Torts
— Automobile accident — Punitive damages in an amount which equaled 100% of
defendant’s net worth was so excessive as to be unconstitutional — On remand,
trial court may remit punitive damages award to reasonable proportion of
defendant’s net worth or order new trial on punitive damages if plaintiffs do
not wish to accept remittitur

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant,
v. ARTHUR L. BREWER and BARBARA J. BREWER, Appellees. 2nd District. Case No.
2D14-2611. WILLIAM EDWARD GOELLNER, Appellant, v. ARTHUR L. BREWER and BARBARA
J. BREWER, Appellees. Case No. 2D14-2685. (Consolidated) Opinion filed May 4,
2016. Appeals from the Circuit Court for Polk County; J. Dale Durrance and
Catherine L. Combee, Judges. Counsel: Anthony J. Russo and Jared M. Krukar of
Butler Weihmuller Katz Craig LLP, Tampa, for Appellant State Farm Mutual
Automobile Insurance Company. Mark D. Tinker, Charles W. Hall, and DeeAnn
Petika McLemore of Banker Lopez Gassler, P.A., St. Petersburg, for Appellant
William Edward Goellner. Joel D. Eaton of Podhurst Orseck, P.A., Miami;
Brennan, Holden & Kavouklis, P.A., Tampa; and The Brooks Law Group, Winter
Haven, for Appellees.

(VILLANTI, Chief Judge.) In these consolidated appeals,
William Edward Goellner and his insurer, State Farm Mutual Automobile Insurance
Company (collectively Goellner), seek review of the final judgment entered in
favor of Arthur L. and Barbara J. Brewer in this personal injury case arising
from an automobile accident. We affirm the final judgment in favor of the
Brewers to the extent that it awards them compensatory damages without
discussion of the issues raised by Goellner relating to these awards. However,
because the punitive damages award is excessive to the point of being
unconstitutional, we must reverse that award and remand for further
proceedings.

Goellner and Arthur Brewer were involved in an automobile
accident in the early morning hours of November 30, 2008. The evidence was
undisputed that Goellner — a physician — fell asleep at the wheel, thus
causing the accident. The disputed evidence concerned the extent of Mr.
Brewer’s injuries and why Goellner fell asleep. Goellner testified that he was
simply tired after a long day. However, the Brewers presented some evidence
that Goellner had taken prescription sleeping medication before setting out on
the three-hour drive from The Villages to Sebring. On the basis of the
medication evidence, the Brewers sought leave to seek punitive damages, which
the trial court granted. Goellner did not appeal that ruling.

At Goellner’s request, the trial court bifurcated the trial.
The jurors first heard evidence concerning the accident and Mr. Brewer’s
injuries. At the conclusion of that part of the trial, the jurors were asked to
return a verdict on the issues of whether the Brewers were entitled to
compensatory damages; if so, the amount of such damages; and whether the
Brewers were entitled to an award of punitive damages. The jury returned a
verdict awarding Mr. Brewer $628,697.61 and Mrs. Brewer $109,500 in
compensatory damages, and it found that the Brewers were entitled to an award
of punitive damages.

The second part of the trial then addressed the amount of
punitive damages. The Brewers presented no additional evidence in this portion
of the trial and asked only for the jurors to award an amount that was
appropriate to punish Goellner. In turn, Goellner testified that he had
approximately $300,000 in bank and retirement accounts and a vehicle worth
approximately $500. He testified that he did not own any other assets. He also
testified that he owed approximately $16,000 in taxes, making his net worth $284,000.
He then testified to his monthly income and expenses. The Brewers did not
specifically controvert any of this evidence. In argument, while Goellner
conceded that the jurors were entitled to award punitive damages, he asserted
that any punitive damages award should not be so large as to financially
devastate him. Despite this argument, the jury returned an award of punitive
damages in the amount of $284,000 — or 100% of Goellner’s net worth. Goellner
filed a motion for remittitur or new trial, which the trial court denied. The
court then entered final judgment against Goellner for the full amount of the
jury’s verdict.

In this appeal, Goellner argues that the award of punitive
damages is so large as to be unconstitutional. The purpose of an award of punitive
damages is “to further a State’s legitimate interests in punishing unlawful
conduct and deterring its repetition.” BMW of N. Am., Inc. v. Gore, 517
U.S. 559, 568 (1996). While the amount of punitive damages necessary to
accomplish these aims is generally left to the discretion of the jury, “the
imposition of a punitive damage award is subject to constitutional limitations
because ‘[t]he Due Process Clause of the Fourteenth Amendment prohibits a state
from imposing a “grossly excessive” punishment on a tortfeasor.’ ” R.J.
Reynolds Tobacco Co. v. Townsend, 90 So. 3d 307, 312-13 (Fla. 1st DCA 2012)
(quoting BMW, 517 U.S. at 562); see also R.J. Reynolds Tobacco
Co. v. Martin, 53 So. 3d 1060, 1071-72 (Fla. 1st DCA 2010) (quoting Cooper
Indus., Inc. v Leatherman Tool Grp., 532 U.S. 424, 433-34 (2001)). This
court reviews “a trial court’s determination as to whether a punitive damage
award exceeds the boundaries of due process . . . de novo.” Engle v. Liggett
Grp., Inc., 945 So. 2d 1246, 1263 (Fla. 2006) (citing Cooper Indus.,
532 U.S. at 436).

When determining whether a specific punitive damages award
is “grossly excessive” for constitutional purposes, the court must consider
whether “the award is out of proportion to the defendant’s net worth.” Arab
Termite & Pest Control of Fla., Inc. v. Jenkins, 409 So. 2d 1039, 1043
(Fla. 1982). Proportionality is assessed by determining whether the award
“bears some relationship to the defendant’s ability to pay and does not result
in economic castigation or bankruptcy of the defendant.” Engle, 945 So.
2d at 1263-64. The award “should be painful enough to provide some retribution
and deterrence, but should not be allowed to destroy the defendant.” Arab
Termite & Pest Control, 409 So. 2d at 1043; see also Joab,
Inc. v. Thrall, 245 So. 2d 291, 293 (Fla. 3d DCA 1971) (“In awarding
punitive damages the jury may properly punish each wrongdoer by exacting from
his pocketbook a sum of money which, according to his financial ability, will
hurt, but not bankrupt . . . .”). Put simply, an award of punitive damages that
bankrupts or financially devastates the defendant is unconstitutionally
excessive. See Hockensmith v. Waxler, 524 So. 2d 714, 715 (Fla.
2d DCA 1988); Smith v. Telophase Nat’l Cremation Soc’y, Inc., 471 So. 2d
163, 169 (Fla. 2d DCA 1985); Young v. Becker & Poliakoff, P.A., 88
So. 3d 1002, 1007 (Fla. 4th DCA 2012); Lipsig v. Ramlawi, 760 So. 2d
170, 188 (Fla. 3d DCA 2000).

We readily admit, as have other courts, that drawing the
line between constitutionally permissible and unconstitutionally excessive can
be difficult in the context of punitive damages awards; however, there are some
clear rules. Courts have generally held that a punitive damages award that
exceeds the defendant’s net worth is unconstitutional. See, e.g., Hockensmith,
524 So. 2d at 715 (holding that award of punitive damages that was nearly four
times the defendant’s net worth was unconstitutionally excessive); Smith,
471 So. 2d at 170 (affirming remittitur of $1,250,000 punitive damages award to
$200,000 where defendant had a net worth of $1,000,000 because the original
award was unconstitutionally excessive). On the other hand, even very large
punitive damages awards will be affirmed when they take but a small proportion
of the defendant’s net worth. See, e.g., Bould v. Touchette, 349
So. 2d 1181, 1187 (Fla. 1977) (affirming an $800,000 punitive damages award
when the defendant had a net worth in excess of $13 million); Am. Med.
Int’l, Inc. v. Scheller, 590 So. 2d 947, 951 (Fla. 4th DCA 1991) (affirming
a $19 million punitive damages award when the defendant had a demonstrated net
worth in excess of $1 billion). These rules further the public policy that
favors the payment of judgments. Other than these two rules, however, little
guidance exists.

We have been unable to find any case presenting the exact
issue raised here — a punitive damages award that takes exactly 100% of the
defendant’s net worth. However, we are guided by the Fourth District’s decision
in Young, in which that court affirmed the trial court’s ruling that a
punitive damages award representing forty percent of the defendant’s net worth
was excessive. 88 So. 3d at 1007. Certainly if an award of forty percent of net
worth is unconstitutionally excessive, then an award of 100% of net worth is likewise
excessive.

Therefore, because the $284,000 punitive damages award is
excessive in light of Goellner’s net worth and would result in financial
devastation, we reverse that award and remand for further proceedings. On
remand, the trial court may, in its sound discretion, remit the punitive
damages award to a reasonable proportion of Goellner’s net worth. If the
Brewers do not wish to accept the remittitur, they are entitled to a new trial
on the sole issue of the amount of punitive damages. See Smith,
471 So. 2d at 170; see also § 768.043(1), Fla. Stat. (2008).

Affirmed in part, reversed in part, and remanded for further
proceedings. (SILBERMAN and CRENSHAW, JJ., Concur.)

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