In Ranells, we reasoned, as have a number of our sister state courts, that permitting punitive damages against a municipal corporation contravenes public policy.Summary of this case from Spires v. Lancaster
Decided January 8, 1975.
Damages — Punitive damages not recoverable, when — Against municipal corporation — Negligence action — Operation of municipal water department — Liability of municipal corporation.
In the absence of a statute specifically authorizing such recovery, punitive damages can not be assessed against a municipal corporation.
APPEAL from the Court of Appeals for Cuyahoga County.
On May 8, 1969, a severe electrical storm cut off the supply of electric power in parts of Cleveland. Among those entities affected were the Fairmount Pumping Station and the Baldwin Filtration Plant, both integral parts of the city's Water Department. During periods of normal operation, water is pumped from Fairmount to Baldwin, where liquid chlorine is converted to gas and added to the water supply. When the power failure stilled the electric pumps at Fairmount, no water moved through the chemical house at Baldwin. To prevent damage to the evaporators at Baldwin, it became necessary to shut off three tanks from which liquid chlorine had been flowing.
The chemical house operator entered the darkened chlorine room, and attempted to close the valve to each tank "by feel." While doing so, he detected a leak in one of the valve assemblies, and when power was restored, he returned to change a washer. Apparently without checking to insure that the valve was completely closed, he began to remove the valve assembly. A substantial quantity of chlorine gas escaped into the room, hitting him in the face, and forcing him to leave and close the door. He or his assistant then activated a blower motor, drawing the gas from the chlorine room and directing it into the atmosphere outside the plant.
Richard and Sandra Ranells, and their three small children, lived immediately across the street from Baldwin. As the discharge of hazardous chlorine gas permeated their neighborhood, they and other residents were evacuated and hospitalized. As a direct result of chlorine gas inhalation, Richard Ranells died on May 9, 1969, approximately 24 hours after the occurrence. His wife, Sandra, died on May 11, 1969, some 51 hours later. Both were conscious and in great pain throughout most of their respective survival periods. The three Ranells children, despite inhaling substantial quantities of the deadly gas, recovered after a period of hospitalization.
The administratrix of the estate of Richard Ranells, and the administrator of the estate of Sandra Ranells, initiated an action in the Court of Common Pleas to recover damages for wrongful death, conscious pain and suffering, and various expenditures incurred by, or on behalf of, the decedents. By alleging wanton misconduct on the part of the city of Cleveland, the plaintiffs sought to recover both compensatory and punitive damages.
The city admitted negligence in causing injury and subsequent death to plaintiffs' decedents, but denied the allegation of wanton misconduct, and objected to the court's charging the jury with regard to punitive damages. Motions by the city for directed verdicts as to the punitive damages causes were overruled.
Critical to the allegations of wanton misconduct was evidence that numerous recommendations to improve safety at the Baldwin plant had been ignored. On three occasions, employees of the City's Air Pollution Control section and Fire Prevention Bureau of the Fire Department had visited the Baldwin plant, and made specific recommendations as to needed improvements. Among them were changing the venting system so as to raise the vent to a level above the roof of the building; the preparation and posting of operations to be carried out in case of emergency; and the installation of a Scrubber, or other comparable device, to dilute the chlorine gas before its discharge into the atmosphere. Despite numerous letters to appropriate city officials, none of the major recommendations was carried out.
The jury returned a verdict for the administratrix of the estate of Richard Ranells in the amount of $616,378.95, including $375,000 in punitive damages. The jury returned a verdict for the administrator of the estate of Sandra Ranells in the amount of $742,653.55, including $375,000 in punitive damages. Judgment was entered upon the verdict.
Appeal was taken to the Court of Appeals, which, by a divided court, affirmed the judgment of the Court of Common Pleas. Two judges held that the issue of punitive damages, grounded upon the allegations of wanton misconduct, was properly submitted to the jury, and that the awards thereon were fully supported by the evidence. One judge dissented, contending that a municipal corporation could not be held liable for punitive damages.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Komito, Nurenberg, Plevin, Jacobsen, Heller McCarthy and Mr. Marshall I. Nurenberg, for appellees.
Mr. Herbert R. Whiting, director of law, and Mr. Thomas A. Smith, for appellant.
We are asked to decide whether the city of Cleveland, having admitted negligence in the operation of its Water Department, can be held liable in punitive damages for alleged wanton misconduct.
Ohio law is well established that a municipal corporation, while acting in a governmental capacity, is immune from liability for tortious conduct. It is equally clear that when acting in a proprietary capacity, a municipal corporation may generally be held liable for tortious conduct in the same manner as would a private corporation or individual. Neither of those basic principles, embodied in this court's application of the doctrine of sovereign immunity, is affected by our disposition of the present case.
It is clear that the city of Cleveland, in the operation of its Water Department, acts in a proprietary capacity. Hall v. Youngstown (1968), 15 Ohio St.2d 160; Barberton v. Miksch (1934), 128 Ohio St. 169.
Nor is it necessary to disturb the jury's awards by way of compensation for wrongful death, conscious pain and suffering, and other necessary and associated expenses. A unanimous Court of Appeals determined those awards to be more than adequately supported by the evidence, and we find nothing which persuades us to disagree.
However, the appellees' allegations of wanton misconduct, and the jury's awards of punitive damages based thereon, present problems of a more serious nature, for if punitive damages are to be awarded, they must further the public policy which justifies them. The petition herein clearly asserts acts of negligence in the handling of a hazardous gas, with some foreknowledge that serious consequences might ensue. Allegations of such a character are sufficient to form the basis for a finding of wanton misconduct. Kellerman v. J.S. Durig Co. (1964), 176 Ohio St. 320, a case upon which both parties rely.
Assuming, arguendo, that wanton misconduct, as defined in Kellerman, forms a sufficient basis for an award of punitive damages, we must determine whether the public policy upon which such awards are based continues in force when the action is one against a municipal corporation.
In Kellerman, it appears that wanton misconduct was alleged, not to obtain punitive damages but rather to avoid the defense of contributory negligence. The Kellerman definition of wanton misconduct implied "a disposition to perversity and a failure to exercise any care toward those to whom a duty of care was owing when the probability that harm would result from such failure was great and such probability was actually known, or in the circumstances ought to have been known, to the defendant." Other Ohio cases, alleging wanton misconduct to avoid the draconian effect of Ohio's automobile guest statute, define the concept in similar terms. Botto v. Fischesser (1963), 174 Ohio St. 322; Helleren v. Dixon (1949), 152 Ohio St. 40. But the policy considerations involved in a case in which punitive damages are sought seem different from those found in a contributory negligence or guest statute situation.
Traditionally, punitive damages have been allowed only in cases involving specific statutory provisions or intentional acts of wrongdoing. Such recoveries have become commonplace in actions involving assault and battery, wrongful arrest, false imprisonment, alienation of affection or criminal conversation, libel or slander, invasion of privacy, conversion, and other wrongs of a similar nature. 16 Ohio Jurisprudence 2d 179, Section 156. However, our research fails to disclose a case in which this court has awarded punitive damages for alleged wanton misconduct, and only one case in which an Ohio Court of Appeals has done so.
In Gearhart v. Angeloff (1969), 17 Ohio App.2d 143, the proprietor of a bar negligently fired a revolver in the direction of two men scuffling on the floor, in an effort to break up a disturbance. The bullet missed the intended victim, but grazed the arm of Gearhart, an innocent bystander. In upholding an award of both compensatory and punitive damages, the Court of Appeals for Summit County noted that intentional wrongdoing, or other outrageous conduct, would support an award of punitive damages. The court quoted Smithhisler v. Dutter (1952), 157 Ohio St. 454, 461, and Saberton v. Greenwald (1946), 146 Ohio St. 414, 437, to the effect that such damages would be allowed where "`wrongdoing has been intentional and deliberate, or has the character of outrage frequently associated with crime.'" Inferentially, application of the doctrine of transferred intent to the facts in Gearhart would yield the finding of a common law battery, a criminal offense under modern-day statutes.
No prior decisions of this court are controlling on this point. Appellees cite Dayton v. Pease (1854), 4 Ohio St. 80; Hack v. Salem (1963), 174 Ohio St. 383; and Moloney v. Columbus (1965), 2 Ohio St.2d 213, to support the proposition that a municipal corporation, when acting in a proprietary capacity, assumes liability in a manner identical to a private corporation. In none of the cited cases were punitive damages either sought or awarded. Thus the present case, specifically involving the issue of punitive damages, is one of first impression.
This issue has often been resolved by the courts of other states. A substantial majority of jurisdictions treating the issue have held that in the absence of statutory authority specifically providing for an award of punitive damages, an injured plaintiff has no right to recover exemplary or punitive damages against a municipal corporation. See, generally, 57 American Jurisprudence 2d 268, Section 318, and annotation, 19 A.L.R. 2d 903, 905-911. In so holding, the courts have adopted a variety of rationales, the totality of which we find compelling.
"* * * to permit such [punitive] damages against a public corporation is to contravene public policy since the parties who must bear the burden of the punishment are the taxpayers and citizens who constitute the very persons who as a group are to benefit from the public example which the granting of such damages is supposed to make of a wrongdoer."
In Chappell v. Springfield (1968), 423 S.W.2d 810, 814, the Supreme Court of Missouri declared that:
"The theory that punitive damages serve as a deterrent to others adds little justification for the award against a municipality. It is assumed that public officials will do their duty, and if discipline of a wrongdoing municipal employee is indicated, appropriate measures are available through the electorate, or by superior officials responsible to the electorate, without recourse to punitive awards through the courts."
In Costich v. Rochester (1902), 68 A.D. 623, 631, 73 N.Y. Supp. 835, the Appellate Division of the Supreme Court of New York laid to rest the contention that no distinction should exist between private and municipal corporations. Said the court, at page 631: Private corporations "are largely created and administered for purposes of profit or for some other personal object. Those who become members of them do so voluntarily, and in the majority of instances in the hope of gain. There are manifold and speedy ways by which to reach and replace any representative or agent who so mistakes or disregards his duty as to render liable in punitive damages the persons and interests represented by him. The municipal corporation is different. It is not organized for any purpose of gain or profit, but it is a legal creation, engaged in carrying on government and administering its details for the general good and as a matter of public necessity. The individuals who in the aggregate constitute it and submit certain of their affairs to its control and management are not always volunteers in so doing. If they happen to live within the limits of its jurisdiction, they become members of it to the extent of being represented by its agents, and having their property liable for its acts. While theoretically they have a voice in selecting the agents who shall represent and control the municipality, we know that practically it often happens that the government is not of their choice, and its management not in accordance with their judgment."
To assess punitive damages upon entities so different in character, without distinction, defies the logic upon which the framework of a legal system must be based.
It must be continually emphasized that punitive damages are assessed over and above that amount adequate to compensate an injured party. As such, they are nothing less than a windfall to any plaintiff who receives them. When their reason for being — to punish or deter — ceases to exist, the entire rationale supporting them collapses. Appellees' contention that any punitive damage award in the present case will come from the Water Department rather than general revenue funds is literally a distinction without a difference. It matters not whether the burden of meeting a punitive damage obligation falls upon a taxpayer, as a taxpayer, or as a user and consumer of the public water supply.
That the punitive damages awards herein were inappropriate was further dramatized by the admission of evidence as to the wealth of the Water Department of the city of Cleveland. Generally, such evidence is necessary in a punitive damages context, so as to allow the jury to determine that amount of damages sufficient to punish the defendant for its wrongdoing. When the defendant is a municipal corporation, however, admitting such evidence raises the spector of astronomical judgments — because the financial resources of a municipal corporation are, essentially, unlimited. If a city's general revenue fund is involved, taxes can be increased. If a water or other public utility department is involved, assessments can be raised. Yet to eliminate evidence of wealth destroys the punishment rationale by which punitive damages are justified. In neither situation is a satisfactory result achieved.
The rationale supporting the imposition of punitive damages, in the absence of statute, is nebulous at best. When applied to a municipal corporation, or an instrumentality thereof, the rationale dissolves. We affirm the judgment of the Court of Appeals, insofar as it affirmed the judgment of the Court of Common Pleas, awarding the administratrix of the estate of Richard Ranells $185,000 for wrongful death, $6,378.95 for funeral, hospital and other expenses, and $50,000 for conscious pain and suffering. but reverse the judgment awarding $375,000 in punitive damages. We also affirm the judgment of the Court of Appeals, insofar as it affirmed the judgment of the Court of Common Pleas, awarding the administrator of the estate of Sandra Ranells $235,000 for wrongful death, $7,653.55 for funeral, hospital and other expenses, and $125,000 for conscious pain and suffering, but reverse the award of $375,000 in punitive damages.
O'NEILL, C.J., HERBERT, CORRIGAN and STERN, JJ., concur.
CELEBREZZE and W. BROWN, JJ., dissent.
Plaintiffs alleged that defendant's acts "constituted a complete and utter disregard for human life and safety." My review of the record bears out this allegation, and clearly discloses, on the part of the defendant, a continuing hardheartedness toward the residents of the neighborhood surrounding the Baldwin Filtration Plant. Time and again city officials were put on notice that a catastrophe was imminent, but those warnings were ignored to the peril of the citizens of Cleveland.
In my opinion, a better case could not be made for an award of punitive damages. However, a majority of this court seizes this opportunity to formulate a new type of municipal tort immunity.
In Atlantic Great Western Ry. Co. v. Dunn (1869), 19 Ohio St. 162, this court upheld an award of punitive damages against a railway company. In the dissenting opinion it was argued, at page 592, that every dollar of punitive damages assessed against the company would be paid by the stockholders of the company or would be assessed against the public who use the company's roads.
Here, over 100 years later, the majority embraces the rationale of the Dunn dissent by arguing that "* * * the burden of meeting a punitive damage obligation falls upon a taxpayer, as a taxpayer, or as a user and consumer of the public water supply."
Prior to this case, it was assumed by the bench and bar of this state "* * * [t]hat a municipal corporation, as the proprietor of lands, would be responsible for an injury resulting from the use of its own property to an adjacent proprietor, to the same extent as if it were a natural person. * * *" Tiffin v. McCormack (1878), 34 Ohio St. 638, 643.
The state of Ohio is now liable to the same extent as a private party or natural person. R.C. 2743.02(A), in pertinent part, reads:
"The state hereby waives its immunity from liability and consents to be sued, and have its liability determined * * * in accordance with the same rules of law applicable to suits between private parties." (Emphasis added.)
In enacting R.C. 2743.02(A), the General Assembly had, as a guide, the Federal Tort Claims Act, Section 2671 et seq., Title 28, U.S. Code.
Section 2674, Title 28, U.S. Code, reads:
"The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages. * * *" (Emphasis added.)
By that provision, the federal government is expressly absolved of liability for punitive damages. However, the Ohio General Assembly did not follow that provision.
In my view, in order for the state or a municipal corporation not to be answerable in punitive damages, a statute should expressly so provide.
The judgment herein, requiring a statute expressly authorizing punitive damage awards against a municipality, simply places the cart before the horse.