REYNOLDS TOBACCO COMPANY v. JUDITH SPURLOCK ESTATE OF LLOYD SPURLOCK (2023)

A tobacco company defendant appeals an adverse judgment, raising two issues: (1) the trial court erred in ruling on objections during voir dire; and (2) the trial court erred in denying the defendant's motion for a new trial on punitive damages. The plaintiff has cross-appealed the directed verdict entered in favor of the defendant on the plaintiff's conspiracy to commit fraudulent concealment claim. Just prior to oral argument, the defendant withdrew its “assignment of error” on the voir dire issue. We reverse on the punitive damages issue raised in the defendant's direct appeal and affirm the plaintiff's cross-appeal.

• The Background

The plaintiff filed suit alleging claims for negligence, strict liability, fraudulent concealment, and conspiracy to commit fraudulent concealment.¹ The decedent had smoked products manufactured by the defendant and its predecessors in interest.

In 2007, the decedent filed a complaint against the defendant individually and as successor by merger to the American Tobacco Company and Lorillard Tobacco Company. The decedent alleged smoking-related injuries from using the defendant's products. The operative complaint contained four counts: (1) strict liability, (2) civil conspiracy to commit fraud by concealment, (3) fraud by concealment, and (4) negligence. The case proceeded to trial.

The defendant moved for a directed verdict on the conspiracy to commit fraud by concealment and fraud by concealment claims twice: first, at the end of the plaintiff's case; and second, at the end of the entire case. The trial court reserved ruling on both motions.

After deliberations, the jury found smoking the defendant's cigarettes was the legal cause of the decedent's COPD. It found the decedent detrimentally relied on a statement made in furtherance of the defendant's agreement to commit fraud by concealment. But the jury found the decedent did not rely on a misleading statement made by the defendant or any of its predecessors in interest. In short, the jury found in favor of the plaintiff on the negligence, strict liability, and conspiracy claims, but not on the fraudulent concealment claim.

The jury awarded the plaintiff $540,915.43 in compensatory damages for the decedent's pain, suffering, and medical expenses. The jury allocated seventy percent of the fault to the decedent and thirty percent of the fault to the defendant. The jury further found punitive damages were warranted.

Thus, the trial went into its punitive damages phase. The personal representative had asserted four bases for punitive damages: (1) strict liability, (2) negligence, (3) fraud by concealment, and (4) conspiracy to commit fraud by concealment. The jury awarded the plaintiff $2 million in punitive damages. The jury was not asked, and it did not identify, on which claim it based the punitive damages award.

Subsequently, the trial court granted the defendant's motion for a directed verdict and set aside the jury's verdict on the conspiracy to commit fraud by concealment claim. The trial court found the plaintiff's claim for agreement to commit fraud by concealment could not support an award of punitive damages, “because ․ the evidence was insufficient to support a claim in her favor on that basis.” So, “[b]ecause [the plaintiff] ha[d] no viable fraud claim, she could not recover punitive damages predicated on fraud claims.”

The defendant next moved for a directed verdict and a new trial on the punitive damages issue. It argued that because the trial court directed a verdict on the conspiracy claim, after the trial court had allowed the jury to decide liability for punitive damages, the trial court essentially permitted the jury to punish the defendant for conduct it was not responsible for as a matter of law.

After extensive briefing and oral argument, the trial court denied the motion, relying on Soffer v. R.J Reynolds Tobacco Co., 187 So. 3d 1219 (Fla. 2016). It found the determinations of liability and punitive damages were not intertwined. Regardless, the trial court found the defendant would still not be entitled to a new trial due to the two-issue rule. The defendant did not ask for an itemized verdict form, and failed to establish the jury did not base its punitive damage findings on conduct relevant to the other claims, namely the plaintiff's products liability claim.

The defendant now appeals, and although it raised two issues in its brief, it subsequently limited its argument to only the punitive damages award. On cross-appeal, the plaintiff continues to argue the trial court erred when it directed a verdict on the conspiracy to commit fraud claim.

• The Appeal

The defendant continues to argue the trial court erred in denying its motion for a new trial on punitive damages after setting aside the jury's verdict and directed a verdict on the conspiracy to commit fraud by concealment claim. This is because the jury was allowed to award punitive damages on conduct the trial court subsequently found unsupported by the evidence.

The plaintiff responds that regardless of the directed verdict, the jury had a right to consider all evidence of the defendant's intentional fraudulent misconduct when deciding whether punitive damages were warranted on the products liability claim. According to the plaintiff, the conspiracy to commit fraud by concealment evidence was relevant to punitive damages even if the defendant was not liable on the conspiracy claim. And lastly, the plaintiff argues the two-issue rule bars the defendant's argument because the defendant failed to itemize the verdict form.

We review a trial court order on a motion for a new trial for an abuse of discretion. The Hertz Corp. v. Gleason, 874 So. 2d 1217, 1219 (Fla. 4th DCA 2004).

“[A] demand for punitive damages is not a separate and distinct cause of action; rather it is auxiliary to, and dependent upon, the existence of an underlying claim.” Soffer, 187 So. 3d at 1221 (internal quotation marks and citation omitted). To obtain punitive damages, a plaintiff must establish “by clear and convincing evidence the defendant is guilty of intentional misconduct or gross negligence.” R.J. Reynolds Tobacco Co. v. Martin, 53 So. 3d 1060, 1070 (Fla. 1st DCA 2010) (citing section 768.72(2), Florida Statute (2021)).

Here, the trial court erred in denying the defendant's motion for new trial on punitive damages. The trial court allowed the jury to consider evidence of the conspiracy in determining both the entitlement to, and amount of, punitive damages even though the trial court ultimately determined the conspiracy did not cause the decedent's injury as a matter of law.

In its closing argument, the plaintiff repeatedly emphasized the conspiracy evidence and urged the jury to award punitive damages. The plaintiff's counsel told the jurors they should consider conspiratorial conduct in deciding entitlement to punitive damages. In short, a reasonable probability exists that the jury awarded punitive damages because it considered the conspiracy evidence when determining punitive damages.

Our supreme court has instructed that a jury can consider a defendant's intentional misconduct in determining entitlement to punitive damages, even absent a fraud claim. See Soffer, 187 So. 3d at 1232 (“The legal standard for establishing entitlement to punitive damages does not vary depending on the underlying legal theory.”). Id. But to be entitled to punitive damages, a plaintiff must nonetheless prove, “the conduct causing the damage was either ‘intentional’ or ‘grossly negligent’ ” through “clear and convincing evidence.” Id. at 1222.

“The burden of proof is heightened from the general ‘more likely than not’ standard that applies to general liability questions in a civil case to a more stringent ‘clear and convincing’ standard, no matter [ ] the theory of punitive damages.” Id. So even “if negligence or strict liability constitutes the underlying cause of action, [a] plaintiff must prove that [a] defendant's conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct.” Id. (internal quotation marks and citation omitted).

Therefore, [a] defendant cannot be liable for punitive damages simply on the basis of a jury finding that the defendant was strictly liable or negligent. Absent a finding of intentional misconduct, [a] defendant can be liable for punitive damages only if there is a finding by clear and convincing evidence of gross negligence—the same standard that applies regardless of the underlying cause of action.

Id. at 1233.

Here, the defendant argues the jury could have based its decision to award punitive damages on, or was subject to influence by, improperly admitted conspiracy claim evidence. We agree.

We have reviewed the complaint's general allegations and those within the four corners of the plaintiff's negligence and strict liability claims. None of those allegations equate to “intentional misconduct” or “gross negligence,” nor does any evidence in the record support the requisite bad conduct absent the evidence related to the fraud and conspiracy claims. For this reason, we reverse the punitive damages award and remand the case to the trial court for a new trial on the plaintiff's entitlement to punitive damages, and, if necessary, the amount.²

Affirmed in part; Reversed in part.

FOOTNOTES

1.   The decedent passed away during the litigation and was substituted as plaintiff by his wife, the personal representative of his estate. The litigation was filed against two defendants, but the trial proceeded against only R.J. Reynolds.

2.   The plaintiff argued, and the trial court decided, the two-issue rule also warranted the denial of the defendant's motion for new trial. We disagree.“The two-issue rule provides that when more than one issue is presented to the jury, and the jury is instructed as to all the issues present, without an objection to the use of a general verdict form, appellate reversal is improper without a showing of prejudice.” Sherrer v. Hollingsworth, 274 So. 3d 407, 409 (Fla. 4th DCA 2019). But the two-issue rule does not apply “to single theory claims, even if multiple elements of that claim were in dispute.” Id. at 410. Rather, for the two-issue rule to apply, the various theories must be true alternatives to each other—that is, they must be entirely distinct paths to the same result. See id.Here, the two-issue rule does not apply because the plaintiff did not have entirely distinct theories for obtaining the same punitive damages.

MAY, J.

CIKLIN and ARTAU, J.J., concur.