Opinion
No. 6-018 / 05-0518
Filed February 15, 2006
Appeal from the Iowa District Court for Linn County, David L. Baker, Judge.
A trustee appeals from the district court's judgment following a jury verdict in favor of the defendant. AFFIRMED.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellant.
Melody J. Butz of Allen Vernon, P.L.C., Marion, for appellee.
Considered by Sackett, C.J., and Vogel and Mahan, JJ.
This is a dispute between adjoining property owners, plaintiff-appellant Clarmont J. Nemecek, a/k/a Jack Nemecek as Trustee of the Clarmont J. Nemecek and Virginia U. Nemecek Trust ("Nemecek"), and defendant-appellee James Santee ("Santee"). Both parties claimed, among other things, that the other party was trespassing on their land. Santee recovered on part of his counterclaim after a jury found Nemecek had trespassed on Santee's property and awarded him damages, including punitive damages. In addition, the jury found Nemecek interfered with Santee's prospective business advantage and awarded damages. The jury found Nemecek had not proven its claims.
Nemecek contends (1) the district court erred in submitting punitive damages for trespass, (2) the district court should have directed a verdict on Santee's interference claim as Santee failed to introduce substantial evidence of any damages, and (3) the district court should have sustained Nemecek's motion for new trial. We affirm.
BACKGROUND FACTS
Nemecek and Santee own neighboring properties along the Wapsipinicon River in Linn County, Iowa. Nemecek originally owned all the property but retained what is described as Government Lot 2. It is land locked, bordered on the north by government land, on the east by the Wapsipinicon River, and otherwise surrounded by land owned by Santee. Initially Nemecek sued Santee, contending Santee cut and logged trees from Nemecek's property and trespassed on its property. Nemecek further contended Santee's conduct was willful and wanton and that Nemecek was entitled to punitive damages or treble damages pursuant to Iowa Code section 658.4 (2001) for injury to trees.
Santee counterclaimed, contending Nemecek came on Santee's property with the sheriff to eject loggers from Santee's property, installed fence posts, and dammed up a creek so that water overflowed onto Santee's property rather than flowing over on Nemecek's property. Santee contended Nemecek's conduct was intentional and that he is entitled to punitive damages.
Nemecek then amended its petition to allege Santee had trespassed by riding horses on his property and driving four-wheelers there, entering the property on foot, allowing others to enter the property, cutting fences, moving posts, removing no trespassing signs, harassing persons who had permission to be on Nemecek's property, scaring them away and paintball painting and spray painting trees.
The matter was tried to a jury. The jury found on Nemecek's claim that Santee did not cut Nemecek's trees without the permission of Nemecek. The jury found on Santee's counter claim:
1.Nemecek trespassed on Santee's land and that Santee sustained damages of $1.00. The jury found the trespass was in willful wanton disregard of the rights and safety of another and awarded punitive damages of $8,357.14
2.Nemecek did not cause water to be diverted onto Santee's land.
3.Nemecek interfered with the prospective business advantage of Santee and fixed damages of $1,659.00.
The court then entered judgment in favor of Santee and against Clarmont J. Nemecek in the amount of $10,017.14.
The judgment was against Clarmont and not against the trust. No one challenges this fact.
SCOPE OF REVIEW
In a law action tried to the jury, our review is for correction of errors at law, and the jury's findings of fact are binding on us if they are supported by substantial evidence. Hendricks v. Great Plains Supply Co., 609 N.W.2d 486, 490 (Iowa 2000); Grinnell Mut. Reins. Co. v. Voeltz, 431 N.W.2d 783, 785 (Iowa 1988). "Evidence is substantial if reasonable minds would accept it as adequate to reach a conclusion." Schlegel v. Ottumwa Courier, 585 N.W.2d 217, 221 (Iowa 1998).
PUNITIVE DAMAGES
Nemecek does not challenge the finding that it trespassed. It does contend that punitive damages should not have been submitted on trespass. It contends there was not evidence of legal malice as it was merely seeking to preserve its rights as a property owner under the circumstances where the boundaries between the parties' property were in dispute. Nemecek also argues that even if punitive damages were warranted, the amount of the award was excessive.
It appears that a survey commissioned by Nemecek after the litigation was commenced showed Santee not Nemecek owned the disputed parcel.
We review an award of punitive damages for correction of errors at law. Jones v. Lake Park Care Ctr., Inc., 569 N.W.2d 369, 378 (Iowa 1997). Punitive damages are only appropriate when a tort is committed with "either actual or legal malice." Id. "Actual malice may be shown by such things as personal spite, hatred, or ill-will and legal malice may be shown by wrongful conduct committed with a willful or reckless disregard for the rights of another." Id. Under Iowa Code section 668A.1(1)(a), Santee must show "by a preponderance of clear, convincing, and satisfactory evidence" that Nemecek's conduct "constituted willful and wanton disregard for the rights or safety of another." "Thus, merely objectionable conduct is insufficient. . . . To receive punitive damages, Santee must offer evidence of Nemecek's persistent course of conduct to show that Nemecek acted with no care and with disregard to the consequences of those acts." Hockenberg Equip. Co. v. Hockenberg's Equip. Supply Co., 510 N.W.2d 153, 156 (Iowa 1993).
Santee testified that Clarmont Nemecek trespassed on his property at least forty times and was asked to leave at least ten. Santee contends he suffered emotional and economic hardship by Clarmont Nemecek bringing a backhoe across his property, cutting trees to make a path for the backhoe. He further contends Clarmont Nemecek threatened physical harm to Santee at least twice and that he has had to be hyper-vigilant due to the disregard Clarmont Nemecek showed for Santee's property nights.
Under appropriate circumstances a claimant may be entitled to both actual and punitive damages in a trespass case. Bethards v. Shivvers, Inc., 355 N.W.2d 39, 45 (Iowa 1984); Hagenson v. United Telephone Co. of Iowa, 209 N.W.2d 76, 82 (Iowa 1973); Hagenson v. United Telephone Co. of Iowa, 164 N.W.2d 853, 857 (Iowa 1969).
The question is, do such circumstances exist here. Nemecek contends they do not because the acts Santee complains of occurred at a time when there was uncertainty concerning the boundaries of and access rights to the respective properties. Santee argues Nemecek knew the property was land locked when it or Clermont sold the land Santee now owns and filed action to obtain an easement over Santee's property, which was dismissed, thus Clarmont Nemecek knew he had no right to be on Santee's property.
An appellate court reviewing a punitive damage award for excessiveness should consider three "guideposts." BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S. Ct. 1589, 1598, 134 L. Ed. 2d 809, 826 (1996); accord State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S. Ct. 1513, 1520, 155 L. Ed. 2d 585, 601 (2003). These guideposts are:
(1) the degree of reprehensibility of the actor's misconduct, (2) the disparity between the actual or potential harm suffered by the claimant and the punitive damages award, and (3) the difference between the punitive damages awarded by the [trier of fact] and the civil penalties authorized or imposed in comparable cases.
Campbell, 538 U.S. at 418, 123 S. Ct. at 1520, 155 L. Ed. 2d at 601.
1. Degree of reprehensibility.
The degree of reprehensibility of the actor's conduct is said to be the most important indicum of the reasonableness of a punitive damage award. Gore, 517 U.S. at 575, 116 S. Ct. at 1599, 134 L. Ed. 2d at 826. A number of factors should be considered in determining the reprehensibility of Nemecek's conduct: whether (1) the harm caused was physical as opposed to economic, (2) the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others, (3) the conduct involved repeated actions or was an isolated incident, and (4) the harm was the result of intentional malice, trickery, or deceit, or mere accident. See Campbell, 538 U.S. at 419, 123 S. Ct. at 1521, 155 L. Ed. 2d at 602. The existence of any one of these factors weighing in favor of Santee may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect. Id. ( citing Gore, 517 U.S. at 575, 116 S. Ct. at 1599, 134 L. Ed. 2d at 826). However there was clear and convincing evidence from which the jury could have found the conduct was repeated over forty times. It was not a one-time isolated instance. See Wilson v. IBP, Inc., 558 N.W.2d 132, 148 (Iowa 1996). Furthermore, Clarmont intentionally tried to trick Santee into believing the disputed land was owned by Nemecek.
2. Disparity between actual or potential harm and the punitive damage award.
Clarmont's argument points to the disparity between the jury's actual-damage award (one dollar) and its punitive-damage award ($8,357.14). Here the jury was instructed that they could not exceed $1.00 in finding the amount of damages sustained by Clarmont's trespass. Consequently the actual damage award is not an accurate indicator of the actual harm caused by Santee. In Wolf v. Wolf, 690 N.W.2d 887, 895 (Iowa 2005), the Iowa Supreme Court noted that the United States Supreme Court had been "reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the claimant and the punitive damages award," citing Campbell, 538 U.S. at 424, 123 S. Ct. at 1524, 155 L. Ed. 2d at 605. In Gore the Court noted that part of the reason for this is that mathematical formulae are impractical in cases such as this in which the underlying award is one of nominal damages. Gore, 517 U.S. at 582, 116 S. Ct. at 1602, 134 L. Ed. 2d at 830-31 (noting cases of low awards of compensatory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages). Courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the claimant and to the general damages recovered. Campbell, 538 U.S. at 426, 123 S. Ct. at 1524, 155 L. Ed. 2d at 606. "Harm" does not necessarily equate with "damages." In cases where the damage award is nominal courts give great deference to the trial court's discretion as to the amount of the punitive damages award it has permitted to stand. See Edwards v. Jewish Hosp., 855 F.2d 1345, 1352 (8th Cir. 1988). In this case, the harm done to Santee clearly exceeded the amount of compensatory damages awarded him.
3. Comparing the punitive-damage award to civil or criminal penalties authorized in comparable cases.
Another guideline to consider is the disparity between the punitive damage award and the civil or criminal penalties authorized or imposed in comparable cases. Gore, 517 U.S. at 583-84, 116 S. Ct. at 1603, 134 L. Ed. 2d at 831; see also Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23, 111 S. Ct. 1032, 1046, 113 L. Ed. 2d 1, 23 (1991). Comparing the punitive damage award here to other penalties provided by law, we note that Iowa Code Section 716.8(1) provides, "Any person who knowingly trespasses upon the property of another commits a simple misdemeanor." Iowa Code 903.1(1)(a) provides:
For a simple misdemeanor, there shall be a fine of at least fifty dollars but not to exceed five hundred dollars. The court may order imprisonment not to exceed thirty days in lieu of a fine or in addition to a fine.
For forty separate violations of the trespass statute Clarmont could be fined a maximum of $20,000 — more than twice the amount of the punitive damages awarded.
We conclude punitive damage award is supported by clear and convincing evidence and is not grossly excessive. See Wolf v. Wolf, 690 N.W.2d 887, 896 (Iowa 2005).
INTERFERENCE CLAIM
Nemecek contends a verdict should have been directed on the interference claim as there was no evidence of damages. Santee contends there were sufficient business records to support his damages for interference. We agree. The award is modest and supported by substantial evidence. Evidence is substantial when a reasonable mind would accept it as adequate to reach a conclusion. Crookham v. Riley, 584 N.W.2d 258, 265 (Iowa 1998).
MOTION FOR NEW TRIAL
Nemecek contends he should have a new trial. We review the denial of a motion for a new trial for abuse of discretion. Seastrom v. Farm Bureau Life Ins. Co., 601 N.W.2d 339, 345 (Iowa 1999); Bredberg v. Pepsico, Inc., 551 N.W.2d 321, 326 (Iowa 1996). If the jury verdict is not supported by sufficient evidence and fails to effectuate substantial justice, a new trial may be ordered. Seastrom, 601 N.W.2d at 346. The district court did not abuse its discretion in not ordering a new trial.