzym’s failure to resolve the dispute on Darears’ terms. Accordingly, the evidence was sufficient to support the jury’s finding of actual malice.
B. Actual Malice Must Be Supported by Clear and Convincing Evidence
This Court’s holding in
Zenobia
left no question as to what level of proof is required for a plaintiff to establish “аctual malice” in support of a claim for punitive damages. A party seeking punitive damages must prove actual malice by “clear and convincing evidence.”
Use of a clear and convincing standard of proof will help to insure that punitive damages are properly awarded. We hold that this heightened standard is appropriate in the assessment of punitivedamages because of their penal nature and potential for debilitating harm. Consequently, in any tort case a plaintiff must establish by clear and convincing evidence the basis for an award of punitive damages.
Id.
In the case now before us, after holding that the evidence in this case was legally sufficient to support a finding of actual malice, the Court of Special Appeals deviated from the central issues. It expressed the view that the “clear and convincing” standard of proof has no bearing on а court’s determination of the sufficiency of the evidence supporting actual malice. Stated somewhat differently, it held that a trial judge should not consider the heightened standard in deciding whether a plaintiff had met the burden of production on the issue of actual malice, which, if met, would allow the question of actual malice to reach the jury. In the intermediate appellate court’s view, “clear and convincing evidence” relates only to the burden of persuasion — the level of certainty at which the jury must be convinced that “actual malice” motivated the tort. Darears argues that this holding contradicts precedent from both this Court and the United States Supreme Court. We agree.
The Supreme Court case of
Anderson v. Liberty Lobby, Inc.,
The Court discussed the analogous scenario of a motion for acquittal in a criminal case, where “the beyond-a-reasonable-doubt standard applies and ... the trial judge asks whether a reasonable jury could find guilt beyond a reasonable doubt.”
Id.
at 252,
Thus, in ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden. This conclusion is mandated by the nature of the determination. The question here is whether a jury could reasonably find either that the plaintiff proved his case by the quality and quаntity of evidence required by the governing law or that he did not. Whether a jury could reasonably find for either party, however, cannot be defined except by the criteria governing what evidence would enable the jury to find for either the plaintiff or the defendant: It makes no sense to say that a jury could reasonably find for either party without some benchmark as to what standards govern its deliberations and within what boundaries its ultimate decision must fall, and these standards and boundaries are in fact provided by the applicable evidentiary standards.
Id.
at 254-55,
[A] court ruling on a motion for summary judgment must be guided by the New York Times “clear and convincing” evidentiary standard in determining whether a genuine issue of actual malice exists — that is, whether the evidence presented is such that a reasonable jury might find that actual malicе had been shown with convincing clarity.
Id.
at 257,
Our cases support a conclusion consistent with
Anderson.
Recently, in
White v. State,
[ajlthough a conviction may rest on circumstantial evidence alone, a conviction may not be sustained on proof amounting only to strong suspicion or mere probability.... [The evidence] must do more than raise the possibility or even the probability of guilt. It must afford the basis for an inference of guilt beyond a reasonable doubt.
Id.
at 162-63,
the circumstantial evidence upon which the State’s case rested was insufficient as a matter of law to support, beyond a reasonable doubt, that [White] exercised dominion or control over the cocaine____Although [the evidence] might form the basis for a strong suspicion as to [White’s] culpability, the evidence, and reasonable inferences drawn therefrom, does not reach the standard of guilt beyond a reasonable doubt.
Id.
at 167,
The test for sufficiency of the evidence in criminal cases, itself, demonstrates that the heightened standard of proof plays a part in the outcome of this legal determination. The test, as recited in
Wills v. State,
Because meeting the burden of production requires different quanta of evidence depending on the burden of persuasion, a judge must account for and consider the appropriate burden of persuasion in deciding whether to allow the jury to decide an issue. A judge must not let the jury decide a criminal defendant’s guilt if the evidence could not establish that the elements have been met beyond a reasonable doubt. A judge must grant a civil
When discussing punitive damages, this Court has taken the position that a determination of evidentiary sufficiency of actual malice requires consideration of the “clear and convincing” standard. In
ACandS, Inc. v. Godwin,
In a related asbestos case,
ACandS, Inc. v. Asner,
Owens-Corning Fiberglas Corp. v. Garrett,
These punitive-damage cases are consistent with this Court’s review of the evidentiary sufficiency in fraud cases, where liability must be proven by clear and convincing evidence.
See VF Corp. v. Wrexham Aviation Corp.,
Our conclusion that the “clear and convincing” standard influences the determination of the evidentiary sufficiency of “actual malice” should not be construed to minimize the role of the jury. As the Supreme Court stated in Anderson:
Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury funсtions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict. The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor. [We do not] suggest that the trial courts should act other than with caution in granting summary judgment or that the trial court may not deny summary judgment in a case where there is reason to believe that the better course would be to proceed to a full trial.
C. Plaintiff Has No Burden to Present Evidence of a Defendant’s Financial Condition
Darcars further argues that the jury and trial court could not make an informed determination as to the appropriate amount of punitive damages, because Borzym did not present sufficient evidence of Darcars’ financial condition or ability to pay. According to Darcars, Borzym had a burden to present clear and convincing evidence not only that Darcars was liable for punitive damages, but also that Darcars had the financial ability to pay the punitive damage award.
Borzym counters that the jury awarded punitive damages based on “competent evidence” of Darcars’ financial condition. In addition, Borzym maintains that the punitive damage award of $25,000 was not excessive and was reasonably calculated as a deterrent.
Courts currently allow, but do not comрel, a plaintiff to present evidence of a defendant’s financial condition. Where the plaintiff seeks punitive damages, the trial court, may elect, but is not required, to bifurcate the trial so that the jury determines compensatory claims separate from the claim of punitive damages.
Zenobia,
If therе were two separate damages trials in every case, much of the evidence at the trial solely on the issue of punitive damages would duplicate the evidence admitted at the compensatory damages trial. Many of the same witness would have to be recalled to repeat their testimony before the jury. In light of the fact that this duplication would burden both witnesses and jurors as well as waste judicial resources, we believe that mandatory bifurcation is undesirable.
Id.
Although this bifurcated procedure is not required, the general practice has been to withhold evidence of a defendant’s ability to pay punitive damages “until and unless the jury awards compensatory damages and decides to award punitive damages.”
Montgomery Ward v. Wilson,
When and if the jury awards compensatory damages, then the trial judge cаn instruct fully on punitive damages after the presentation of evidence of the defendant’s ability to pay. There is but one jury and one trial, although the presentation of financial evidence is delayed until the appro priate time. Thus, the trial truly is not divided into two parts, and witnesses need not be recalled.
Id.
at 551,
Our cases have never
required
clear and convincing evidence of a defendant’s financial condition to support an award of punitive damages. In
Bowden,
we made clear that evidence of a defendant’s financial condition is relevant in determining whether a jury’s award of punitive damages is excessive.
Bowden,
We were clear, however, that the factors are not criteria that must be established but, rather, guideposts to assist a court in reviewing an award. As to the nine principles or factors, we said “not all ... are pertinent in every case involving court review of punitive damage awards.”
Id.
at 41,
Sound reasoning supports our view that a plaintiff has no obligation to establish a defendant’s ability to рay punitive damages. Compelling a plaintiff seeking punitive damages to present evidence of a defendant’s financial condition could, on the
Moreover, placing a burden on plaintiff to introduce evidence of a defendant’s financial condition will enhance the risk that a jury will place undue emphasis on the defendant’s wealth. If that should occur, the jury may become more prone to use information of a wealthy defendant’s finances to justify an award of punitive damages disproportionately higher than the gravity of the defendant’s wrongdoing. As we stated in
Bowden,
“merely because a defendant may be able to pay a very large award of punitive damages, without jeopardizing the defendant’s financial position, does not justify an award which is disproportionate to the heinousness of the defendant’s conduct.”
Based on these reasons, we see no reason to alter the way in which evidence of a defendant’s ability to pay is presented. Consequently, a plaintiff does not bear a burden to present evidence of a defendant’s financial condition in support of its pursuit of punitive damages. Our approach comports with the significant number of other jurisdictions that have addressed the issue.
See, e.g., Smith v. Lightning Bolt Productions, Inc.,
The Circuit Court applied the correct procedures in this case. After the jury found Darcars liable for compensatory damages and that Borzym was entitled to punitive damages, the Circuit Court allowed Borzym to present evidence regarding the amount of punitive damages. During this phase of the trial, Borzym, for the first time, elicitеd testimony relating to Darcars’ financial condition and argued that it was able to pay $500,000 in punitive damages. Darcars offered no evidence during that part of the proceedings. The judge then instructed the jury according to Section 10:12 of the Maryland Civil Pattern Jury Instruction. The jury determined, specifically, that Darcars converted Borzym’s property with actual malice and, as a result, Borzym was entitled to punitive damages of $100,000, which the trial court later reduced to $25,000. Borzym had no obligation to establish that Darcars had the financial ability to pay the award. Consequently, we shall affirm the award of punitive damages.
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED; COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY PETITIONER.
Notes
. Darcars never cashed the check and, at some point, returned it to Borzym.
. The purchase order, signed by both Quander and Borzym, indicates that a cash deposit of $2,500 was submitted with the order and was credited to the purchase price of $26,000. The retail installment contract, however, shows that a $5,000 deposit had been received.
. To reach a compensatory damage verdict of $4300, the jury added $1800, the value of Borzym’s laptop and CDs, to the alleged cash down-payment of $2500. We question whether the $2500 cash payment should have been recovered in conversion, however. As a general rule, money, i.e., currency, is not subject to a claim of conversion unless the plaintiff seeks to recover specific segregated or identifiable funds.
Allied Investment Corp. & Allied Venture Partnership v. Jasen,
Consequently, Borzym should have maintained the action for breach of contract to recover the cash payment. His breach of contract claim, however, never reached' the jury because the trial judge, mid-trial, decided not to instruct the jury on breach of contract and narrowed the claims to one of conversion. Whether this occurred at Borzym’s request, by agreement of the parties, or by order of the judge, sua sponte, is not clear from the record.
What is clear, however, is that Darcars did not argue before the Circuit Court, the Court of Special Appeals, or this Court that cash could not be the subject of conversion. Moreover, neither Borzym nor Darcars have claimed in this proceeding that the conversion claim, itself, was faulty or that the award of compensatory damages should be set aside. We, therefore, have no occasion to disturb the jury's verdict on those grounds. See Maryland Rule 8 — 131(b) (limiting the scope of this Court's review, generally, to those issues raised in the petition for certiorari or cross-petition).
. Borzym also filed a cross appeal in which it claimed that the Circuit Court abused its discretion in reducing the jury's punitive damage award of $100,000 to $25,000. The Court of Special Appeals held that the Circuit Court used appropriate discretion in reducing the award, and Borzym did not challenge this ruling in any cross-petition for certiorari.