Berkeley Pump Co. v. Reed-Joseph Land Co.

Steele Hays, Justice. In its motion for rehearing, Reed* Joseph contends first, that there was sufficient evidence of misrepresentation and intentional deceit by Berkeley to sustain the submission of the issue of punitive damages to the jury and second, that our opinion erroneously assumed that punitive damages are being claimed against Berkeley and Riceland, when in fact punitive damages are claimed only against Berkeley. Reed-Joseph insists that the trial court carefully adhered to the requirements of Dalrymple v. Fields, 276 Ark. 185 , 633 S.W.2d 362 (1982), and Curtis v. Partain, Judge, 272 Ark. 400 , 614 S.W.2d 671 (1981), and on retrial Evidence of Berkeley’s net worth should be permitted. We concede the merit of the argument with respect to the introduction of Berkeley’s financial condition and modify our opinion accordingly.

While we have held that a plaintiff who claims punitive damages from several defendants waives the right to introduce evidence of the financial worth of one defendant (see Life and Casualty Insurance Co. v. Padgett, 241 Ark. 353 , 407 S.W.2d 728 [1966] and Dalrymple v. Fields, supra), we have not held that where punitive damages are claimed from only one of several defendants, the right to introduce evidence of financial condition is waived, where the alleged improper conduct is different from, and greater than, that of the other defendants. None of the cases cited in the original opinion reached that holding. In Curtis v. Partain, Judge, supra, we granted prohibition against the introduction of financial condition as against only one of several defendants, but it was done because that one defendant was plainly being singled out for a claim of punitive damages for conduct for which all were chargeable. We conclude that if the evidence on retrial is sufficient to submit the issue of punitive damages to the jury, the plaintiff may introduce evidence of Berkeley’s financial condition, with the jury admonished to consider such evidence only in connection with the claim of punitive damages.

As to the other argument, i.e. misrepresentation and deceit, the issue is moot as to the first trial, and we need not belabor the point except to say that our comments in the original opinion were intended to alert the parties and the trial court, for purposes of a second trial, to the fact that the proof of intentional misrepresentation, or fraud, seemed to be too weak to support the issue. Reed-Joseph argued that the fraud was to be found in Berkeley’s deliberate failure to disclose data with respect to the performance of its pumps which was material to Reed-Joseph’s intended use. We could not say categorically, without an independent search of the record, that the proof was lacking; however, we can say it was not demonstrated in the briefs to our satisfaction. Whether the issue will be sufficiently proved on retrial we have no way of predicting.

It should be noted that several cases have contained error because the issue of punitive damages was submitted to the jury when the evidence did not support it [see Life and Casualty Insurance Co. v. Padgett, supra, and Dalrymple v. Fields, supra, for example.] Ordinarily, it is merely harmless error for the issue of punitive damages to be wrongly submitted; however, if evidence of financial condition is also introduced, then the error becomes reversible because a verdict for compensatory damages is tainted by the improper evidence. This is what happened in Padgett and Dalrymple. Thus plaintiffs’ counsel generally would be well advised to use restraint in urging the submission of punitive damages where the evidence is marginal and, especially, in offering proof of financial condition, as reversible error is the likely result if the punitive issue fails on review.

Other points in the petition constitute reargument and need no discussion.

Rehearing denied.