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Fla. L. Weekly D1311aTop of Form
Fla. L. Weekly D1311aTop of Form
Torts
— Punitive damages — Discovery — Trial court departed from essential
requirements of law by construing section 768.73(2), governing successive
awards of punitive damages, as permitting discovery of the amount of punitive
damages defendants actually paid in post-judgment settlement of unrelated case
— Statute speaks only in terms of prior punitive damage “award,” not amount
actually paid
— Punitive damages — Discovery — Trial court departed from essential
requirements of law by construing section 768.73(2), governing successive
awards of punitive damages, as permitting discovery of the amount of punitive
damages defendants actually paid in post-judgment settlement of unrelated case
— Statute speaks only in terms of prior punitive damage “award,” not amount
actually paid
KNAUF PLASTERBOARD (TIANJIN) CO.,
LTD., and KNAUF GIPS KG and LEON COSGROVE, LLC, Petitioners, v. WILLIAM BART
ZIEGLER, et al., Respondents. 4th District. Case No. 4D17-844. June 7, 2017.
Petition for writ of certiorari to the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Beatrice Butchko, Judge; L.T. Case No.
502010CA002246XXXXMB. Counsel: James M. Talley and Kyle A. Diamantas of Baker,
Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, for petitioner Knauf
Plasterboard (Tianjin) Co., Ltd., and Knauf GIPS KG. Scott B. Cosgrove and
Garrett Nemeroff of León Cosgrove, LLC, Coral Gables for petitioner León
Cosgrove, LLC. Beverly A. Pohl of Broad and Cassel LLP, Fort Lauderdale, and
Michael K. Wilson of Broad and Cassel LLP, Orlando, for respondents.
LTD., and KNAUF GIPS KG and LEON COSGROVE, LLC, Petitioners, v. WILLIAM BART
ZIEGLER, et al., Respondents. 4th District. Case No. 4D17-844. June 7, 2017.
Petition for writ of certiorari to the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Beatrice Butchko, Judge; L.T. Case No.
502010CA002246XXXXMB. Counsel: James M. Talley and Kyle A. Diamantas of Baker,
Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, for petitioner Knauf
Plasterboard (Tianjin) Co., Ltd., and Knauf GIPS KG. Scott B. Cosgrove and
Garrett Nemeroff of León Cosgrove, LLC, Coral Gables for petitioner León
Cosgrove, LLC. Beverly A. Pohl of Broad and Cassel LLP, Fort Lauderdale, and
Michael K. Wilson of Broad and Cassel LLP, Orlando, for respondents.
(PER CURIAM.) The defendants, a
Chinese drywall manufacturer and distributer (“drywall defendants”), petition
this court for a writ of certiorari seeking review of two non-final orders
permitting discovery of the amount of punitive damages they actually paid in
the post-judgment settlement of an unrelated case. They argue the trial court
departed from the essential requirements of the law by construing section
768.73(2), Fla. Stat. (2016) to allow for such discovery.1 We agree and grant the petition.
Chinese drywall manufacturer and distributer (“drywall defendants”), petition
this court for a writ of certiorari seeking review of two non-final orders
permitting discovery of the amount of punitive damages they actually paid in
the post-judgment settlement of an unrelated case. They argue the trial court
departed from the essential requirements of the law by construing section
768.73(2), Fla. Stat. (2016) to allow for such discovery.1 We agree and grant the petition.
The drywall defendants were sued in
a prior unrelated case (“Robin action”). On November 22, 2013, the jury awarded
$1,000,000 in punitive damages against Defendant KPT and $5,000,000 in punitive
damages against Defendant Knauf Gips. The parties subsequently entered into a
post-judgment settlement and recorded a satisfaction of judgment.
a prior unrelated case (“Robin action”). On November 22, 2013, the jury awarded
$1,000,000 in punitive damages against Defendant KPT and $5,000,000 in punitive
damages against Defendant Knauf Gips. The parties subsequently entered into a
post-judgment settlement and recorded a satisfaction of judgment.
Here, the drywall defendants seek to
avoid a punitive damages claim in this case based upon the punitive damage
award in the Robin action. They filed a Proffer of Proof of Prior Punitive
Damages Award and Renewed Motion to Strike Plaintiff’s Punitive Damages Claim.
They argued section 768.73(2) prohibits a subsequent punitive damage award if
punitive damages were previously awarded in any action alleging harm from the
same course of conduct for which punitive damages were already awarded.
avoid a punitive damages claim in this case based upon the punitive damage
award in the Robin action. They filed a Proffer of Proof of Prior Punitive
Damages Award and Renewed Motion to Strike Plaintiff’s Punitive Damages Claim.
They argued section 768.73(2) prohibits a subsequent punitive damage award if
punitive damages were previously awarded in any action alleging harm from the
same course of conduct for which punitive damages were already awarded.
Specifically, section 768.73(2)
provides:
provides:
(a) Except
as provided in paragraph (b), punitive damages may not be awarded against
a defendant in a civil action if that defendant establishes, before trial, that
punitive damages have previously been awarded against that defendant in
any state or federal court in any action alleging harm from the same act or
single course of conduct for which the claimant seeks compensatory damages. For
purposes of a civil action, the term “the same act or single course of conduct”
includes acts resulting in the same manufacturing defects, acts resulting in
the same defects in design, or failure to warn of the same hazards, with
respect to similar units of a product.
as provided in paragraph (b), punitive damages may not be awarded against
a defendant in a civil action if that defendant establishes, before trial, that
punitive damages have previously been awarded against that defendant in
any state or federal court in any action alleging harm from the same act or
single course of conduct for which the claimant seeks compensatory damages. For
purposes of a civil action, the term “the same act or single course of conduct”
includes acts resulting in the same manufacturing defects, acts resulting in
the same defects in design, or failure to warn of the same hazards, with
respect to similar units of a product.
(b) In
subsequent civil actions involving the same act or single course of conduct for
which punitive damages have already been awarded, if the court
determines by clear and convincing evidence that the amount of prior punitive
damages awarded was insufficient to punish that defendant’s behavior,
the court may permit a jury to consider an award of subsequent punitive
damages. In permitting a jury to consider awarding subsequent punitive
damages, the court shall make specific findings of fact in the record to
support its conclusion. In addition, the court may consider whether the
defendant’s act or course of conduct has ceased. Any subsequent punitive damage
awards must be reduced by the amount of any earlier punitive damage awards
rendered in state or federal court.
subsequent civil actions involving the same act or single course of conduct for
which punitive damages have already been awarded, if the court
determines by clear and convincing evidence that the amount of prior punitive
damages awarded was insufficient to punish that defendant’s behavior,
the court may permit a jury to consider an award of subsequent punitive
damages. In permitting a jury to consider awarding subsequent punitive
damages, the court shall make specific findings of fact in the record to
support its conclusion. In addition, the court may consider whether the
defendant’s act or course of conduct has ceased. Any subsequent punitive damage
awards must be reduced by the amount of any earlier punitive damage awards
rendered in state or federal court.
(Emphases added).
The trial court held an evidentiary
hearing to determine whether there was clear and convincing evidence that the
drywall defendants were sufficiently punished. The trial court explained that
the statute simply prevents multiple punishments for the same conduct as long
as the defendant was sufficiently punished. The judge reasoned: “Now, if there
was a nominal amount that . . . didn’t really constitute any significant
punishment then that might be an issue for the judge to decide whether or not
we should allow the jury to entertain those thoughts.”
hearing to determine whether there was clear and convincing evidence that the
drywall defendants were sufficiently punished. The trial court explained that
the statute simply prevents multiple punishments for the same conduct as long
as the defendant was sufficiently punished. The judge reasoned: “Now, if there
was a nominal amount that . . . didn’t really constitute any significant
punishment then that might be an issue for the judge to decide whether or not
we should allow the jury to entertain those thoughts.”
The plaintiff argued the award in
the Robin action was never actually paid because of a settlement. He argued
that since the defendants had not paid the award, they had not been punished.
The plaintiff argued that the defendants had taken the position that punitive
damages were not recoverable in Germany where they had moved all of their
assets.
the Robin action was never actually paid because of a settlement. He argued
that since the defendants had not paid the award, they had not been punished.
The plaintiff argued that the defendants had taken the position that punitive
damages were not recoverable in Germany where they had moved all of their
assets.
The court denied the request to add
a punitive damage claim without prejudice. The court explained the plaintiff
could still conduct discovery and amend his motion. The plaintiff reminded the
court that he had already been allowed to plead the punitive damages claim and,
unless the court allowed plaintiff to depose a corporate representative, there
was no way to get the relevant information.
a punitive damage claim without prejudice. The court explained the plaintiff
could still conduct discovery and amend his motion. The plaintiff reminded the
court that he had already been allowed to plead the punitive damages claim and,
unless the court allowed plaintiff to depose a corporate representative, there
was no way to get the relevant information.
Following the hearing, the court
granted the drywall defendants’ motion to strike plaintiff’s punitive damages
claim without prejudice. The court found the drywall defendants met their
initial burden of showing the prior punitive damages award was sufficient, and
no clear and convincing evidence was presented that the prior award was
insufficient to punish the drywall defendant’s behavior. But, the court granted
plaintiff leave to conduct discovery as to whether the drywall defendants paid
the punitive damages award in the Robin action.
granted the drywall defendants’ motion to strike plaintiff’s punitive damages
claim without prejudice. The court found the drywall defendants met their
initial burden of showing the prior punitive damages award was sufficient, and
no clear and convincing evidence was presented that the prior award was
insufficient to punish the drywall defendant’s behavior. But, the court granted
plaintiff leave to conduct discovery as to whether the drywall defendants paid
the punitive damages award in the Robin action.
Plaintiff then filed a request for
production seeking the confidential settlement agreement and copies of the
settlement payment check or wire payment in the Robin action. After receiving
subpoenas, the Robins’ counsel moved for a protective order. The Robins’
counsel argued that Florida law disfavors disclosure of settlement agreements.
The requested discovery sought potential attorney-client, private financial,
and irrelevant information. Finally, the subpoena improperly sought information
from the law firm rather than the drywall defendants.
production seeking the confidential settlement agreement and copies of the
settlement payment check or wire payment in the Robin action. After receiving
subpoenas, the Robins’ counsel moved for a protective order. The Robins’
counsel argued that Florida law disfavors disclosure of settlement agreements.
The requested discovery sought potential attorney-client, private financial,
and irrelevant information. Finally, the subpoena improperly sought information
from the law firm rather than the drywall defendants.
The drywall defendants also moved
for a protective order arguing the requested information was irrelevant,
confidential, and privileged. They maintained that the only relevant
consideration was the punitive damage “award,” not the amount paid in the Robin
action. The drywall defendants argued the plaintiff wanted the information to
aid him in negotiating a favorable settlement.
for a protective order arguing the requested information was irrelevant,
confidential, and privileged. They maintained that the only relevant
consideration was the punitive damage “award,” not the amount paid in the Robin
action. The drywall defendants argued the plaintiff wanted the information to
aid him in negotiating a favorable settlement.
They reminded the court that
deposing opposing counsel in a pending case is extraordinary and should only be
allowed if there are no other means to obtain the information. Discovery of
settlement agreements is rarely granted. Counsel acknowledged that such
discovery was available where there was a setoff. But, counsel suggested that
it would be impractical for the statute to take into account how much was paid.
deposing opposing counsel in a pending case is extraordinary and should only be
allowed if there are no other means to obtain the information. Discovery of
settlement agreements is rarely granted. Counsel acknowledged that such
discovery was available where there was a setoff. But, counsel suggested that
it would be impractical for the statute to take into account how much was paid.
The court pointed out that the
statute would have no import if the drywall defendants actually paid nothing
and were not punished. The court commented that it had seen this before in
product liability and medical malpractice cases where there are confidential
settlement agreements that are intended to hide wrongdoing from the public,
contrary to the transparency that the judicial system should afford. In the
court’s view, the statute’s protection implied the defendant paid a fair share
of the punitive damages.
statute would have no import if the drywall defendants actually paid nothing
and were not punished. The court commented that it had seen this before in
product liability and medical malpractice cases where there are confidential
settlement agreements that are intended to hide wrongdoing from the public,
contrary to the transparency that the judicial system should afford. In the
court’s view, the statute’s protection implied the defendant paid a fair share
of the punitive damages.
The court agreed the plaintiff
should not depose opposing counsel because the requested information could be
obtained through a request for production. The court also agreed that a
defendant should not be punished repeatedly for the same conduct. The court
noted that if defendants paid the punitive damages, the issue was moot. But, if
the defendant did not pay, then the statute was not producing the protection
intended.
should not depose opposing counsel because the requested information could be
obtained through a request for production. The court also agreed that a
defendant should not be punished repeatedly for the same conduct. The court
noted that if defendants paid the punitive damages, the issue was moot. But, if
the defendant did not pay, then the statute was not producing the protection
intended.
The court ordered the drywall
defendants to provide the documents under seal for an in camera inspection. The
defendants advised they would ask for a stay for appellate review; the court
advised it would not prolong the case. The court entered a written order
consistent with its oral ruling.
defendants to provide the documents under seal for an in camera inspection. The
defendants advised they would ask for a stay for appellate review; the court
advised it would not prolong the case. The court entered a written order
consistent with its oral ruling.
The court subsequently entered an In
Camera Inspection Order. After reviewing the sealed record, the court overruled
the defense objections and ordered the drywall defendants to produce the
following discovery within twenty days: (1) a copy of the August 5, 2016,
original settlement, release, and indemnification agreement between the Robins
and the Knauf defendants; (2) the May 13, 2016, wire transfer notification
email; (3) the August 12, 2016, wire transfer notification email; and (4) the
August 18, 2016, wire transfer notification.
Camera Inspection Order. After reviewing the sealed record, the court overruled
the defense objections and ordered the drywall defendants to produce the
following discovery within twenty days: (1) a copy of the August 5, 2016,
original settlement, release, and indemnification agreement between the Robins
and the Knauf defendants; (2) the May 13, 2016, wire transfer notification
email; (3) the August 12, 2016, wire transfer notification email; and (4) the
August 18, 2016, wire transfer notification.
The drywall defendants now seek
certiorari review of the order requiring production of discovery and the In
Camera Inspection Order.
certiorari review of the order requiring production of discovery and the In
Camera Inspection Order.
Certiorari is available to review
whether a defendant was afforded statutorily guaranteed process before allowing
a claim for punitive damages. Globe Newspaper Co. v. King, 658 So. 2d
518, 520 (Fla. 1995). Certiorari is also proper to review an order allowing
discovery of privileged or confidential information that could cause
irreparable harm. Neiman v. Naseer, 47 So. 3d 954, 954-55 (Fla. 4th DCA
2010). Discovery of “ ‘cat out of the bag’ material that could be used to
injure another person or party outside the context of the litigation, and
material protected by privilege, trade secrets, work product, or involving a
confidential informant may cause such injury if disclosed.” Allstate Ins.
Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995).
whether a defendant was afforded statutorily guaranteed process before allowing
a claim for punitive damages. Globe Newspaper Co. v. King, 658 So. 2d
518, 520 (Fla. 1995). Certiorari is also proper to review an order allowing
discovery of privileged or confidential information that could cause
irreparable harm. Neiman v. Naseer, 47 So. 3d 954, 954-55 (Fla. 4th DCA
2010). Discovery of “ ‘cat out of the bag’ material that could be used to
injure another person or party outside the context of the litigation, and
material protected by privilege, trade secrets, work product, or involving a
confidential informant may cause such injury if disclosed.” Allstate Ins.
Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995).
The drywall defendants argue the
trial court departed from the essential requirements of law by misreading the
relevant statute, which is clear on its face, and by ordering production of
irrelevant confidential terms of the settlement in an unrelated case. They
suggest the trial court’s interpretation of the statute would discourage
settlements and subject defendants to endless punitive damage awards. They
maintain the amount paid in the Robin action settlement is irrelevant because
the statute speaks only in terms of an award. They argue they are in a catch-22
situation because they will either have to provide the discovery or forgo their
statutory protection against successive punitive damage awards.
trial court departed from the essential requirements of law by misreading the
relevant statute, which is clear on its face, and by ordering production of
irrelevant confidential terms of the settlement in an unrelated case. They
suggest the trial court’s interpretation of the statute would discourage
settlements and subject defendants to endless punitive damage awards. They
maintain the amount paid in the Robin action settlement is irrelevant because
the statute speaks only in terms of an award. They argue they are in a catch-22
situation because they will either have to provide the discovery or forgo their
statutory protection against successive punitive damage awards.
We agree with the drywall
defendants’ argument that section 768.73(2) speaks only in terms of a prior
punitive damage “award.” In fact, some derivation of the word “award” appears
eight times within this subsection. But, not once does any derivation of the
word “paid” appear. The statute is clear on its face. We will not infer any
other meaning than the plain words chosen by the legislature. Holly v. Auld,
450 So. 2d 217, 219 (Fla.1984) (quoting A.R. Douglass, Inc. v. McRainey,
137 So. 157, 159 (Fla. 1931)).
defendants’ argument that section 768.73(2) speaks only in terms of a prior
punitive damage “award.” In fact, some derivation of the word “award” appears
eight times within this subsection. But, not once does any derivation of the
word “paid” appear. The statute is clear on its face. We will not infer any
other meaning than the plain words chosen by the legislature. Holly v. Auld,
450 So. 2d 217, 219 (Fla.1984) (quoting A.R. Douglass, Inc. v. McRainey,
137 So. 157, 159 (Fla. 1931)).
Accordingly, we quash the trial
court’s two discovery orders.
court’s two discovery orders.
Petition granted; orders quashed. (MAY, CONNER and FORST, JJ., concur.)
__________________
1The plaintiff filed a response and
raised a new argument not made to the trial court. Because the argument was not
preserved, we do not address it in this opinion. See Aills v. Boemi, 29
So. 3d 1105, 1109 (Fla. 2010).
raised a new argument not made to the trial court. Because the argument was not
preserved, we do not address it in this opinion. See Aills v. Boemi, 29
So. 3d 1105, 1109 (Fla. 2010).
* * *