ORDER ON MOTION FOR NEW TRIAL
This case is presently before the Court on remand from the Eleventh Circuit Court of Appeals for consideration of Defendant Homeward Residential’s motion for new trial on the issue of punitive damages. Upon due consideration of the Eleventh Circuit’s mandate, the evidence, the parties’ arguments, and the relevant law, the Court finds that the jury’s punitive award in this case is neither unconstitutional, unconscionable, nor excessive in light of the evidence presented at trial.
PROCEDURAL HISTORY
Plaintiff Jane McGinnis (“McGinnis”) filed the present action for wrongful foreclosure, conversion, interference with property, and intentional infliction of emotional distress against Defendant Homeward Residential, Inc. (“Homeward”), the servicer of the mortgages on several properties for which Plaintiff was a landlord. At the end of a bifurcated trial, the jury found against Homeward on all claims and awarded McGinnis $3,506,000.00 in damages ($6,000.00 for her economic injury, $500,000.00 for her emotional distress, and $3,000,000.00 in punitive damages).
After the trial, Homeward renewed its motion for judgment as a matter of law under Rule 50 of the Federal Rule of Civil Procedure (“Renewed JMOL”), and also moved, in the alternative, for a new trial and/or remittitur of damages under Rule
The parties, thereafter, cross-appealed, and the Eleventh Circuit Court of Appeals affirmed this Court’s ruling in its entirety. That opinion was vacated a short time later (following a decision by one the judges to recuse herself), and the appeal was referred to a second panel.
Homeward’s motion for new trial on the issue of punitive damages is thus now again before the Court.
HOMEWARD’S MOTION
Homeward’s “Post-Appeal Motion to Reduce Punitive Damages Award, or Alternatively for New Trial or Remittitur”
I. Standard of Review under Rule 59
Rule 59 of the Federal Rules of Civil Procedure allows the district court to order a new trial on evidentiary grounds if the trial judge, in his discretion, determines that the jury’s verdict is against the “great weight” of the evidence presented at trial.
When considering a motion for new trial, however, the district judge may not substitute his own credibility choices and inferences for those made by the jury.
, With these standards in mind, the Court now turns to the arguments raised in Homeward’s Motion for New Trial: (1) that the jury’s punitive award is unconstitutionally excessive; (2) that the jury’s punitive award is grossly excessive under Georgia law; and (3) that the jury’s verdict on punitive damages is against the great weight of the evidence presented at trial.
I. The Jury’s Punitive Award is Not Unconstitutionally Excessive
The first issue before the Court is whether the jury’s punitive award is so excessive that it violates due process. A punitive damages award may run afoul of the Due Process Clause “when it can fairly be categorized as grossly excessive” in relation to “a [s]tate’s legitimate interests in punishing unlawful conduct and deterring its repetition.”
When deciding whether an amount of punitive damages offends due process, three factors must be considered: the degree of reprehensibility of the defendant’s conduct; “the disparity between the actual or potential harm suffered by the plaintiff and the punitive ... award”; and “the difference between the punitive damages awarded and civil penalties authorized or imposed in comparable cases.”
A. Reprehensibility
The degree of reprehensibility of a party’s conduct is the “dominant consideration” in determining whether a punitive award is excessive.
After considering the facts of this case in light of the relevant factors, the Court finds a high degree of reprehensibility in Homeward’s conduct. During the trial of this case, there was ample evidence presented to show that Homeward was aware of both McGinnis’s financial vulnerability and her good-faith attempts to notify Homeward of its error in calculating the amount owed.
B. Ratio Between Compensatory and ■ Punitive Damages
“The Court must next consider the disparity between the actual or potential harm suffered by the - plaintiff and the punitive damages award..”
In this case, the ratio of punitive to compensatory damages is 5.9-to-l.
In support of its motion, Homeward relies on frequently-cited caselaw suggesting that, if an award of compensatory damages
Thus, “particularly egregious conduct ... may justify bumping the acceptable ratio to a higher level.”
Furthermore, the actual injury caused to McGinnis in this case is not the only relevant consideration: The potential that existed for a greater harm is also relevant.
All of these justifications for a large award of punitive damages are present here. The potential for financial and economic harm—if Homeward’s conduct was repeated on a large scale—is tremendous. The indifference and obstinacy shown by Homeward’s agents in this case likewise suggest that a strong deterrence from repetition may be needed. Smaller actions by Homeward—such as the collection of unreasonable amounts, fees and expenses— may also be hard to detect, and the amounts collected, in just a single case, may often be too small to justify litigation. Homeward is, in addition, a wealthy corporation: “AHMSI [was] the 13th largest mortgage servicer in the country managing nearly $71 billion in loan servicing,”
The Court, therefore, does not find the jury’s punitive award to be disproportionately excessive.
C. Civil Penalties
The final factor to be considered in this analysis is the amount of any civil penalties authorized or imposed in comparable cases.
In this case, Homeward asks the Court to compare the civil penalties authorized under the Real Estate Settlement Procedures Act (“RESPA”)
Accordingly, and having now weighed all of the relevant factors identified above, the
II. The Punitive Damages Award is Not Unconscionable under State Law
Homeward next contends that the jury’s punitive award is grossly excessive under state law. The Court presumes, as does' McGinnis, that Homeward’s argument is made under Georgia’s common law criteria for determining whether a punitive ■ award is excessive.
Thus, in Georgia, a punitive award will generally be upheld absent evidence that there was a “prejudice or bias on the part of the jury.”
In this case, the Court finds no direct proof that the jury’s award was infected by other considerations, bias, or prejudice;
III. The Punitive Award is Not Excessive in Light of the Evidence Presented
The final question before the Court is whether the jury’s punitive damages verdict is against the great weight of the evidence presented at trial.
As the Court discussed at length in its prior order,
Still, not all arguments may ’ be raised for the first time in a motion for new trial. A district court need not grant a new trial under Rule 59 based on arguments or theories that were previously available, but not pressed.
Homeward’s present argument—that the amount of the jury’s award on punitive damages, is excessive in light of the great weight of the evidence presented at trial— poses an entirely different question, is subject to different burden of .proof, and was not one available to Homeward at trial. At trial, Homeward could not yet have known what the damages award would be. Homeward is thus not procedurally barred from raising the two evidentiary challenges now before the Court.
A. Willful and Wanton Misconduct
Homeward first contends that the jury’s punitive damages award must be vacated or remitted because, under .Georgia law, punitive damages may not be awarded absent a finding that the defendant’s actions were “willful, malicious, fraudulent, wan
After a review of the evidence, the Court strongly disagrees. The Court in fact finds (as it has before)
B. Specific Intent to Harm
Homeward next argues, in the alternative, that the jury’s award of uncapped punitive damages must be vacated or remitted because the jury’s finding of “specific intent to harm”—a prerequisite to an award in excess of Georgia’s $250,000.00 statutory cap—is against the clear weigh to the evidence.
This Court has already found that the evidence presented at trial sufficiently demonstrates that Homeward’s conduct was “extreme and outrageous,”
McGinnis is correct that this Court is not bound by its previous ruling on this issue.
The Eleventh Circuit Court of Appeals has also rejected attempts “to narrow [the] definition of specific intent” in a manner that requires proof that the defendant purposely sought to cause the harm suffered.
Yet, upon review of this Court’s prior findings under Rule 50, it is apparent that Homeward’s arguments
1. Evidence of Homeward’s Conduct and Awareness of its Error
McGinnis first contends that evidence demonstrating Homeward’s conduct, words, demeanor, and knowledge of its error is sufficient proof of its intent to harm.
This evidence was also, for the most part, un-rebutted by Homeward at trial. When questioned, Homeward could neither verify nor produce a copy of its escrow analysis to justify the payment increase.
Homeward’s own evidence (or lack thereof) thus did little or nothing to dispel the inference of an intent to harm. From the evidence presented, the jury could
⅛. Evidence of Homeward’s Use of the Suspense Account
McGinnis has also argued that the jury’s finding of intent is supported by Homeward’s collection of late fees and other expenses, as income, through use of a suspense account.
According to the evidence at trial, once McGinnis refuséd to pay any increase, Homeward began placing her monthly payment into a suspense account, rather than crediting those payments to her account, and then further deducted, as its own income, late fees and other expenses.
From this evidence,' a jury could reasonably infer that Homeward knew its use of the suspense account and collection of related fees would further pressure McGin-nis into paying the amounts greater than what she owed
8, Evidence of Intentional Infliction of Emotional Harm
Evidence regarding McGinnis , and her son’s many calls and letters from (and, to) Homeward may also support an inference of Homeward’s intent to harm. As noted by the Eleventh Circuit on appeal: .
The evidence indicated that over the course of Homeward’s relationship withMcGinnis, Homeward’s agents frequently harassed McGinnis by phone and mail. Because Homeward’s misconduct involved [multiple properties owned by McGinnis] ... this harassment [became] a constant fixture of their lives; in fact, if you stacked all the collection letters together, they would reach five feet high. 104
The jury heard this and other evidence suggesting that Homeward’s agents were aware of the emotional distress they were causing—if only due to the sheer volume of adversarial communications between them and looming threats of foreclosure they repeatedly offered. The jury was obviously swayed by this and similar evidence at trial, as indicated by its verdict in favor of McGinnis’s claim of intentional infliction of emotional distress (“IIED”) and sizable award of emotional damages.
The inferential leap required to go from the jury’s verdict on Plaintiffs IIED claim to a finding of specific intent to harm is not too great. The same evidence would have allowed the jury to infer that Homeward knew it was certainly (or almost certainly) causing McGinnis some level of emotional harm—whether it be due to stress caused by Homeward’s weekly (if not daily) harassing demands; frustration caused by Homeward’s indifference and lack of response to her plight; or worry and fear caused by Homeward’s repeated and obstinate threats of foreclosure—but Homeward nonetheless proceeded in the same aggressive, unresponsive, and condescending tactics in hopes McGinnis would eventually just concede defeat and pay whatever amounts it demanded. As McGin-nis suggested to the jury, under similar circumstances, “most people are going to pay it ... because they don’t want to lose their home.”
4. Homeward's Attempts to Avoid Foreclosure
Finally, McGinnis contends that Homeward’s offering her the opportunity to bring her account current does not negate any inference of specific intent.
McGinnis’s acceptance of Homeward’s non-negotiable terms for avoiding foreclosure would thus not have allowed her to escape Homeward’s tactics unharmed. McGinnis would suffer the same economic injury as if she had previously paid the inflated amounts—without any firm guarantee that she would receive any refund for the overpayments, much less the fees, expenses, and penalties already charged. The Court thus agrees that Homeward’s giving McGinnis an opportunity to bring her account current prior to foreclosure does not preclude an inference of intent to harm.
Accordingly, and after considering the evidence presented by McGinnis against that produced by Homeward, the Court is unable to conclude that the jury’s finding of specific intent and award of uncapped punitive damages was against the great weight of the evidence presented at trial. Neither Homeward’s arguments nor its evidence in conflict with the verdict is enough to set it aside.
Homeward’s Motion for Reduction, New Trial, and/or Remittitur of the punitive damage award is therefore DENIED.
SO ORDERED, this 6th day of March, 2017.
Notes
. See Order, McGinnis v. Am. Home Mortg. Servicing Inc., No. 5:11-CV-284 CAR, Doc. 124 at 42,
. Doc. 145-1 at 1. See also Docs. 135, 136.
. McGinnis v. Am. Home Mortg. Servicing, Inc.,
. See id. at 1264.
. Docs. 145, 147
. Doc. 148
. Doc. 149
. Doc. 148-1
. Doc. 145
. Montgomery Ward & Co. v. Duncan,
. Hewitt v. B.F. Goodrich Co.,
. Williams v. City of Valdosta,
. Lipphardt v. Durango Steakhouse of Brandon, Inc.,
. Johansen v. Combustion Eng'g, Inc.,
. Myers v. Cent. Florida Investments, Inc.,
. See generally, O.C.G.A. § 23-2-114; DeGolyer v. Green Tree Servicing, LLC,
. State Farm Mut. Auto. Ins. Co. v. Campbell,
. Goldsmith v. Bagby Elevator Co.\
. Gore,
. Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc.,
. Campbell,
. Merrick v. Paul Revere Life Ins. Co.,
. See McGinnis,
. Id. at *9, 11-12, aff'd by,
. Id. at aff'd by,
. See Campbell,
. See State Farm,
. See Campbell,
. Id. See also Gore,
. See Campbell,
. Id. at 425.
. The Court is unpersuaded by Homeward’s contention that only the economic- damages should be considered in this analysis. See Goldsmith,
. See Campbell, at 425,
. Action Marine, Inc. v. Cont'l Carbon Inc.,
. See id. at 1322.
. Id.
. Gore,
. See Register v. Rus of Auburn,
. Brim v. Midland Credit Mgmt., Inc.,
.
. Id. at 1261-1262.
. Gore,
. TXO Prod. Corp.,
. Exxon Shipping Co. v. Baker,
. Flying Fish Bikes, Inc. v. Giant Bicycle, Inc.,
. Doc, 89-5 (PL’s Trial Ex. 45)
. Campbell,
. Compare Cont’l Trend Res. v. OXY USA,
. See generally 12 U.S.C. § 2609.
. § 2609(d)(2).
. See Myers,
. If the defendant does not raise (or has waived) a federal due process claim, state courts have applied "state common law criteria for determining whether [the] award is excessive," See Time Warner Entm't Co. v. Six Flags Over Ga. LLC,
. Id. (citing Hosp. Auth. of Gwinnett County v. Jones,
. Id.
. Id.
. Id. at 604. (“We believe the Gore guideposts might also be helpful in determining whether an award of punitive damages is infected by bias or prejudice.”) See also Georgia Clinic, P.C. v. Stout,
. (Id. Western & Atlantic R. v. Burnett,
. Id. at 604 (quoting Western,
. See also Georgia Clinic, P.C. v. Stout,
. See Doc. 145 at 10. .
. See McGinnis,
. See Urti v. Transport Commercial Corp.,
. Hewitt,
. Davis v. Habitat for Humanity of Bay Cty., Inc.,
. See O.C.G.A. § 51-12-5.1(b).
. McGinnis,
. Id.
. See Lipphardt,
. O.C.G.A. § 51-12-5.1(f),(g).
. McGinnis,
. Supra at *6-7.
. McGinnis,
. Id. at *10 (finding "sufficient evidence from which the jury could reasonably find that Homeward acted "in reckless disregard” for the rights of others.”).
. See Viau v. Fred Dean, Inc.,
. See McGinnis,
. Id.
. Id.
. Doc. 147 at 12.
. See Burgos v. Napolitano,
. See J.B. Hunt Transport, Inc. v. Bentley,
. Croley v. Matson Navigation Company,
. Anderson v. Radisson Hotel Corp.,
. See Doc. 147 at 9; Action Marine,
. See id.
. See Action Marine,
. See Doc. 115 at 11-12 (Homeward arguing that ".the punitive damages cap cannot be pierced unless the plaintiff presents sufficient evidence to show that the defendant actually intended to injure the plaintiff.... In other words, under Georgia law, uncapped punitive damages are only permitted where there is evidence that the defendant specifically set out to do harm to the plaintiff”) (citation omitted).
. McGinnis made a similar argument for the jury at trial in closing:' Anybody can make a mistake. It’s understandable. But when you are told about it over and over and over.... When you are sent a fax with bank statements this thick with canceled checks this thick. When you’re talking on the phone constantly with these people. It becomes where it’s no longer a mistake. "You know, at some point it becomes intentional.”
Trial Tr. Vol. Ill, Doc. 110 at 103-104,
. See McGinnis,
. McGinnis,
. Id.
. Id. (noting' "Homeward’s awareness of its error ... opaqueness, unresponsiveriess, and belligerence”).
. McGinnis,
. Id. at *11
. Id.
. Id.
. Doc. 118 at 23.
. Id,at 15.
. 1‘A willful repetition of ... conversion can authorize a claim for punitive damages.” E. Prop. Dev. LLC v. Gill,
. McGinnis,
. Doc. 118 at 14.
. Doc. 118 at 6-7.
. Id. .
. AAF-McQuay, Inc. v. Willis,
. McGinnis,
. Doc. 110 at 104.
. Doc. 114 at 16.
. McGinnis,
. Lipphardt,