Court affirms default judgment, punitive damages against Summers Co. man

By Nathan Bass | Jul 30, 2013

CHARLESTON – A Summers County man has failed in his attempt to get the state Supreme Court to set aside a default judgment awarded to a couple who alleged he had slandered the title to a piece of property they own.

The court released its unanimous opinion on June 28, affirming the judgment of the Circuit Court of Summers County.

In 2010, Plaintiffs/Respondents Michael D. Skinner and Linda Catherine Skinner filed a lawsuit alleging that Defendant/Petitioner Richard T. McFall slandered the title to a recorded deed. The deed was alleged to be an encumbrance on the title to the Skinner’s 55.1 acre tract in Summers County.

The Skinners had purchased the tract from the person who had purchased it from Claire Marie McFall, Richard McFall’s sister. Richard McFall had signed, as a witness, the deed that previously transferred the 55.1 acre tract from his sister to the Skinner’s predecessor on December 27, 1976.

The 55.1 acre tract was part of a 104.6 acre tract obtained by Claire Marie McFall in 1973.

The Skinners alleged that Richard McFall had then purported to pledge the entire 104.6 acre tract of land, including the 55.1 acre tract that they now owned, as collateral for a bank loan in 1990.

The complaint alleged a loss of the sale of 3.5 acres of the total tract as a result of a title examination that revealed “clouds to the title” because of Richard McFall’s actions. The Skinners asserted that these actions were done with malice, especially in light of Richard McFall’s having witnessed the earlier conveyance of the 55.1 acres by his sister.

McFall initially answered pro se but later retained counsel. The Skinners served discovery on McFall and McFall failed to respond within the required 30 days. McFall’s counsel was ultimately allowed to withdraw because of “petitioner’s refusal to cooperate with him,” the opinion says.

On Oct. 7, 2011, the circuit court found that McFall had “willfully violated the circuit court’s repeated direction and failed to provide any good faith excuse,” struck McFall’s pleadings and awarded default judgment to the Skinners. After a separate hearing regarding damages, the court awarded the Skinners $15,310 in compensatory damages and $10,000 in punitive damages.

On appeal, McFall asserted numerous errors including the circuit court’s striking of his pleadings, awarding of default judgment to the Skinners and the court’s failure to make the appropriate findings to support an award of punitive damages.

“The circuit court found that ‘there is no less restrictive sanction’ and ‘no more appropriate remedy’ than striking petitioner’s pleadings and granting respondents default judgment,” the court wrote.

“The circuit court noted that petitioner’s failure to cooperate in discovery had caused an extensive delay in the proceedings, that ‘there is little, if any, good faith defense to the complaint filed,’ and that the decision to impose these sanctions was made ‘after due deliberation.’

“While petitioner argues that the circuit court failed to apply the appropriate test and weigh the appropriate factors, it is clear that the circuit court made the appropriate findings prior to imposing sanctions. For these reasons, the Court finds no abuse of discretion in the sanctions.”

The court then moved to the issue of punitive damages.

“When this Court, or a trial court, reviews an award of punitive damages, the court must first evaluate whether the conduct of the defendant toward the plaintiff entitled the plaintiff to a punitive damage award under Mayer v. Frobe, and its progeny. If a punitive damage award was justified, the court must then examine the amount of the award pursuant to the aggravating and mitigating criteria set out in Garnes v. Fleming Landfill, Inc., and the compensatory/punitive damage ratio established in TXO Production Corp. v. Alliance Resources Corp.," the opinion says.

“First, it is clear that under Mayer, petitioner’s conduct toward respondents entitled them to punitive damages. We have stated that ‘in actions of tort, where gross fraud, malice, oppression, or wanton, willful, or reckless conduct or criminal indifference to civil obligations affecting the rights of others appear, or where legislative enactment authorizes it, the jury may assess exemplary, punitive, or vindictive damages; these terms being synonymous.’

“As noted above, the circuit court determined that petitioner had no good faith defense to respondents’ allegations. Further, based on the evidence presented and petitioner’s ‘complete lack of candor with the court,’ the circuit court found that petitioner’s slander to respondents’ title was willful and wanton.

Regarding the Garnes analysis, the court wrote “Based upon our review, the Court finds that the amount of punitive damages awarded is justified by aggravating evidence, including petitioner’s profit in pledging the entirety of the parcel, including respondents’ property, as collateral for a monetary loan. Further, the Court finds that a reduction to the punitive damages should not be permitted, as there is little, if any, mitigating evidence.

“Finally, in analyzing the ratio between compensatory and punitive damages under TXO, the Court has previously held that the outer limit of the ratio of punitive damages to compensatory damages in cases in which the defendant has acted with extreme negligence or wanton disregard but with no actual intention to cause harm and in which compensatory damages are neither negligible nor very large is roughly 5 to 1. However, when the defendant has acted with actual evil intention, much higher ratios are not per se unconstitutional.

“As noted above, the circuit court awarded respondents $15,310 in total compensatory damages and $10,000 in punitive damages, a ratio well within the range set forth above. For these reasons, the Court finds no error in the amount of the circuit court’s award of punitive damages.”

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