GSNC

§ 1D-1. Purpose of punitive damages.

Punitive damages may be awarded, in an appropriate case and subject to the provisions of this Chapter, to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts.

History

(1995, c. 514, s. 1.)

Cross References. - As to cap on stay of execution bonds pending appeal with respect to noncompensatory damages, see G.S. 1-289(b).

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

For comment, "Punitive Damages in Medical Malpractice: An Economic Evaluation," see 81 N.C.L. Rev. 2371 (2003).

For article, "Punitive Damages in an Era of Consolidated Power,” see 98 N.C.L. Rev. 315 (2020).

CASE NOTES

This section does not apply to incidents that occurred before it was enacted. Connelly v. Family Inns of Am., Inc., 141 N.C. App. 583, 540 S.E.2d 38 (2000).

Deceased Defendant. - When an alleged injured party sought punitive damages against a motorist who died prior to the filing of the alleged injured party's complaint, the alleged injured party's claim for punitive damages was properly dismissed because the purpose in G.S. 1D-1 of deterring the motorist from committing similar wrongful acts could not be achieved. Harrell v. Bowen, 179 N.C. App. 857, 635 S.E.2d 498 (2006), aff'd, 362 N.C. 142, 655 S.E.2d 350 (2008).

Text of G.S. 1D-1 provides that punitive damages could be awarded "to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts," and it was a common rule of statutory construction that when the conjunctive "and" connected words, phrases or clauses of a statutory sentence, they were to be considered jointly, so an individual was subject to punitive damages where he or she could be punished for the egregiously wrongful act and be deterred from committing such an act in the future, but this did not apply to a deceased defendant. Harrell v. Bowen, 179 N.C. App. 857, 635 S.E.2d 498 (2006), aff'd, 362 N.C. 142, 655 S.E.2d 350 (2008).

Summary Judgment. - Officer was not entitled to summary judgment dismissing a citizen's punitive damages claim in an action alleging excessive force because: (1) the citizen alleged sufficiently egregious conduct to find the officer's willful and intentionally or recklessly injurious conduct, and (2) the officer did not show the citizen could not support the citizen's claims. Hart v. Brienza, 246 N.C. App. 426, 784 S.E.2d 211, review denied, 793 S.E.2d 223, 2016 N.C. LEXIS 841 (2016).

Entitlement to Punitive Damages. - Borrowers established willful or wanton tortious activity by a bank subsidiary pursuant to G.S. 1D-5(7) because the borrowers proved facts sufficient to show that the actions of the subsidiary were in conscious and intentional disregard of and indifference to the rights of the borrowers; furthermore, the subsidiary knew or should have known that by selling unlawful insurance with mortgage loans, its actions were reasonably likely to result in injury, damage, or other harm. Richardson v. Bank of Am., N.A., 182 N.C. App. 531, 643 S.E.2d 410 (2007), petition allowed as to additional issues 361 N.C. 569, 650 S.E.2d 439 (2007).

Claim for punitive damages could not be asserted against a decedent's estate on the basis of his alleged egregiously wrongful acts in driving while intoxicated and causing an accident; because decedent could no longer be punished or deterred for whatever "egregiously wrongful acts" he may have committed before his death, plaintiff was precluded as a matter of law from asserting his claim for punitive damages. Harrell v. Bowen, 362 N.C. 142, 655 S.E.2d 350 (2008).

G.S. 1D-26 does not infer an obvious intent to have courts read "and" as a disjunctive in G.S. 1D-1, which governs all punitive damages claims; claims for punitive damages cannot be asserted against a decedent's estate on the basis of the decedent's alleged egregiously wrongful acts because a decedent cannot be punished or deterred for whatever egregiously wrongful act she may have committed before his death. State v. Moncree, 188 N.C. App. 221, 655 S.E.2d 464 (2008).

Evidence supported an award of punitive damages in the amount of $50,000 because (1) a debtor's conduct when it moved an auto dealership's vehicles without authorization was willful and wanton; (2) an officer of the debtor participated in and condoned the conduct; (3) the debtor set out to deliberately damage the dealership's property as the dealership's operators were caring for their ailing and elderly father; (4) the testimony of the debtor's employees clearly established that the debtor was aware that its conduct was inflicting serious harm as it was occurring; (5) the clear indifference of the debtor's directors regarding the continuing damage to the dealership's property resulting from the debtor's willful and wanton conduct was exceptional; and (6) the dealership was entitled to compensatory damages in the amount of $372,489. In re Brokers, Inc., 407 B.R. 693 (Bankr. M.D.N.C. 2009).

Discharge was denied under 11 U.S.C.S. § 727(a)(2), (4), and (6) where a debtor impersonated a real estate agent and lawyer in connection with an attempt to obtain money for his personal benefit through a sale of his condominium. Based on the uncertainty regarding whether the condominium was the debtor's residence, the court could not make a determination as to whether the trustee was eligible for treble damages under the Unfair and Deceptive Trade Practices Act, G.S. 75-1.1, but because of the particularly egregious nature of the debtor's acts, as well as the extended duration of his conduct, the trustee, in addition to actual damages, was awarded $10,000 in punitive damages under G.S. 1D-1, as he established that the debtor committed fraud, an aggravating factor under G.S. 1D-15, by clear and convincing evidence. Warren v. Coats (In re Coats), 435 B.R. 915 (Bankr. E.D.N.C. 2010).

Accident victim, who was injured when the vehicle in which she was riding was struck in the rear by a bus, was not entitled to punitive damages, under G.S. 1D-1 and 1D-15, because the victim's allegations that the bus driver fell asleep at the wheel were insufficient to show willful or wanton conduct by the driver under G.S. 1D-5. George v. Greyhound Lines, Inc., 210 N.C. App. 388, 708 S.E.2d 201 (2011).

Health care providers in a wrongful death and medical malpractice action were entitled to a directed verdict on the issue of punitive damages because the personal representative of the decedent's estate failed to present any evidence tending to show that a health care provider's decision to prescribe a particular medication to the decedent before the decedent's death was willful or wanton to warrant submission of punitive damages to the jury. Clarke v. Mikhail, 243 N.C. App. 677, 779 S.E.2d 150 (2015).

Applied in Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Cited in Food Lion, Inc. v. Capital Cities/ABC, Inc., 984 F. Supp. 923 (M.D.N.C. 1997); Ward v. Beaton, 141 N.C. App. 44, 539 S.E.2d 30 (2000), cert denied, 353 N.C. 398, 547 S.E.2d 431 (2001); Nguyen v. Taylor, 219 N.C. App. 1, 723 S.E.2d 551 (2012).

§ 1D-5. Definitions.

As used in this Chapter:

"Claimant" means a party, including a plaintiff, counterclaimant, cross-claimant, or third-party plaintiff, seeking recovery of punitive damages. In a claim for relief in which a party seeks recovery of punitive damages related to injury to another person, damage to the property of another person, death of another person, or other harm to another person, "claimant" includes any party seeking recovery of punitive damages.
"Compensatory damages" includes nominal damages.
"Defendant" means a party, including a counterdefendant, cross-defendant, or third-party defendant, from whom a claimant seeks relief with respect to punitive damages.
"Fraud" does not include constructive fraud unless an element of intent is present.
"Malice" means a sense of personal ill will toward the claimant that activated or incited the defendant to perform the act or undertake the conduct that resulted in harm to the claimant.
"Punitive damages" means extracompensatory damages awarded for the purposes set forth in G.S. 1D-1.
"Willful or wanton conduct" means the conscious and intentional disregard of and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm. "Willful or wanton conduct" means more than gross negligence.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

CASE NOTES

Abrogation. - To the extent that the enactment of G.S. 1D-5(7) signaled the abrogation of the common law definition of gross negligence, it did so only in the context of cases where a plaintiff seeks punitive damages. FDIC v. Rippy, 799 F.3d 301 (4th Cir. 2015).

"Willful or Wanton Conduct". - Where plaintiff workers were exposed to asbestos dust and fibers at defendant's polyester manufacturing plant, the jury returned verdicts in favor of plaintiffs, awarding them compensatory damages for personal injuries; however, defendant was entitled to a directed verdict on the issue of punitive damages because the plant industrial hygienist's destruction of a memo stating the asbestos exposure was cause for concern did not constitute willful and wanton conduct by defendant. Schenk v. HNA Holdings, Inc., 167 N.C. App. 47, 604 S.E.2d 689 (2004).

Directed verdict in favor of a manufacturing plant, a maintenance company, and its successor on the issue of punitive damages was upheld on appeal, because plaintiff workers failed to demonstrate any willful or wanton misconduct with regard to their exposure to asbestos when they removed insulation. The trial court's reduction of the workers' compensatory damages awards was also upheld on appeal, because the workers received prior workers' compensation claim settlements and prior third-party settlement amounts and were entitled to only one recovery for their asbestos exposure. Schenk v. HNA Holdings, Inc., 170 N.C. App. 555, 613 S.E.2d 503 (2005), cert. denied, 360 N.C. 177, 626 S.E.2d 649 (2005).

Wife of a decedent who was electrocuted on a stairwell at an amphitheater, which was operated by a subsidiary, could not recover punitive damages under G.S. 1D-5(7), 1D-15(c), and 28A-18-2 because evidence showing: (1) that the subsidiary had been informed prior to the accident that other patrons had been electrocuted on a stairwell; and (2) that the subsidiary took ineffective efforts to address electrical hazards did not demonstrate a wilful and wanton disregard for the safety of others. Faris v. Clear Channel Communs., Inc., - F. Supp. 2d - (W.D.N.C. Sept. 1, 2006).

In a medical malpractice suit, a trial court's entry of summary judgment in favor of the defendants as to the plaintiffs' punitive damages claims was upheld on appeal based on the plaintiffs' failure to forecast sufficient evidence to meet the standard for punitive damages set forth in G.S. 1D-15(a); the plaintiffs did not contend that either fraud or malice existed and relied upon the willful or wanton conduct aggravating factor, but their complaint and proofs only alleged reckless supervision on the part of the defendants. Foster v. Crandell, 181 N.C. App. 152, 638 S.E.2d 526 (2007), review denied, stay denied, 361 N.C. 567, 650 S.E.2d 602 (2007).

Borrowers proved sufficient facts establishing willful or wanton tortious activity by a bank subsidiary, pursuant to G.S. 1D-5(7), because the borrowers proved facts sufficient to show that the actions of the subsidiary were in conscious and intentional disregard of and indifference to the rights of the borrowers, and the subsidiary knew or should have known that by selling unlawful insurance with mortgage loans, its actions were reasonably likely to result in injury, damage, or other harm. Richardson v. Bank of Am., N.A., 182 N.C. App. 531, 643 S.E.2d 410 (2007), petition allowed as to additional issues 361 N.C. 569, 650 S.E.2d 439 (2007).

It was error to grant the employer's motion for judgment notwithstanding the verdict as to punitive damages because there was sufficient evidence of malice, willful and wanton conduct, and manager participation to support the jury's punitive damages award to a terminated part-time department store employee based on, inter alia, the store manager's threat to "mess up" the employee's full-time job at a bank. Scarborough v. Dillard's Inc., 188 N.C. App. 430, 655 S.E.2d 875 (2008).

G.S. 20-145 provided an exception to the speed limit rules for emergency vehicles. Inclusion of the word "wanton" in police pursuit cases was a shorthand reference to the "reckless disregard" limitation of G.S. 20-145 and did not refer to the definition of the word from a wholly unrelated statute - G.S. 1D-5(7), the punitive damages statute. Villepigue v. City of Danville, 190 N.C. App. 359, 661 S.E.2d 12 (2008), review denied, 362 N.C. 688, 671 S.E.2d 532 (2008).

In a mother's wrongful death action, the trial court erred in granting a police department and police officers summary judgment on the mother's punitive damages claim because she alleged evidence sufficient to show that there was a genuine issue of material fact as to whether the conduct of the department and the officers was willful or wanton; that evidence was sufficient to allow a jury to decide, under G.S. 1D-5(7), that the department and officers acted recklessly, manifesting a reckless indifference to the rights of the mother and her daughter and that they acted with indifference to the rights and safety of others, which they knew or should have known was reasonably likely to result in injury, damage, or other harm. Cockerham-Ellerbee v. Town of Jonesville, 190 N.C. App. 150, 660 S.E.2d 178 (2008), review denied, 362 N.C. 680, 669 S.E.2d 745 (2008). See Editor's note under G.S. 50B-4.1, quoting Session Laws 2009-389, s. 1, as to the holding in this case.

Although the corporation contended that it could not be held liable for punitive damages under G.S. 1D-15(c), it was not a case where the corporation's liability for punitive damages was based solely on vicarious liability; the assistant manager testified that in his interaction with the patrons, he was simply following the corporation's policy of completing the incident report form before investigating the nature of the incident. The corporation claimed that there was nothing wicked or needless about preparing a report that memorialized the facts of an incident that may be the subject of litigation, but this characterization of the policy failed to apply G.S. 1D-5(7)'s definition of willful or wanton conduct; a reasonable jury could disagree with the corporation's characterization of its policy and conclude to the contrary that the policy recklessly disregarded customers' safety and well-being in order to begin the process of protecting the corporation against potential litigation. Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009).

Trial court did not err in denying a grantee's motion for directed verdict or judgment notwithstanding the verdict on the issue of whether a property owner was entitled to punitive damages because nominal damages were recoverable for the loss of the owner's personal property as a matter of law, and her punitive damages award could be properly supported by an award of nominal damages standing alone; by purposely entering the owner's property, pillaging her assets, and then removing or eradicating every one of her personal possessions located at the property, the grantee, at the very least, showed a conscious and intentional disregard of and indifference to the rights and safety of others under G.S. 1D-5(7), and the jury's finding that the grantee's conversion was accompanied by an aggravating factor was supported by clear and convincing evidence. Mace v. Pyatt, 203 N.C. App. 245, 691 S.E.2d 81 (2010), review denied 705 S.E.2d 354, 2010 N.C. LEXIS 1014 (2010).

Chapter 7 debtor's former business partner was awarded summary judgment on her claim that a judgment she obtained against the debtor in the North Carolina Business Court was nondischargeable under 11 U.S.C.S. § 523 because the debtor willfully and maliciously injured the partner when she engaged in self-dealing and withdrew money from a business they owned; the North Carolina court's determination that the partner was entitled to recover punitive damages because the debtor engaged in "willful and wanton conduct," as that term was defined in G.S. 1D-5, that injured the partner and the business, was sufficient to show that the debtor acted "willfully" and "maliciously" for purposes of applying § 523. Cobham v. Cobham, 528 B.R. 283 (Bankr. E.D.N.C. 2015).

In a data company's action against a competitor that hired its former employee, the court upheld the jury verdict for the plaintiff because punitive damages for an unfair trade practice were warranted because of willful or wanton conduct in connection with an unjustified interference with an employment contract and not due to misappropriation of trade secrets. Legacy Data Access, LLC v. Mediquant, Inc., - F. Supp. 2d - (W.D.N.C. Dec. 4, 2017).

Plaintiffs were entitled to punitive damages in their medical malpractice suit against defendants (D), including a skilled nursing facility (SNF), as D engaged in willful or wanton conduct by: (1) intentionally failing to follow federal and state staffing laws; (2) intentionally violating the SNF's policy regarding sitters; (3) intentionally failing to monitor oxygen levels or to provide continuous monitoring of alarms; and (4) intentionally failing to have necessary bedside supplies in a vent unit. D knew, as it had been repeatedly told, that the failure to provide minimum staffing and supplies was reasonably likely to result in patient injury or death, yet they deliberately continued to disregard their duties. Vandevender v. Blue Ridge of Raleigh, LLC, - F.3d - (4th Cir. Aug. 2, 2018), modified, 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018). (But see 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018)) for modification of damage award).

Complaint Adequately Stated Claim for Punitive Damages. - Author sufficiently pled that the singer acted with "willful and wanton" conduct and participated in the alleged battery, where the author's complaint alleged that the author suffered a battery when the singer's body guard, at the direction of the singer, grabbed the author's arm and forced the author out of the chair next to the singer without justification. Holleman v. Aiken, 193 N.C. App. 484, 668 S.E.2d 579 (2008).

Plaintiff alleged sufficient factual matter with respect to a willful and wanton conduct claim to survive defendants' motion for judgment on the pleadings after the plaintiff alleged that the defendants whited out the name of the seller and substituted plaintiff's forged signature, which permitted the inference that the conduct was done consciously and intentionally in disregard of, and with indifference to, the rights of others as required under North Carolina law. Rodgers v. Preferred Carolinas Realty, Inc. (In re Rodgers), - F. Supp. 2d - (E.D.N.C. June 24, 2014).

Officer was not entitled to summary judgment dismissing a citizen's punitive damages claim in an action alleging excessive force because: (1) the citizen alleged sufficiently egregious conduct to find the officer's willful and intentionally or recklessly injurious conduct, and (2) the officer did not show the citizen could not support the citizen's claims. Hart v. Brienza, 246 N.C. App. 426, 784 S.E.2d 211, review denied, 793 S.E.2d 223, 2016 N.C. LEXIS 841 (2016).

In a suit arising out of an accident between two tractor trailers, plaintiffs' gross negligence and punitive damages claims against defendant driver and defendant operator survived summary judgment because, inter alia, questions of material fact existed as to whether the operator knew or should have known about defendant driver's hours of service violations, whether the operator condoned defendant driver's conduct by failing to ensure compliance with the regulations, and whether the operator participated in or condoned defendant driver's conduct by failing to adequately inspect and maintain the truck. Pracht v. Saga Freight Logistics, LLC, - F. Supp. 2d - (W.D.N.C. Oct. 9, 2015).

Intent to Commit Constructive Fraud Found. - Punitive damages were properly awarded because the evidence was sufficient to establish the intent to commit constructive fraud under G.S. 1D-5(4) as the trustee refused to distribute the assets of the trusts, despite the plain language of the trusts requiring distribution upon an individual's death, for reasons unrelated to the trusts and the trustee continued to receive trustee fees during the period in which the trustee served as a trustee and, thus, benefitted from the failure to distribute the trust assets. Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626 (2008).

Damages Claim Dismissed When No Fraud. - Condominium unit owner's claim for punitive damages was properly dismissed because no evidence of actual fraud was presented. Ironman Med. Props., LLC v. Chodri, - N.C. App. - , 836 S.E.2d 682 (2019).

Sufficient Evidence to Support Punitive Damages. - Punitive damages award was supported by sufficient evidence where the driver was involved in multiple preventable accidents, and that other than counseling or an interview with the driver, there was no intervention on the part of defendants in terms of assessing what the problems were or trying to correct behavioral deficiencies that seemed apparent because all the accidents were preventable; further, an expert opined, based on his training and experience, that due to the driver's history of preventable accidents, there was a higher risk and a higher probability that he would be involved in additional accidents and so it was foreseeable that the driver would be involved in another collision. Springs v. City of Charlotte, 222 N.C. App. 132, 730 S.E.2d 803 (2012).

Applied in Austin v. Bald II, L.L.C., 189 N.C. App. 338, 658 S.E.2d 1 (2008); Scarborough v. Dillard's, Inc., 363 N.C. 715, 693 S.E.2d 640 (2009), cert. denied 131 S. Ct. 2456, 2011 U.S. LEXIS 3769, 179 L. Ed. 2d 1211 (U.S. 2011), cert. denied 563 U.S. 988, 131 S. Ct. 2456, 2011 U.S. LEXIS 3769 (U.S. 2011).

Cited in Collins v. St. George Physical Therapy, 141 N.C. App. 82, 539 S.E.2d 356 (2000); Penn Millers Ins. Co. v. United States, 472 F. Supp. 2d 705 (E.D.N.C. 2007); Bogovich v. Embassy Club of Sedgefield, Inc., 211 N.C. App. 1, 712 S.E.2d 257 (2011); LeCann v. Cobham (In re Cobham), 551 B.R. 181 (E.D.N.C. 2015), aff'd, 2016 U.S. App. LEXIS 18523 (2016).

§ 1D-10. Scope of the Chapter.

This Chapter applies to every claim for punitive damages, regardless of whether the claim for relief is based on a statutory or a common-law right of action or based in equity. In an action subject to this Chapter, in whole or in part, the provisions of this Chapter prevail over any other law to the contrary.

History

(1995, c. 514, s. 1.)

CASE NOTES

Construction With Other Laws. - Although punitive damages claims were not expressly excepted by G.S. 28A-18-1, the General Assembly had mandated that N.C. Gen. Stat. ch. 1D prevailed over any other law to the contrary with respect to such claims; since G.S. 1D-1 precluded plaintiff from asserting a claim for punitive damages against a decedent's estate on the basis of the decedent's alleged egregiously wrongful acts, plaintiff could not rely upon G.S. 28A-18-1 to procure a different result. Harrell v. Bowen, 362 N.C. 142, 655 S.E.2d 350 (2008).

Punitive Damages Held Not Available. - Although punitive damages claims were not expressly excepted by G.S. 28A-18-1, the General Assembly had mandated that N.C. Gen. Stat. ch. 1D prevailed over any other law to the contrary with respect to such claims; since G.S. 1D-1 precluded plaintiff from asserting a claim for punitive damages against a decedent's estate on the basis of the decedent's alleged egregiously wrongful acts, plaintiff could not rely upon G.S. 28A-18-1 to procure a different result. Harrell v. Bowen, 362 N.C. 142, 655 S.E.2d 350 (2008).

Claim for punitive damages cannot be asserted against a decedent's estate on the basis of the decedent's alleged egregiously wrongful acts because a decedent cannot be punished or deterred for whatever egregiously wrongful acts he may have committed before his death. Harrell v. Bowen, 362 N.C. 142, 655 S.E.2d 350 (2008).

§ 1D-15. Standards for recovery of punitive damages.

Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
1. Fraud.
2. Malice.
3. Willful or wanton conduct.
The claimant must prove the existence of an aggravating factor by clear and convincing evidence.
Punitive damages shall not be awarded against a person solely on the basis of vicarious liability for the acts or omissions of another. Punitive damages may be awarded against a person only if that person participated in the conduct constituting the aggravating factor giving rise to the punitive damages, or if, in the case of a corporation, the officers, directors, or managers of the corporation participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.
Punitive damages shall not be awarded against a person solely for breach of contract.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

For article, "Judicial Boilerplate Language as Torts Decisional Litany: Four Problem Areas in North Carolina," see 18 Campbell L. Rev. 359 (1996).

For article, "Punitive Damages in an Era of Consolidated Power,” see 98 N.C.L. Rev. 315 (2020).

CASE NOTES

Pleading with Particularity Not Required. - Plaintiff's alienation of affection complaint, which averred both malice and willful and wanton conduct as the relevant aggravating factors under this section, was not required to state with particularity the circumstances underlying these factors. Ward v. Beaton, 141 N.C. App. 44, 539 S.E.2d 30 (2000), cert denied, 353 N.C. 398, 547 S.E.2d 431 (2001).

Applicability of Section. - G.S. 1D-15 is not to be applied retroactively and, therefore, applies only to cases arising after January 1, 1996. Rhone-Poulenc Agro SA v. DeKalb Genetics Corp., 272 F.3d 1335 (4th Cir. 2001).

Because the corporation and the stockholder carried their burden of showing there were no genuine issues of material fact and that they were entitled to judgment in their favor as a matter of law as to the former employee's underlying claims for fraud, constructive fraud, negligent misrepresentation, and violating the North Carolina Securities Act (G.S. 78A-56(b) concerning the employee's sale of stock to the stockholder, summary judgment was also proper as to the employee's claim for punitive damages. Sullivan v. Mebane Packaging Group, Inc., 158 N.C. App. 19, 581 S.E.2d 452 (2003), cert. denied, 357 N.C. 511, 588 S.E.2d 473 (2003).

When taxpayers sued county commissioners for entering into a contract that benefitted one of the commissioners, the taxpayers, under their punitive damages claim, had to prove by clear and convincing evidence one or more aggravating factors such as fraud, malice, or willful or wanton conduct. Gibbs v. Mayo, 162 N.C. App. 549, 591 S.E.2d 905, cert. denied, 358 N.C. 543, 599 S.E.2d 45 (2004).

On interlocutory appeal, prisoner's Eighth Amendment Bivens claim for alleged inadequate medical care did not extend to defendants, who were individual employees of a privately operated prison, because the actions of the employees were not fairly attributable to the federal government and because the prisoner had adequate remedies under state law, G. S. 1D-15, for his alleged injuries. Holly v. Scott, 434 F.3d 287 (4th Cir. 2006), cert. denied, - U.S. - , 126 S. Ct. 2333, 164 L. Ed. 2d 849 (2006).

There was no basis under North Carolina law to support a finding that punitive damages could not be awarded against a corporation when the current shareholders of that corporation were different from the shareholder in existence at the time of alleged wrongdoing; punitive damages would punish and deter the corporate entity. In re Brokers, Inc., - Bankr. - (Bankr. M.D.N.C. Mar. 4, 2008).

Plaintiff contended that defendants intentionally breached the consent judgment, but this did not constitute a separate tort and thus the trial court did not err by granting summary judgment in favor of defendants with respect to plaintiff's punitive damages claim. Scigrip, Inc. v. Samuel B. Osae & Scott Bader, - N.C. - , - S.E.2d - (Feb. 28, 2019).

Consideration of Factors as to Each Plaintiff. - In the absence of some legislative directive, it is assumed that the trier of fact should, as it did at common law, consider the factors set forth in G.S. 1D-15(a) as to each plaintiff's cause of action and not as to each defendant; it follows that, like G.S. 1D-15(a), G.S. 1D-25(b) applies to the individual jury verdict of each plaintiff. Thus, where a jury awarded compensatory and punitive damages, which exceeded the statutory cap of G.S. 1D-25(b), to two plaintiffs against one defendant, the trial court properly reduced the individual awards to both plaintiffs and entered judgment against defendant in the amount of the statutory cap for each plaintiff. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Complaint Adequately Stated Claim for Punitive Damages. - Except for plaintiff borrower's negligent misrepresentation claim, the complaint specifically alleged that defendant attorney engaged in the relevant conduct and that he acted with reckless and wanton disregard for the borrower's rights and interests; thus, the complaint adequately stated a claim for punitive damages against the attorney. Higgins v. Spence & Spence, - F. Supp. 2d - (E.D.N.C. Feb. 21, 2008).

Because the amended complaint adequately stated a claim for punitive damages against defendant attorney as to plaintiff borrower's negligence, breach of fiduciary duty, constructive fraud, and legal malpractice claims, a valid claim for punitive damages against defedant law firm (the attorney was an officer, director, or manager of the law firm at the time of the alleged conduct) was also stated. Higgins v. Spence & Spence, - F. Supp. 2d - (E.D.N.C. Feb. 21, 2008).

Claim for punitive damages against a singer, arising from an alleged battery, survived the author's motion to dismiss for failure to state a claim under N.C. R. Civ. P. 12(b)(6), because the author sufficiently pled that the singer acted with "willful and wanton" conduct and participated in the conduct constituting the aggravating factor giving rise to the punitive damages; the author's complaint alleged that the author suffered a battery when the singer's body guard grabbed the author's arm and forced the author out of the chair next to the singer without justification. Holleman v. Aiken, 193 N.C. App. 484, 668 S.E.2d 579 (2008).

Contrary to the corporation's argument, the patron was not required to prove that the willful and wanton conduct caused the patron's injuries, but rather was required to prove a connection between that conduct and her injuries and the evidence was sufficient to show a connection between the failure to investigate what the patron drank and her injuries. A jury could also find a connection between the evidence of the patron's emotional injuries and the assistant manager's deliberate disregard of the need to obtain information regarding what the patron swallowed. Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009).

Although the assistant manager knew the patron ingested some unknown substance that had made her sick, he refused to find out what she had actually been served or the first aid protocol for that substance before completing the corporation's incident report form; moreover, that form was not designed to provide assistance to the customer, but was focused on anticipating litigation. A jury could reasonably find from the evidence that the assistant manager chose to give preference to protecting the corporation from possible litigation over providing assistance to the patron who had been served a possibly toxic substance; the jury could then further conclude that the assistant manager acted with conscious and intentional disregard of and indifference to the patron's rights and safety, thus supporting a finding of willful or wanton conduct. Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009).

In a pharmaceutical company's suit against a developer for breach of contract, unjust enrichment, and other claims, the developer's motion to dismiss for failure to state a claim was granted, in part, with regard to the company seeking punitive damages because punitive damages were not available under the applicable North Carolina law for breach of contract claims but the company was permitted to proceed on its claim for punitive damages against the developer on the tort claims asserted but it would have to prove the existence of an aggravating factor, namely, fraud, malice, or willful or wanton conduct, by clear and convincing evidence in order to recover punitive damages. River's Edge Pharms., LLC v. Gorbec Pharm. Servs., - F. Supp. 2d - (M.D.N.C. Apr. 25, 2012).

Because an employee stated tort claims for malicious prosecution, abuse of process, and unfair and deceptive trade practices sufficient to survive an insurer's motion to dismiss, his allegations of fraudulent, malicious, and willful and wanton conduct on the part of the insurer in perpetrating those acts were sufficient to allege punitive damages. Seguro-Suarez v. Key Risk Ins. Co., 261 N.C. App. 200, 819 S.E.2d 741 (2018).

Petrochemical producer's punitive damages claim against a railway terminal manager and others survived a motion to dismiss where the producer had sufficiently alleged that they were grossly negligent, which required willful or wanton conduct. Total Petrochemicals & Ref. USA, Inc. v. RSI Leasing, Inc., - F. Supp. 2d - (W.D.N.C. Nov. 19, 2020).

The aggravating factor required under this section was sufficiently alleged in complaint to support a claim for punitive damages where plaintiffs former jurors' complaint sufficiently alleged a claim for intentional infliction of emotional distress. Burgess v. Busby, 142 N.C. App. 393, 544 S.E.2d 4 (2001).

Punitive Damages Warranted in Alienation of Affections Where Sexual Relations Occurred - Punitive damages award against a boyfriend in an alienation of affections claim was warranted pursuant to this section where it was shown that the boyfriend had sexual relations on at least two occasions with the husband's wife; additionally, the award was not deemed excessive where it did not go beyond the limits established by G.S. 1D-25(b), and accordingly, the trial court's denial of the boyfriend's motion for a new trial on that issue, pursuant to G.S. 1A-1, Rule 59, was proper. Oddo v. Presser, 158 N.C. App. 360, 581 S.E.2d 123 (2003).

Punitive Damage Award with Comparative Ratio Greater Than Three. - G.S. 1D-15 and G.S. 1D-25, when taken together, imply that a punitive damage award with a comparative ratio greater than three, based upon a showing of fraud by only a preponderance of the evidence, will not be upheld under North Carolina law. Rhone-Poulenc Agro SA v. DeKalb Genetics Corp., 272 F.3d 1335 (4th Cir. 2001).

Allegations Stating Claim for Punitive Damages Sufficient to Survive Motion to Dismiss. - Claimant sufficiently stated a claim for punitive damages by alleging that a debtor, through its agents, took the claimant's personal property without the claimant's knowledge off of the land leased by the claimant from the debtor, and caused damage to the personal property; the allegations contended that the debtor, with the participation and knowledge of the debtor's officers and directors, acted with willful, wanton, and intentional disregard of the claimant's rights. In re Brokers, Inc., - Bankr. - (Bankr. M.D.N.C. Dec. 3, 2007).

Liability of Employer for Punitive Damages. - Because an accident victim offered an insufficient forecast of evidence that a bus driver engaged in willful or wanton conduct, there was an insufficient forecast of evidence, under G.S. 1D-15(c), that the bus company which employed the driver participated in or condoned the driver's alleged willful or wanton conduct. George v. Greyhound Lines, Inc., 210 N.C. App. 388, 708 S.E.2d 201 (2011).

Plaintiffs were entitled to punitive damages from defendants (D), a skilled nursing facility (SNF), its owner and its manager, as the SNF's administrator, who was jointly employed by defendants, participated in the decisions to cut staffing and supplies that were alleged to constitute willful or wanton conduct. Vandevender v. Blue Ridge of Raleigh, LLC, - F.3d - (4th Cir. Aug. 2, 2018), modified, 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018). (But see 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018)) for modification of damage award).

No Award of Punitive Damages Without Compensatory Damages. - Plaintiff was not entitled to punitive damages as a matter of law under G.S. 1D-15(a) because the trial court at summary judgment properly found against the plaintiff on the plaintiff's claim of tortious interference with contract. Therefore, because the plaintiff was not entitled to compensatory damages, the plaintiff was also not entitled to punitive damages. Sellers v. Morton, 191 N.C. App. 75, 661 S.E.2d 915 (2008).

As a gun purchaser's claims were all properly resolved by a grant of summary judgment to the gun merchant due to a failure to establish the elements thereof, the claim for punitive damages also failed pursuant to G.S. 1D-15. Pittman v. Hyatt Coin & Gun, Inc., 224 N.C. App. 326, 735 S.E.2d 856 (2012).

When mortgagors sued mortgagees for not accepting the mortgagors' late payments and foreclosing, the mortgagors' punitive damages claim failed because (1) the mortgagors had to prove the mortgagees were liable for compensatory damages, and (2) the mortgagors could not meet this requirement, as the mortgagors' other claims were properly dismissed. Funderburk v. JPMorgan Chase Bank, N.A., 241 N.C. App. 415, 775 S.E.2d 1 (2015).

Partnership's punitive damages claims failed because the partnership's underlying claims failed. BDM Invs. v. Lenhil, Inc., - N.C. App. - , 826 S.E.2d 746 (2019).

Evidence Sufficient. - Punitive damages were justified where the plaintiff presented evidence that the defendant and plaintiff's husband "had sex" at least two times and where the defendant on several occasions appeared at the marital home. Ward v. Beaton, 141 N.C. App. 44, 539 S.E.2d 30 (2000), cert denied, 353 N.C. 398, 547 S.E.2d 431 (2001).

Defendant was denied partial summary judgment on plaintiffs' claim for punitive damages, where, viewed in a light most favorable to plaintiffs, the evidence tended to show defendant drove a front end loader with his field of vision completely obstructed when he should have known two trucks were in front of him; in this light, the evidence was sufficient to support a finding that this defendant acted with conscious and intentional disregard of and indifference to the rights and safety of others. Abel v. Carolina Stalite Co., Ltd. P'ship, - F. Supp. 2d - (M.D.N.C. Mar. 18, 2004).

Corporation was denied partial summary judgment on two individuals' claim for punitive damages, where, viewed in a light most favorable to the individuals, the evidence was sufficient to support a finding that the corporation acted with conscious and intentional disregard of and indifference to the rights and safety of others; the individuals had contended that the corporation intentionally and repetitively disregarded several Federal Mine Safety and Health Act of 1977 (FMSHA), 30 U.S.C.S. §§ 801 et seq., health and safety regulations and that the corporation knew or reasonably should have known that its disregard of FMSHA health and safety regulations would result in injury. Abel v. Carolina Stalite Co., Ltd. P'ship, - F. Supp. 2d - (M.D.N.C. Mar. 18, 2004).

Because the lessees presented evidence of the lessors' willful, wanton, and malicious conduct in breaching the parties' lease/purchase agreement, violating a temporary restraining order and preliminary injunction, and converting the lessees' property, a court properly denied the lessors' motion for a directed verdict on the issue of punitive damages under G.S. 1D-15(a). Zubaidi v. Earl L. Pickett Enters., 164 N.C. App. 107, 595 S.E.2d 190 (2004).

Trial court did not err in denying two corporations' motion for judgment notwithstanding the verdict as to an award of punitive damages to a patron beaten by bouncers employed by the corporations during the scope of their employment where: (1) the operations manager directed the bouncers' to check on the patron, (2) he condoned the attack, and (3) he did not intervene in the beating. Wallace v. M, M & R, Inc., 165 N.C. App. 827, 600 S.E.2d 514 (2004).

Borrowers established willful or wanton tortious activity by a bank subsidiary, pursuant to G.S. 1D-5(7), because the borrowers proved facts sufficient to show that the actions of the subsidiary were in conscious and intentional disregard of and indifference to the rights of the borrowers; furthermore, the subsidiary knew or should have known that by selling unlawful insurance with mortgage loans, its actions were reasonably likely to result in injury, damage, or other harm. Richardson v. Bank of Am., N.A., 182 N.C. App. 531, 643 S.E.2d 410 (2007), petition allowed as to additional issues 361 N.C. 569, 650 S.E.2d 439 (2007).

Because an adjacent property owner tendered evidence of pecuniary loss and personal discomfort related to an apartment owner's erection of a spite fence, the evidence presented was sufficient to meet the elements necessary to require the submission of the punitive damages to the jury pursuant to G.S. 1D-15(b). Austin v. Bald II, L.L.C., 189 N.C. App. 338, 658 S.E.2d 1 (2008).

In a mother's wrongful death action, the trial court erred in granting a police department and police officers summary judgment on the mother's punitive damages claim because she alleged evidence sufficient to show that there was a genuine issue of material fact as to whether the conduct of the department and the officers was willful or wanton; the mother outlined incidents or events which tended to establish the conscious and intentional disregard of and indifference to the rights and safety of the mother and her family. Cockerham-Ellerbee v. Town of Jonesville, 190 N.C. App. 150, 660 S.E.2d 178 (2008), review denied, 362 N.C. 680, 669 S.E.2d 745 (2008). See Editor's note under G.S. 50B-4.1, quoting Session Laws 2009-389, s. 1, as to the holding in this case.

Punitive damages were properly awarded because compensatory damages were shown with reasonable certainty and the evidence was sufficient to establish intent, fraud, malice, and willful and wanton conduct for punitive damages under G.S. 1D-15(a) as the trustee refused to distribute the assets of the trusts, despite the plain language of the trusts requiring distribution upon an individual's death, for reasons unrelated to the trusts and the trustee continued to receive trustee fees during the period in which the trustee served as a trustee and, thus, benefitted from the failure to distribute the trust assets. Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626 (2008).

Jury's punitive damages award was proper under G.S. 1D-15(a) as clear and convincing evidence indicated defendant's managers intentionally concealed the risks of osteonecrosis of the jaw from medical professionals. Fussman v. Novartis Pharms. Corp., - F. Supp. 2d - (M.D.N.C. Nov. 21, 2011), aff'd, 2013 U.S. App. LEXIS 2784 (4th Cir. N.C. 2013).

Punitive damages award was supported by sufficient evidence where the driver was involved in multiple preventable accidents, and that other than counseling or an interview with the driver, there was no intervention on the part of defendants in terms of assessing what the problems were or trying to correct behavioral deficiencies that seemed apparent because all the accidents were preventable; further, an expert opined, based on his training and experience, that due to the driver's history of preventable accidents, there was a higher risk and a higher probability that he would be involved in additional accidents and so it was foreseeable that the driver would be involved in another collision. Springs v. City of Charlotte, 222 N.C. App. 132, 730 S.E.2d 803 (2012).

A bankruptcy debtor's misappropriation of funds from a creditor's limited liability company to pay personal debts, when the debtor only had authority to use the funds to maintain real property held by the LLC, made the debtor liable for punitive damages since the debtor stole the LLC's money, repeatedly deceived the creditor to conceal the debtor's actions both before and after the theft, and engaged in such conduct maliciously, willfully, and wantonly. Day Care-Sam Furr, LLC v. McKinnell (In re Ross), 478 B.R. 715 (Bankr. W.D.N.C. 2012).

In a software licensor's suit against a licensee for fraudulent inducement and breach of the license agreement by using the licensor's software to reverse engineer an identical competing software, which the licensee then sold the licensor's customers, a jury's verdict for damages of $26,376,635 and $3,000,000 in punitive damages was upheld. SAS Inst., Inc. v. World Programming Ltd., - F. Supp. 2d - (E.D.N.C. June 17, 2016).

Defendant was not entitled to a directed verdict or judgment notwithstanding the verdict as to a punitive damages claim in a suit alleging battery because clear and convincing evidence showed defendant's actions were wanton and malicious. Simmons v. Wiles, - N.C. App. - , 845 S.E.2d 112 (2020), review dismissed, as moot, 376 N.C. 546, 851 S.E.2d 617, 2020 N.C. LEXIS 1163 (2020); review denied, 376 N.C. 546, 851 S.E.2d 625, 2020 N.C. LEXIS 1165 (2020).

Evidence Insufficient. - The defendant-physical therapist was entitled to a directed verdict on the punitive damages claim based on willful or wanton negligence where the evidence indicated that, although the defendant may have been negligent in deviating from customary standards in caring for an exercise machine, the evidence fell short of creating a reasonable inference that defendant recklessly disregarded the plaintiff's rights or safety. Collins v. St. George Physical Therapy, 141 N.C. App. 82, 539 S.E.2d 356 (2000).

Where plaintiff workers were exposed to asbestos dust and fibers at defendant's polyester manufacturing plant, the jury returned verdicts in favor of plaintiffs, awarding them compensatory damages for personal injuries; however, defendant was entitled to a directed verdict on the issue of punitive damages because the plant industrial hygienist's destruction of a memo stating the asbestos exposure was cause for concern did not constitute willful and wanton conduct by defendant. Schenk v. HNA Holdings, Inc., 167 N.C. App. 47, 604 S.E.2d 689 (2004).

Where plaintiff's complaint did not allege any facts that would have tended to show fraud, malice, or willful or wanton conduct in relation to the alleged breach of fiduciary duty, the omission strongly suggested that plaintiff's claim for punitive damages was without basis and had been asserted solely to confer jurisdiction on the court. Southstar Funding, L.L.C. v. Warren, Perry & Anthony, P.L.L.C., 445 F. Supp. 2d 583 (E.D.N.C. 2006).

Borrower's 's claim for punitive damages was inappropriate for several reasons: because the borrower was not entitled to compensatory damages, her claim for punitive damages failed and she did not state a sufficient claim for an independent tort to accompany her breach of contract allegations; in addition, the borrower did not expressly state that any of the lender's actions included a heightened level of fault for which to allow punitive damages, nor did the borrower allege any facts showing that the lender's conduct rose to a fraudulent, malicious, or willful or wanton level. Booker v. Wash. Mut. Bank, F.A., - F. Supp. 2d - (M.D.N.C. Feb. 9, 2007).

Defendants were entitled to summary judgment as to plaintiff's punitive damages claim because defendants' evidence tended to show they moved to withdraw from representation of plaintiff due to ill health and defendants asserted a proper basis and utilized proper procedures mandated by the Rules of Professional Conduct and the Rules for Superior Court Practice to move to withdraw; thus, the evidence failed to raise an inference of the existence of any of the three aggravating factors necessary to support a claim for punitive damages under G.S. 1D-15(a). Wilkins v. Safran, 185 N.C. App. 668, 649 S.E.2d 658 (2007).

Because the appellate court affirmed the trial court that the sole remaining issue for trial was breach of contract, the trial court correctly dismissed the punitive damages claim pursuant to G.S. 1D-15. James R. Carcano v. JBSS, LLC, 200 N.C. App. 162, 684 S.E.2d 41 (2009).

Judgment notwithstanding the verdict was properly entered in an employer's favor as to punitive damages in an employee's malicious prosecution action because the employee did not produce sufficient evidence from which the jury could have reasonably found one or more of the statutory aggravating factors required by G.S. 1D-15(a) by clear and convincing evidence. Scarborough v. Dillard's, Inc., 363 N.C. 715, 693 S.E.2d 640 (2009), cert. denied 131 S. Ct. 2456, 2011 U.S. LEXIS 3769, 179 L. Ed. 2d 1211 (U.S. 2011), cert. denied 563 U.S. 988, 131 S. Ct. 2456, 2011 U.S. LEXIS 3769 (U.S. 2011).

Condominium unit owner's claim for punitive damages was properly dismissed because no evidence of actual fraud was presented. Ironman Med. Props., LLC v. Chodri, - N.C. App. - , 836 S.E.2d 682 (2019).

Where a former employee, who prevailed in his Title VII sexual harassment lawsuit, was not entitled to punitive damages even though he established that manager-level employees negligently failed to adequately respond to his harassment complaints, because he failed to show that managerial employees engaged in intentionally discriminatory practices themselves with malice or reckless indifference, the employee also was not entitled to punitive damages under North Carolina law because clear and convincing evidence did not show that manager-level employees consciously disregarded the employee's rights.

Regarding Allegation of Fraudulent Misrepresentation. - Regarding a manufacturer's request for punitive damages from a seller and its president arising from the alleged breach of an agreement executed by the parties, the seller's motion for partial summary judgment as to the fraudulent misrepresentation claim and request for punitive damages under G.S. 1D-15(d) was denied because the manufacturer showed that the seller and the president knowingly and willfully concealed any breaches of the agreement so that the manufacturer, relying on the misrepresentations, would continue to offer the seller product discounts and that the president knew of the potentially breaching purchases; hence, a jury, crediting such evidence, could reasonably have found that the seller and the president committed fraudulent misrepresentation. Interstate Narrow Fabrics, Inc. v. Century USA, Inc., 218 F.R.D. 455 (M.D.N.C. 2003).

Under this section, enacted in 1995, punitive damages may be awarded only if a plaintiff can prove willful or wanton conduct which he failed to do, thus warranting a directed verdict for the defendant. McNeill v. Holloway, 141 N.C. App. 109, 539 S.E.2d 309 (2000).

Court denied an administratrix's Fed. R. Civ. P. 54(b) motion for reconsideration of the grant of summary judgment to a corporation on the administratrix's punitive damages claim, under G.S. 1D-15(c), in the administratrix's action against the corporation for the electrocution of a decedent at the corporation's amphitheater where no reasonable jury could find with clear and convincing proof that the corporation acted in a willful or wanton manner or ignored safety procedures and policies. Faris v. SFX Entm't, Inc., - F. Supp. 2d - (W.D.N.C. Dec. 12, 2006).

Discovery of Financial Information Where Prima Facie Showing Is Made. - Franchisees' motion to compel was granted in part, to the extent that they sought to compel three corporate officers to respond to an interrogatory by providing personal financial information about themselves, as: (1) the information was relevant because the franchisees had made a prima facie showing of their entitlement to punitive damages under G.S. 1D-15; (2) the officers were not required to produce documents under Fed. R. Civ. P. 33(d), in response to the franchisees' interrogatory; and (3) the production of the requested information, concerning the officers' financial assets, liabilities, and monthly income as of December 31, 2001, did not rise to the level of burden contemplated by Fed. R. Civ. P. 26(b)(2). Rich Food Servs. v. Rich Plan Corp., - F. Supp. 2d - (E.D.N.C. June 17, 2002).

Failure to Indicate that Aggravating Factor Was Established by Clear and Convincing Evidence. - In an action for damages by four police officers against a rapper, a record company, and others, the trial court's finding regarding the aggravating factor which supported an award of punitive damages failed to indicate that it was established by clear and convincing evidence, as required by G.S. 1D-15(b). Nguyen v. Taylor, 219 N.C. App. 1, 723 S.E.2d 551 (2012).

Contemplation of Damages Precluded. - Plaintiffs mischaracterized evidence they claimed was excluded in error, and regarding the company's ability to pay, certain questions were permitted, and regarding past similar conduct, certain objections to questions outside the scope were properly sustained; nevertheless, assuming arguendo the trial court erred in limiting testimony, the error was harmless given that directed verdicts were entered in favor of the company on the fraud claims and the jury never found the company liable, thereby precluding any contemplation of damages. Brissett v. First Mt. Vernon Indus. Loan Ass'n, 233 N.C. App. 241, 756 S.E.2d 798 (2014).

Punitive Damages Should Have Been Considered. - Trial court erred in failing to consider an award of punitive damages where it erroneously concluded that a shareholder had failed to prove actual fraud, and compensatory damages could have been awarded for the corporate officer's fraud and breach of fiduciary duty claims Seraph Garrison, LLC v. Garrison, 247 N.C. App. 115, - S.E.2d - (Apr. 19, 2016).

Punitive Damages Award Reversed. - Punitive damages award was reversed because after court reversed as to conversion claim, leaving sellers with only breach of contract claim, the punitive damages award had to be reversed pursuant to this statute. Legacy Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158 (4th Cir. 2018).

Applied in Phillips v. Rest. Mgmt. of Carolina, L.P., 146 N.C. App. 203, 552 S.E.2d 686 (2001); Compton v. Kirby, 157 N.C. App. 1, 577 S.E.2d 905 (2003); Hudgins v. Wagoner, 204 N.C. App. 480, 694 S.E.2d 436 (2010), review denied 706 S.E.2d 250, 2011 N.C. LEXIS 136 (2011); Bogovich v. Embassy Club of Sedgefield, Inc., 211 N.C. App. 1, 712 S.E.2d 257 (2011).

Cited in Stamm v. Salomon, 144 N.C. App. 672, 551 S.E.2d 152 (2001); Edens v. Estate of Streett, - F. Supp. 2d - (W.D.N.C. Nov. 30, 2001); Ausley v. Bishop, 150 N.C. App. 56, 564 S.E.2d 252 (2002); Shinn v. Greeness, 218 F.R.D. 478 (M.D.N.C. 2003); Eli Research Inc. v. United Communs. Group, LLC, 312 F. Supp. 2d 748 (M.D.N.C. 2004); Perkins v. Watson, - F. Supp. 2d - (M.D.N.C. June 3, 2005); Scarborough v. Dillard's, Inc., 179 N.C. App. 127, 632 S.E.2d 800 (2006); Snyder v. Learning Servs. Corp., 187 N.C. App. 480, 653 S.E.2d 548 (2007); Barringer v. Wake Forest Univ. Baptist Med. Ctr., 197 N.C. App. 238, 677 S.E.2d 465 (2009); Springs v. City of Charlotte, - N.C. App. - , 701 S.E.2d 700 (Nov. 16, 2010); Springs v. City of Charlotte, 209 N.C. App. 271, 704 S.E.2d 319 (2011); Shaw v. Goodyear Tire & Rubber Co., 225 N.C. App. 90, 737 S.E.2d 168 (2013), review denied 367 N.C. 204, 748 S.E.2d 323, 2013 N.C. LEXIS 1010 (2013); Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634 (2013); LeCann v. Cobham (In re Cobham), 551 B.R. 181 (E.D.N.C. 2015), aff'd, 2016 U.S. App. LEXIS 18523 (2016).

§ 1D-20. Election of extracompensatory remedies.

A claimant must elect, prior to judgment, between punitive damages and any other remedy pursuant to another statute that provides for multiple damages.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

§ 1D-25. Limitation of amount of recovery.

In all actions seeking an award of punitive damages, the trier of fact shall determine the amount of punitive damages separately from the amount of compensation for all other damages.
Punitive damages awarded against a defendant shall not exceed three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000), whichever is greater. If a trier of fact returns a verdict for punitive damages in excess of the maximum amount specified under this subsection, the trial court shall reduce the award and enter judgment for punitive damages in the maximum amount.
The provisions of subsection (b) of this section shall not be made known to the trier of fact through any means, including voir dire, the introduction into evidence, argument, or instructions to the jury.

History

(1995, c. 514, s. 1.)

Cross References. - As to cap on stay of execution bonds pending appeal with respect to noncompensatory damages, see G.S. 1-289(b).

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

For article, "Legislative Expansion of Judicial Bifurcation: North Carolina's Double-Edge Sword," see 36 Campbell L. Rev. 201 (2014).

CASE NOTES

Constitutionality - Separation of Powers. - G.S. 1D-25, which places a cap on punitive damages, did not unconstitutionally violate the principle of separation of powers, contrary to N.C. Const., Art. I, § 6, by exercising the power of remittitur because the cap on punitive damages is different from remittitur in that it requires an award to be limited after a proper jury trial, while remittitur is utilized only after a court has determined that a party has not received a fair and proper jury trial. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

G.S. 1D-25 does not operate as a "legislative remittitur" because, unlike remittitur, G.S. 1D-25 does not grant the General Assembly the authority to remit excessive awards on a case-by-case basis, but rather, by enacting G.S. 1D-25, the General Assembly has imposed a limit on the recovery of punitive damages in all cases; this function is wholly distinct from that within the trial court's authority to apply fixed laws to individual controversies, and thus, G.S. 1D-25 did not violate separation of powers principles under N.C. Const. art. I, § 6. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

G.S. 1D-25 does not represent an impermissible interference with the judiciary's constitutionally defined authority because the Constitution neither expressly nor implicitly empowers North Carolina courts to award punitive damages or to remit excessive awards thereof; rather, because punitive damages are awarded on grounds of public policy, G.S. 1D-25 is a modification of the common law within the General Assembly's policy-making authority to define legally cognizable remedies. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Constitutionality - Open Courts. - G.S. 1D-25, which places a cap on punitive damages, is not unconstitutional under the open courts provision in N.C. Const., Art. I, § 18, because it does not limit the recovery of actual damages. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

Because the Open Courts Clause of N.C. Const. art. I, § 18 does not prevent the General Assembly from abolishing the recovery of punitive damages altogether, it follows that G.S. 1D-25, which limits the awards of punitive damages, does not violate the Open Courts Clause. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Constitutionality - Due Process. - G.S. 1D-25, placing a cap on an award of punitive damages, does not take property without just compensation, infringing on a fundamental right, contrary to N.C. Const., Art. I, § 19, because punitive damages are not property belonging to an individual. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

The statutory limit on punitive damages in G.S. 1D-25 does not constitute an unconstitutional taking of property by denying plaintiffs of the "enjoyment of the fruits of their own labor" under N.C. Const. art. I, § 1 because (1) a jury's verdict is not "property" in which a plaintiff enjoys a vested right where the limitation on punitive damages applies prior to the entry of judgment; and (2) a litigant's participation in a trial is not a "labor" nor is a jury's verdict the "fruits" of that labor. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

As the jury awarded the patron $10,000 in compensatory damages, the trial court reduced the jury's punitive damages award of $350,000 to $250,000 in accordance with G.S. 1D-25(b); in light of the reprehensibility of the corporation's conduct, the relatively low ratio of punitive damages to compensatory damages, and the civil and criminal sanctions that might have been imposed for similar conduct, the trial court did not err in determining that the punitive damages award did not violate the corporation's due process rights. Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009).

Constitutionality - Equal Protection. - G.S. 1D-25, placing a cap on an award of punitive damages, does not treat similarly situated persons differently without compelling reason or rational justification, contrary to N.C. Const., Art. I, § 19, because no fundamental right is involved and the statute makes no mention of suspect classifications, subjecting it to rational basis review, and because the statute bears a rational relationship to a legitimate governmental interest in the state's economic development. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

Because the limitation on punitive damages contained in G.S.1D-25 bears some rational relationship to several legitimate governmental interests, G.S. 1D-25 does not violate principles of due process and equal protection as guaranteed by N.C. Cont. art. I, § 19. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Constitutionality - Vagueness. - G.S. 1D-25, which places a cap on punitive damages, is not unconstitutionally vague because it provides sufficient language for uniform judicial administration. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

G.S. 1D-25 is not unconstitutionally vague because the court can apply the rules of statutory construction to discern a meaning from G.S. 1D-25 that can be uniformly administered. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Constitutionality - Special Legislation. - G.S. 1D-25, placing a cap on an award of punitive damages, is not unconstitutional special legislation contrary to N.C. Const., Art. II, § 24, which prohibits the enactment of any local, private or special legislation remitting fines, penalties and forfeitures, because it does not constitute remittitur. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

G.S. 1D-25, placing a cap on an award of punitive damages, is not unconstitutional special legislation, contrary to N.C. Const., Art. I, § 32, because it applies equally to all defendants and creates no distinction between groups. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

Constitutionality - Right to Jury Trial. - G.S. 1D-25, which places a cap on punitive damages, does not violate injured parties' rights to a jury trial, under N.C. Const., Art. I, § 25, because the right to punitive damages is not a property interest, and there is only a right to a civil jury trial concerning property. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

Although N.C. Const. art. I, § 25 appears to embody a broad definition of the term "'property," a controversy in which punitive damages are assessed is not one which enforces a plaintiff's legal rights and, therefore, does not respect property; thus, G.S. 1D-25 in no way infringes upon plaintiffs' right to a trial by jury under N.C. Const. art. 1, § 25. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Construction With Other Laws. - G.S. 1D-26 does not infer an obvious intent to have courts read "and" as a disjunctive in G.S. 1D-1, which governs all punitive damages claims; claims for punitive damages cannot be asserted against a decedent's estate on the basis of the decedent's alleged egregiously wrongful acts because a decedent cannot be punished or deterred for whatever egregiously wrongful acts he may have committed before his death. Harrell v. Bowen, 362 N.C. 142, 655 S.E.2d 350 (2008).

Application of Section Upheld. - G.S. 1D-25, which places a cap on punitive damages, was appropriately applied to limit each individual plaintiff's punitive damages award, rather than being applied per each plaintiff's claim or per defendant. Rhyne v. K-Mart Corp., 149 N.C. App. 672, 562 S.E.2d 82 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004).

This section is not retroactive. Food Lion, Inc. v. Capital Cities/ABC, Inc., 984 F. Supp. 923 (M.D.N.C. 1997).

G.S. 1D-25 is not to be applied retroactively and, therefore, applies only to cases arising after January 1, 1996. Rhone-Poulenc Agro SA v. DeKalb Genetics Corp., 272 F.3d 1335 (4th Cir. 2001).

Cap Applies to Individual Jury Verdict of Each Plaintiff, Not Each Defendant. - In the absence of some legislative directive, it is assumed that the trier of fact should, as it did at common law, consider the factors set forth in G.S. 1D-15(a) as to each plaintiff's cause of action and not as to each defendant; it follows that, like G.S. 1D-15(a), G.S. 1D-25(b) applies to the individual jury verdict of each plaintiff. Thus, where a jury awarded compensatory and punitive damages, which exceeded the statutory cap of G.S. 1D-25(b), to two plaintiffs against one defendant, the trial court properly reduced the individual awards to both plaintiffs and entered judgment against defendant in the amount of the statutory cap for each plaintiff. Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

Award Within the Statutory Boundaries for Punitive Damages - Where a jury awarded lessees compensatory damages in the amount of $62,001.00 for breach of a lease/purchase agreement and conversion and punitive damages in the amount of $150,000.00, the amount of punitive damages was well within the boundaries provided in G.S. 1D-25(b) and was not excessively disproportionate to the circumstances of contumely and indignity present in the case. Zubaidi v. Earl L. Pickett Enters., 164 N.C. App. 107, 595 S.E.2d 190 (2004).

Illustrative Cases. - An award of punitive damages of $500,000 to the former wife against the current wife for alienation of affections and criminal conversion was not excessive, considering that the jury awarded the same amount in compensatory damages, and thus, could have awarded $1,500,000 in punitive damages. Hutelmyer v. Cox, 133 N.C. App. 364, 514 S.E.2d 554 (1999), cert. denied, 351 N.C. 104, 541 S.E.2d 146 (1999).

Punitive damages award against a boyfriend in an alienation of affections claim was warranted pursuant to G.S. 1D-15 where it was shown that the boyfriend had sexual relations on at least two occasions with the husband's wife; additionally, the award was not deemed excessive where it did not go beyond the limits established by subsection (b) of this section, and accordingly, the trial court's denial of the boyfriend's motion for a new trial on that issue, pursuant to G.S. 1A-1, Rule 59, was proper. Oddo v. Presser, 158 N.C. App. 360, 581 S.E.2d 123 (2003).

When an employer sued a competitor for involvement in the employer's former employees' employment contract violations, a punitive damages award erred because, when a trial court concluded each defendant engaged in conduct warranting such damages, the court improperly considered relevant factors not as to each plaintiff's cause of action, as required, but as to each defendant. Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634 (2013).

Trial court did not err by denying an executrix's motion for a new trial with respect to the amount of punitive damages awarded in connection with beneficiaries' breach of fiduciary duty claim because the executrix's conduct was, when considered in its entirety, exceedingly reprehensible; the ratio of compensatory damages to punitive damages was consistent with ratios that had been held not to be excessive in other cases. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Under this section, plaintiffs' punitive damages awards were limited to $ 250,000 for plaintiff one and $ 900,000 for plaintiffs two and three as their compensatory damage awards were $ 50,000 and $ 300,000, respectively. Vandevender v. Blue Ridge of Raleigh, LLC, - F.3d - (4th Cir. Aug. 2, 2018), modified, 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018). (But see 2018 U.S. App. LEXIS 33239 (4th Cir. N.C. 2018)) for modification of damage award).

Applied in Greene v. Royster, 187 N.C. App. 71, 652 S.E.2d 277 (2007); Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626 (2008).

Cited in Mace v. Pyatt, 203 N.C. App. 245, 691 S.E.2d 81 (2010), review denied 705 S.E.2d 354, 2010 N.C. LEXIS 1014 (2010); Bogovich v. Embassy Club of Sedgefield, Inc., 211 N.C. App. 1, 712 S.E.2d 257 (2011); Royster v. McNamara, 218 N.C. App. 520, 723 S.E.2d 122 (2012).

§ 1D-26. Driving while impaired; exemption from cap.

G.S. 1D-25(b) shall not apply to a claim for punitive damages for injury or harm arising from a defendant's operation of a motor vehicle if the actions of the defendant in operating the motor vehicle would give rise to an offense of driving while impaired under G.S. 20-138.1, 20-138.2, or 20-138.5.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

CASE NOTES

§ 1D-30. Bifurcated trial.

Upon the motion of a defendant, the issues of liability for compensatory damages and the amount of compensatory damages, if any, shall be tried separately from the issues of liability for punitive damages and the amount of punitive damages, if any. Evidence relating solely to punitive damages shall not be admissible until the trier of fact has determined that the defendant is liable for compensatory damages and has determined the amount of compensatory damages. The same trier of fact that tried the issues relating to compensatory damages shall try the issues relating to punitive damages.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "Legislative Expansion of Judicial Bifurcation: North Carolina's Double-Edge Sword," see 36 Campbell L. Rev. 201 (2014).

CASE NOTES

Section Not Retroactive. - This section did not apply where the cause of action was initiated prior to the enactment of this statute. Watson v. Dixon, 132 N.C. App. 329, 511 S.E.2d 37 (1999), cert. denied, 351 N.C. 191 (1999).

The defendant's failure to request a bifurcated trial under this section rendered evidence relating solely to punitive damages admissible at any time during plaintiff's case-in-chief. Ward v. Beaton, 141 N.C. App. 44, 539 S.E.2d 30 (2000), cert denied, 353 N.C. 398, 547 S.E.2d 431 (2001).

Remand for New Trial. - Where jury awarded compensatory damages, but not punitive damages, the appellate court was required to remand the entire case for retrial of all issues, following juror misconduct during punitive deliberation phase of bifurcated trial, since the same jury was required to hear and determine all issues. Lindsey v. Boddie-Noell Enters., 147 N.C. App. 166, 555 S.E.2d 369 (2001), cert. denied, 355 N.C. 213, 559 S.E.2d 803 (2002).

Instead of dismissing an accident victim's appeal from a partial summary judgment order denying an award of punitive damages and a jury award of compensator damages to the victim to comply with G.S. 1D-30, an appellate court was required to remand for a new trial on all issues, including liability for compensatory damages if the appeal was successful. George v. Greyhound Lines, Inc., 210 N.C. App. 388, 708 S.E.2d 201 (2011).

When taxpayers' punitive damages claim was bifurcated in their suit against county commissioners for entering into a contract that benefitted one of the commissioners, evidence relating only to punitive damages was not admissible in the compensatory damages portion of the trial, but nothing prevented them from presenting all of their evidence of liability for punitive damages. Gibbs v. Mayo, 162 N.C. App. 549, 591 S.E.2d 905, cert. denied, 358 N.C. 543, 599 S.E.2d 45 (2004).

Applied in Jones v. Harrelson & Smith Contrs., LLC, 194 N.C. App. 203, 670 S.E.2d 242 (2008), aff'd, 363 N.C. 371, 677 S.E.2d 453 (2009).

Cited in Ausley v. Bishop, 150 N.C. App. 56, 564 S.E.2d 252 (2002); Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004); Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009); Land v. Land, 201 N.C. App. 672, 687 S.E.2d 511 (2010), review denied 2010 N.C. LEXIS 498 (2010).

§ 1D-35. Punitive damages awards.

In determining the amount of punitive damages, if any, to be awarded, the trier of fact:

Shall consider the purposes of punitive damages set forth in G.S. 1D-1; and
May consider only that evidence that relates to the following:
1. The reprehensibility of the defendant's motives and conduct.
2. The likelihood, at the relevant time, of serious harm.
3. The degree of the defendant's awareness of the probable consequences of its conduct.
4. The duration of the defendant's conduct.
5. The actual damages suffered by the claimant.
6. Any concealment by the defendant of the facts or consequences of its conduct.
7. The existence and frequency of any similar past conduct by the defendant.
8. Whether the defendant profited from the conduct.
9. The defendant's ability to pay punitive damages, as evidenced by its revenues or net worth.

History

(1995, c. 514, s. 1.)

CASE NOTES

Applicability. - This section is not applicable to claims arising before January 1, 1996. Food Lion, Inc. v. Capital Cities/ABC, Inc., 984 F. Supp. 923 (M.D.N.C. 1997).

Application of Factors. - Although a former officer of a corporation was liable to the corporation for compensatory damages based on fraud and breach of fiduciary duty, punitive damages were not warranted since the officer reasonably believed that an agreement with the corporation was valid, engaged in no similar misconduct, only engaged in the misconduct for a brief period, did not conceal any of the conduct, and had no ability to pay a punitive award. Anderson v. Brokers, Inc. (In re Brokers, Inc.), 396 B.R. 146 (Bankr. M.D.N.C. 2008).

Debtor acted with actual malice when he made multiple statements on a radio program to the effect that the creditor had interfered with the debtor's treatment of a patient, resulting in permanent harm to the patient, and thus, an award of actual and punitive damages was nondischargeable under 11 U.S.C.S. § 523(a)(6). In exercising its discretion under G.S. 1D-35 to award punitive damages, the court considered the following factors: the debtor's behavior and the motives that prompted it were reprehensible; the likelihood of causing serious harm to the creditor was high, a fact of which the debtor was not only aware, but which he in fact sought to accomplish; the debtor caused the creditor to incur at least a moderate drop in his income; the debtor stood to gain by persuading the public and other doctors to avoid the creditor as a physician; the debtor's current earnings, as well as his earning potential, were such that he was able to pay punitive damages; and the debtor would, unless it was otherwise made abundantly clear, persist in his public campaign of disinformation with respect to the creditor. Janis v. Wefald (In re Wefald), - Bankr. - (Bankr. E.D.N.C. Nov. 30, 2011).

In an action for damages by four police officers against a rapper, a record company, and others, assuming an award of punitive damages was proper, the amount of punitive damages awarded did not constitute an abuse of discretion where the judgment specifically indicated that the trial court had considered the purpose of punitive damages, and the trial court concluded that the defendants' conduct and motives were reprehensible, that they were or should have been aware of the likelihood of serious harm to the police officers, and that they had the ability to pay the award. Nguyen v. Taylor, 219 N.C. App. 1, 723 S.E.2d 551 (2012).

Relevance of Ability to Pay. - Where plaintiff asserted a claim for punitive damages against defendant, and the claim survived a motion for summary judgment, defendant's individual tax return became relevant for purposes of discovery under Fed. R. Civ. P. 26 because defendant's ability to pay punitive damages, as evidenced by his revenues or net worth, could be considered by the jury when it determined the amount of punitive damages to award. Interstate Narrow Fabrics, Inc. v. Century United States, Inc., - F. Supp. 2d - (M.D.N.C. Feb. 24, 2004).

The defendant's failure to request a bifurcated trial under G.S. 1D-30 rendered evidence relating solely to punitive damages admissible at any time during plaintiff's case-in-chief. Ward v. Beaton, 141 N.C. App. 44, 539 S.E.2d 30 (2000), cert denied, 353 N.C. 398, 547 S.E.2d 431 (2001).

Evidence Mischaracterized. - Plaintiffs mischaracterized evidence they claimed was excluded in error, and regarding the company's ability to pay, certain questions were permitted, and regarding past similar conduct, certain objections to questions outside the scope were properly sustained; nevertheless, assuming arguendo the trial court erred in limiting testimony, the error was harmless given that directed verdicts were entered in favor of the company on the fraud claims and the jury never found the company liable, thereby precluding any contemplation of damages. Brissett v. First Mt. Vernon Indus. Loan Ass'n, 233 N.C. App. 241, 756 S.E.2d 798 (2014).

Applied in Everhart v. O'Charley's, Inc., 200 N.C. App. 142, 683 S.E.2d 728 (2009).

Cited in Hutelmyer v. Cox, 133 N.C. App. 364, 514 S.E.2d 554 (1999), cert. denied, 351 N.C. 104, 541 S.E.2d 146 (1999); Lindsey v. Boddie-Noell Enters., 147 N.C. App. 166, 555 S.E.2d 369 (2001), cert. denied, 355 N.C. 213, 559 S.E.2d 803 (2002); Lindsey v. Boddie-Noell Enters., 147 N.C. App. 166, 555 S.E.2d 369 (2001), cert. denied, 355 N.C. 213, 559 S.E.2d 803 (2002); Rosero v. Blake, 150 N.C. App. 250, 563 S.E.2d 248, cert. granted, 356 N.C. 166, 568 S.E.2d 610 (2002); Rhyne v. K-Mart Corp., 358 N.C. 160, 594 S.E.2d 1 (2004).

§ 1D-40. Jury instructions.

In a jury trial, the court shall instruct the jury with regard to subdivisions (1) and (2) of G.S. 1D-35.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

§ 1D-45. Frivolous or malicious actions; attorneys' fees.

The court shall award reasonable attorneys' fees, resulting from the defense against the punitive damages claim, against a claimant who files a claim for punitive damages that the claimant knows or should have known to be frivolous or malicious. The court shall award reasonable attorney fees against a defendant who asserts a defense in a punitive damages claim that the defendant knows or should have known to be frivolous or malicious.

History

(1995, c. 514, s. 1.)

Legal Periodicals. - For an article discussing "reverse bad faith," the concept of allowing an insurer to assert a counterclaim for affirmative relief against an insured who brings a frivolous, bad faith action, see 19 Campbell L. Rev. 43 (1996).

CASE NOTES

Fees Awarded Where Punitive Damages Claim Dismissed. - G.S. 1D-45 supported the award of attorneys' fees to a homeowners association and board members attorneys' fees because the trial court dismissed homeowners' punitive damages claim under N.C. R. Civ. P. 12; in awarding attorneys' fees, the record showed that the trial court was considering the award as it was ruling on the associations' motion to dismiss the homeowners' various counterclaims and defenses under N.C. R. Civ. P. 12 and 41, and that included a ruling as to punitive damages. Moss Creek Homeowners Ass'n v. Bissette, 202 N.C. App. 222, 689 S.E.2d 180 (2010), review dismissed, as moot, 364 N.C. 242, 698 S.E.2d 402, 2010 N.C. LEXIS 446 (N.C. 2010).

Abuse of Discretion to Reduce Attorneys' Fees Based on Punitive Damages Award. - Trial court abused its discretion to the extent that it reduced the amount of attorneys' fees that it would have otherwise awarded to beneficiaries based solely on the fact that the beneficiaries received a large punitive damages award because the fact that they received a large punitive damages award was not relevant to a proper attorneys' fee calculation. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

As a result of the different purposes sought to be achieved by punitive damages and attorneys' fee awards, a decision to reduce an attorneys' fee award based on the fact that a party received a large punitive damages award would necessarily serve to thwart the purposes sought to be achieved by allowing the recovery of punitive damages without serving any purpose sought to be achieved by an award of attorneys' fees. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Although attorneys' fee jurisprudence gives trial judges substantial discretion in determining what amount of attorneys' fees to award in any particular case, the use of a substantial punitive damages award as the sole reason for reducing an otherwise reasonable attorneys' fee award involves reliance upon a factor that has no reasonable bearing on the making of a proper attorneys' fee award and, for that reason, constitutes an abuse of the trial court's discretion. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Further Findings Required. - Trial court's award of attorneys' fees had to be remanded for further findings because the recipient of the award had retained out-of-state counsel whose fee was significantly greater than local counsel, but the court did not find that the retention of out-of-state counsel was required. Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634 (2013).

Apportionment of Fees Unnecessary. - Trial court did not err in awarding defendants attorney fees; the trial court did not err in determining that both the recoverable punitive damages claim and the non-recoverable claims arose from a common nucleus of law and fact and were inextricably interwoven, such that apportionment of fees between the punitive damages claim and the underlying claims was unnecessary. Philips v. Pitt County Mem. Hosp., - N.C. App. - , - S.E.2d - (Aug. 4, 2015).

Fees Properly Awarded. - There was competent evidence supporting the challenged findings, which as a whole supported the ultimate finding that plaintiff's claims were frivolous and malicious; he admitted to unprofessional conduct, he knew of his non-compliance and continued to violate hospital bylaws, but then persisted in his allegations that his privileges were revoked without any basis, and there was a valid basis for the initiation of corrective action, and thus the trial court did not err in awarding defendants attorney fees. Philips v. Pitt County Mem. Hosp., - N.C. App. - , - S.E.2d - (Aug. 4, 2015).

Cited in Area Landscaping, L.L.C. v. Glaxo-Wellcome, Inc., 160 N.C. App. 520, 586 S.E.2d 507 (2003); Blyth v. McCrary, 184 N.C. App. 654, 646 S.E.2d 813 (2007), review denied, 362 N.C. 175, 658 S.E.2d 482 (2008), review dismissed, as moot, 362 N.C. 175, 658 S.E.2d 482 (2008); McKinnon v. CV Indus., 228 N.C. App. 190, 745 S.E.2d 343 (2013).

§ 1D-50. Judicial review of award.

When reviewing the evidence regarding a finding by the trier of fact concerning liability for punitive damages in accordance with G.S. 1D-15(a), or regarding the amount of punitive damages awarded, the trial court shall state in a written opinion its reasons for upholding or disturbing the finding or award. In doing so, the court shall address with specificity the evidence, or lack thereof, as it bears on the liability for or the amount of punitive damages, in light of the requirements of this Chapter.

History

(1995, c. 514, s. 1.)

Cross References. - As to cap on stay of execution bonds pending appeal with respect to noncompensatory damages, see G.S. 1-289(b).

Legal Periodicals. - For article, "North Carolina's New Punitive Damages Statute: Who's Being Punished, Anyway?," see 74 N.C.L. Rev. 2174 (1996).

CASE NOTES

Motion to Dismiss Appeal. - An employer's motion to dismiss an appeal from the trial court's grant of J.N.O.V. on the issue of punitive damages was denied because the employee correctly appealed from the trial court's order since it contained no reasons as to why the trial court set aside the jury's verdict on the punitive damages claim. Scarborough v. Dillard's Inc., 188 N.C. App. 430, 655 S.E.2d 875 (2008).

Written Opinion Not Required on Award of Punitive Damages. - Trial court was not required to issue a written opinion regarding the award of punitive damages because the trustee did not contend that the amount of punitive damages exceeded the statutory limit and it was clear, based upon appellate review, that the award did not exceed the allowable limit. Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626 (2008).

Substitute Judge Properly Entered Punitive Damages Findings. - Trial court properly denied defendants' motion to dismiss plaintiff's punitive damages claim because G.S. 1A-1, Rule 63 authorized another judge, such as successor judge in this case, to enter the G.S. 1D-50 opinion. Springs v. City of Charlotte, 222 N.C. App. 132, 730 S.E.2d 803 (2012).

Review of Jury Verdict. - - In a software licensor's suit against a licensee for fraudulent inducement and breach of the license agreement by using the licensor's software to reverse engineer an identical competing software, which the licensee then sold the licensor's customers, a jury's verdict for damages of $26,376,635 and $3,000,000 in punitive damages was upheld. SAS Inst., Inc. v. World Programming Ltd., - F. Supp. 2d - (E.D.N.C. June 17, 2016).

Remand for Compliance with this Section. - Action was remanded because the trial court's order granting the former employer's motion for judgment notwithstanding verdict contained no reasons as to why the trial court set aside the jury's verdict on the former employee's punitive damages claim. Scarborough v. Dillard's, Inc., 179 N.C. App. 127, 632 S.E.2d 800 (2006).

Trial court erred in partially granting defendant's JNOV motion and setting aside the jury's award of punitive damages where it failed to address with specificity the evidence it found to be lacking as required by G.S. 1D-50 but merely stated that the evidence was insufficient. The case was remanded to the trial court to issue a written opinion setting forth its specific reasons for granting the motion. Hayes v. Waltz, 246 N.C. App. 438, 784 S.E.2d 607 (2016).

Applied in Scarborough v. Dillard's, Inc., 363 N.C. 715, 693 S.E.2d 640 (2009), cert. denied 131 S. Ct. 2456, 2011 U.S. LEXIS 3769, 179 L. Ed. 2d 1211 (U.S. 2011), cert. denied 563 U.S. 988, 131 S. Ct. 2456, 2011 U.S. LEXIS 3769 (U.S. 2011); Springs v. City of Charlotte, - N.C. App. - , 701 S.E.2d 700 (Nov. 16, 2010); Springs v. City of Charlotte, 209 N.C. App. 271, 704 S.E.2d 319 (2011).

Cited in Hudgins v. Wagoner, 204 N.C. App. 480, 694 S.E.2d 436 (2010), review denied 706 S.E.2d 250, 2011 N.C. LEXIS 136 (2011).