SHAW, Justice.
Randall Boudreaux, M.D., Don Ortego, and Coastal Anesthesia, P.C. ("Coastal"), appeal from a $4,000,000 judgment, following a remittitur of a $20,000,000 jury verdict, against them and in favor of Paula Pettaway, as administratrix of the estate of Paulett Pettaway Hall, deceased, on her wrongful-death/medical-malpractice claim. We affirm.
Boudreaux is a licensed, board-certified anesthesiologist and a principal of Coastal; Ortego is a certified registered nurse anesthetist and an employee of Coastal. Coastal is the exclusive provider of anesthesia at Springhill Memorial Hospital in Mobile ("Springhill").
In January 2006, Hall, a 32-year-old mother who had previously undergone gastric-bypass surgery and who presented at Springhill with complaints of nausea, vomiting, and abdominal pain, underwent an exploratory laporotomy at Springhill, during
Pettaway sued Boudreaux, Ortego, and Coastal (hereinafter referred to collectively as "the defendants"), alleging wrongful death. The case proceeded to a jury trial. The evidence presented tended to establish — and her medical records reflected — that Hall had numerous risk factors placing her in the category of patients with a high risk of pulmonary aspiration during the administration of anesthesia via routine intubation. Despite those risk factors, however, Boudreaux and Ortego, who failed to physically examine Hall for the presence of aspiration risks or to review her medical records, employed a routine anesthetic induction as part of the intubation process instead of the rapid-sequence induction required for patients at risk for aspiration.
The defendants subsequently filed a joint motion seeking, alternatively, a judgment as a matter of law, a new trial, or a remittitur of the damages award. The trial court denied the defendants' postjudgment motion, on the condition that Pettaway accept a remittitur of the jury verdict. Specifically, applying the guideposts established in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), and the factors articulated in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala. 1986), and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989), the trial court remitted the $20,000,000 verdict to $4,000,000, which Pettaway accepted, and entered a judgment in Pettaway's favor in the reduced amount. The defendants jointly appeal.
On appeal, the defendants allege numerous errors by the trial court in denying their postjudgment request for a new trial.
The defendants initially contend that the trial court exceeded its discretion when it failed to grant a new trial on the ground that 9 of the 12 jurors seated in this case allegedly "suppressed material information about their personal litigation histories...." (Defendants' brief, at p. 9.) The defendants argue that the allegedly suppressed information included the fact that six of the jurors were plaintiffs in prior, undisclosed litigation, which, the defendants argue, "led to the selection of a jury that was sympathetic to [Pettaway] and doubtless predisposed against Defendants." Id.
During voir dire, defense counsel asked the venire the following question:
In response, prospective juror M.C. indicated that, approximately 15 to 18 years earlier, he had been the plaintiff in a fraud case that had proceeded to a successful trial; prospective juror A.D. disclosed that, approximately 5 years earlier, she had been the plaintiff in a suit resulting from an automobile accident; prospective juror D.A. disclosed that, approximately 3 years earlier, she had been the plaintiff in a discrimination-related employment suit; prospective juror H.T.H. responded that, the previous summer, she had filed a small-claims action; and prospective juror S.B. indicated that in 1997 she had filed a premises-liability action against a commercial establishment as the result of a fall.
After receiving the foregoing responses, defense counsel then asked the following questions of the venire:
Aside from receiving confirmation that three previously identified members of the venire, prospective jurors J.D., H.F.H., and G.P.S., "[had] something like that, [which would be] take[n] up separately," defense counsel received no noted response to the foregoing questions.
At the conclusion of the trial, which, as noted above, resulted in a verdict for Pettaway, the defendants moved for a new trial, claiming that posttrial investigations revealed that several of the seated jurors had failed to fully respond to the questions set out above regarding their personal-litigation histories. The defendants further argued that despite questioning by defense counsel during voir dire as to past disputes with health-care providers, four jurors failed to disclose past billing disputes with hospitals or other health-care providers, including two jurors who either had been discharged in bankruptcy or had disputed debts owed to Springhill.
Specifically, as reasserted in their brief to this Court, the defendants contend that a total of nine members of the seated jury purportedly failed to disclose the following during voir dire: M.F. had allegedly been a party in three prior civil suits, which she
In light of the foregoing, the defendants contended that "a decidedly plaintiff-oriented jury was selected...." They maintained that they had been prejudiced by the jurors' alleged failure to answer truthfully because, they said, complete and truthful responses "would have absolutely changed defense counsel's analysis in voir dire and impacted the way in which he exercised peremptory strikes...." The defendants' request for a new trial was accompanied by the affidavit testimony of defense counsel indicating that, had the nine jurors disclosed their involvement in previous litigation, he would have endeavored to determine the impact of that involvement "on their suitability to serve," would have been able to potentially challenge some of the jurors for cause, and/or would have reevaluated the use of his peremptory strikes.
As to this issue, the trial court's postjudgment order included the following factual findings:
(Emphasis added.)
In general, the standard of review applicable to this issue is whether the trial court exceeded its discretion in failing to grant a new trial on the ground of alleged juror misconduct:
Ex parte Dixon, 55 So.3d 1257, 1260-61 (Ala.2010). See also Holly v. Huntsville Hosp., 925 So.2d 160, 165 (Ala.2005).
Although a large number of jurors did not disclose their complete litigation history and at least two jurors had litigation matters pending at the time of the underlying trial, upon full review it appears that, as the trial court concluded, the jurors' alleged failure to disclose such history could be the result of the ambiguous and self-limiting nature of the questions asked by defense counsel. See Williston v. Ard, 611 So.2d 274, 277 (Ala.1992) (affirming a trial court's denial of a new trial on the issue of improper juror responses in a medical-malpractice action where "the trial court could have found inadvertence on the part of the jurors or a misunderstanding of the question as it related to them" based on trial court's holding that "the phrase `a lawsuit for damages' ... summarily exclude[d] collection cases from consideration" and its finding "that [the defendant] `suffered no injury or prejudice when several potential jurors failed to disclose that they or members of their family had been defendants in debt collection cases'"); Ensor v. Wilson, 519 So.2d 1244, 1265 (Ala.1987) (declining to find that the trial court exceeded its discretion in denying
Further, several veniremembers disclosed prior cases in which each had served as the named plaintiff without specific followup questioning by defense counsel. In fact, as the defendants note in their brief to this Court, both juror A.D. and juror H.T.H. revealed that they had previously been plaintiffs; however, defense counsel asked only whether that prior experience would affect their ability to sit on the jury and to render an impartial verdict. Counsel did not strike either on the basis that the prospective juror had previously served as a plaintiff; therefore, given that the defendants knew that each had been a plaintiff in at least one action, we are unable to conclude that the trial court exceeded its discretion in finding that further litigation history would not have further informed the defendants' decisions — especially given the nature of those other actions.
Moreover, as to the defendants' claim that the alleged nondisclosures resulted in the seating of a "plaintiff-oriented" jury, we note that only four of the allegedly nonresponsive jurors — A.D., M.F., S.W., and H.T.H. — actually had been a plaintiff in prior actions.
Finally, we note that none of the alleged nondisclosed matters was either a wrongful-death or medical-malpractice case; thus, there is no factual similarity between any of those allegedly nondisclosed matters and the present case. Moreover, there is nothing indicating that the prospective jurors' alleged failure to respond was something other than the product of faulty memory, inadvertence, or a mere misunderstanding. See Burroughs Corp. v. Hall Affiliates, Inc., 423 So.2d 1348, 1352 (Ala.1982) (holding that the jurors' failure to remember particular facts inquired about on voir dire and the jurors' misunderstanding of voir dire questions do not constitute probable prejudice). Without such an indication, there is nothing to counter the trial court's finding, as set out above, that the defendants presented no evidence demonstrating willfulness by the jurors in failing to respond to questions regarding their litigation histories. See id. (concluding that the trial court's inclusion of a finding "that there was an absence of any improper motive of any one of the five jurors in failing to respond" was sufficient to support the conclusion that the trial court did not exceed its discretion in failing to grant a new trial on that ground).
Although the defendants were indisputably entitled to truthful responses to their voir dire questioning in order to wisely use their peremptory strikes, see, e.g., Land & Assocs., Inc. v. Simmons, 562 So.2d 140, 148 (Ala.1989), they still bore the burden of demonstrating probable prejudice from the alleged partially truthful or untruthful responses they have identified. The trial judge, who was present during the voir dire examination, was in a better position to determine whether the defendants were or might have been prejudiced. Here, the trial court, based on the reasoned evaluation of the voir dire examination reflected in the trial court's order, which considered each of the factors this Court has approved for weighing probable prejudice and each of the defendants' claims in this regard, determined that no probable prejudice to the defendants was shown. While considering what defense counsel was obviously seeking when he asked the questions regarding prior litigation, the trial court was clearly within the bounds of its discretion in considering that the questions — especially
Given the phrasing of the voir dire questions posed by defense counsel, the absence of any demonstration of willfulness on the part of allegedly untruthful jurors, the lack of materiality of the alleged undisclosed matters, and the limited scope of our review, we are unable to hold that the trial court exceeded its discretion in concluding both that the cause of the failures to respond was misunderstanding of the questions posed and that no probable prejudice resulted. Simmons, 562 So.2d at 149. But see Conference America, Inc. v. Telecommunications Coop. Network, Inc., 885 So.2d 772, 777 (Ala.2003) (holding that there was no indication that the questions on voir dire were ambiguous or that the juror's failure to respond was inadvertent and concluding that the nondisclosed matters were material). Therefore, we cannot agree that the trial court was required to grant the defendants' request for a new trial on this ground. See Union Mortg. Co. v. Barlow, 595 So.2d 1335, 1342-43 (Ala.1992) (concluding that the trial court did not exceed its discretion in denying a motion for a new trial based on the allegation that seven jurors allegedly failed to accurately respond to a voir dire question as to whether they knew the plaintiff's witnesses).
The defendants further argue that the trial court erred in denying their motion for a new trial because, they contend, "the administration of the wrongful death statute and imposition of punitive damages in this case were unconstitutional." (Defendants' brief, at p. 37.) More specifically, they contend, the application of Alabama's wrongful-death statute, particularly the portion holding Coastal vicariously liable for the actions of Boudreaux and Ortego, violated Coastal's guarantees of both due process and equal protection.
The defendants emphasize, as Justice Johnstone noted in his dissent in Ex parte Henry, 770 So.2d 76, 85 (Ala.2000), that "[f]or a plaintiff to recover punitive damages against a principal for vicarious liability for the wrongful act of the agent, § 6-11-27(a)[, Ala.Code 1975,] requires proof of at least one of four kinds of culpability in addition to the essential elements of the tort and the agency traditionally recognized by common law for vicarious liability." See also Cain v. Mortg. Realty Co., 723 So.2d 631, 633 (Ala.1998) ("[I]n the usual case, a jury may award compensatory damages against a principal based on the general common-law principles of agency, but may award punitive damages only if it finds one of the specific criteria listed in § 6-11-27(a)[, Ala.Code 1975].").
Cain, 723 So.2d at 633.
In light of the foregoing, the defendants maintain that "because Alabama's wrongful death statute places no limits on the types of conduct that may be imputed to the principal," and "[b]ecause any action by a principal's agent that justifies a punitive damages award against the agent will result in the imputation of punitive damages against the principal," Alabama's wrongful-death statute both affords "different classes of defendants ... different protections" and prevents Coastal ... from ordering its conduct to avoid the imposition of "large punitive damage[s] awards" and thus deprives Coastal of the fair notice of potentially punitive conduct as required by BMW v. Gore, supra. (Defendants' brief, at p. 38.)
Initially, we note that the statute does not treat similarly situated defendants differently. The very fact that an alleged wrongful death occurred distinguishes the situation of the defendants in the instant case from defendants protected from vicarious liability for punitive damages in cases involving injuries less than death. See Campbell v. Williams, 638 So.2d 804, 810-11 (Ala.1994) ("We note that Alabama has historically treated actions resulting in death differently from actions causing lesser injury."). In Alabama Power Co. v. Turner, 575 So.2d 551 (Ala.1991), this Court rejected an argument exactly like the defendants' argument here, noting:
575 So.2d at 556. Thus, contrary to the defendants' claim, the legislative classification of wrongful-death cases does further a legitimate state interest: protecting the lives of its citizens. Nothing before us indicates that our holding in Turner was either incorrect or is due to be revisited. Thus, stare decisis requires our adherence to the resolution of the defendants' argument mandated by Turner.
Moreover, as Pettaway notes, and as alluded to in the foregoing quotation, the United States Supreme Court has previously determined that the imposition of vicarious liability without an accompanying finding of fault — as specifically permitted by Alabama's wrongful-death statute — does not violate accepted notions of due process: "The principle of respondeat superior itself and the rule of liability of corporations for the willful torts of their employees extended in some jurisdictions... to liability for punitive damages ... are recognitions by the common law that the imposition of liability without personal fault, having its foundation in a recognized public policy, is not repugnant to accepted notions of due process of law." Louis Pizitz Dry Goods Co. v. Yeldell, 274 U.S. 112, 115, 47 S.Ct. 509, 71 L.Ed. 952 (1927). The Court thus concluded that "[a Legislature] may impose an extraordinary liability... not only upon those at fault but upon those who, although not directly culpable, are able nevertheless, in the management of their affairs, to guard substantially against the evil to be prevented." 274 U.S. at 116, 47 S.Ct. 509. Therefore, the argument that Coastal lacked notice that it would be held "directly culpable" for the negligent acts of its agents or employees, if and when such acts ultimately resulted in death, is without merit. Accordingly, the application of Alabama's wrongful-death statute denied the defendants neither due process nor equal protection of the law, and, as to that argument, the trial court did not exceed its discretion in denying them a new trial. See Acceptance Ins. Co. v. Brown, 832 So.2d 1, 12 (Ala.2001)
Next, the defendants contend that they were deprived of due process because of the alleged inability of the trial court to apply one of the three factors established by the United States Supreme Court in BMW v. Gore, supra, for assessing the alleged excessiveness of a punitive-damages award.
The defendants note that in Tillis Trucking Co. v. Moses, 748 So.2d 874, 890 (Ala.1999), this Court specifically declined "to overturn more than a century of precedent" despite the noted difficulty in reconciling this Gore factor with our established jurisprudence:
748 So.2d at 890.
Nonetheless, the defendants maintain that this Court cannot "ignore the requisite due process analysis mandated by [Gore ]." (Defendants' brief, at p. 42.) The defendants also specifically request that we overrule Tillis Trucking. In support of that request, they cite pre-Gore United States Supreme Court precedent suggesting that a long-standing practice or interpretation will not protect the wrongful-death statute from constitutional attack, see Williams v. Illinois, 399 U.S. 235, 239, 90 S.Ct. 2018, 26 L.Ed.2d 586 (1970), and they rely heavily on Justice Lyons's special writing in Mobile Infirmary Ass'n v. Tyler, 981 So.2d 1077 (Ala.2007), in which he expressed dissatisfaction with the above-outlined approach with regard to the application of the Gore comparison factor in wrongful-death cases. 981 So.2d at 1109.
Because Alabama's wrongful-death statute provides for only punitive damages,
The defendants also contend that the "jury's unbridled discretion" with regard to determining punitive damages under Alabama's wrongful-death statute denied them due process. (Defendants' brief, at p. 43.) As noted in Turner, supra — a decision rendered subsequent to Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), on which the defendants rely — this Court has also, on more than one occasion, considered and rejected this exact claim:
575 So.2d at 553-56. With no challenge to this rationale, we decline to abandon the precedent in Turner.
The defendants also contend that, in the absence of a new trial, they are due, under the guideposts set forth in Gore and the factors set out in Hammond and Green Oil, a further remittitur of the jury's punitive-damages award based on its alleged excessiveness. We disagree.
The trial court included in its postjudgment order the following findings of fact with regard to the defendants' remittitur request:
(Capitalization in original.)
As set out above, based upon its application of the Gore guideposts and the Hammond and Green Oil factors, the trial court remitted the punitive-damages award imposed against the defendants from $20,000,000 to $4,000,000. The defendants contend that the remittitur both was insufficient and "was reached through a process veiled in secrecy which clearly deprived [them] of due process." (Defendants' brief, at p. 46.) More specifically, they argue that they were entitled to an increased remittitur under the Gore factors because, they say, their conduct was not reprehensible; the duration of their conduct was brief; they were purportedly unaware of any potential hazard from the alleged routine procedure and did not act with willfulness, wantonness, or intent to harm Hall; they did not attempt to conceal any information related to Hall's death; and there was no evidence of a history of similar conduct by the defendants. They
"We review the trial court's award of punitive damages de novo, with no presumption of correctness." Mack Trucks, Inc. v. Witherspoon, 867 So.2d 307, 309 (Ala.2003) (citing Acceptance Ins. Co. v. Brown, 832 So.2d at 24). The trial court's application of the Gore guideposts and the Hammond and Green Oil factors is also reviewed de novo. See Tyler, 981 So.2d at 1106. Considering each factor, in turn, we see nothing indicating that the trial court erred in determining the amount of the remittitur.
Initially, as to the defendants' disproportionality argument, Reynolds is inapposite: it is a no-opinion affirmance and, thus, does not offer a discussion of the applicable factors on which the trial court's remittitur and this Court's affirmance of that remittitur were based. See also Rule 53(d), Ala. R.App. P. ("An order of affirmance issued by the Supreme Court ... by which a judgment or order is affirmed without an opinion ... shall have no precedential value and shall not be cited in arguments or briefs...."). Similarly, although the holding in Tyler included a remittitur of a $5,500,000 punitive-damages award to $3,000,000, that case, too, did not include a recitation of the factors on which the remittitur was based.
Additionally, the trial court performed a comparison of the present award with those in similar cases and determined that it was not disproportionate. The cases cited by the trial court in this regard confirm that the remitted award in the instant case is not an unusually large amount in comparison with awards affirmed in other wrongful-death cases. See, e.g., Campbell v. Williams, 638 So.2d 804, 818 (Ala.1994) (affirming trial court's denial of a remittitur of a punitive-damages award in a wrongful-death case based on the "conclu[sion] that the $4 million punitive damages award ... [did] not exceed an amount necessary to punish Dr. Campbell for his action and to deter him and others from committing similar acts in the future"). Further, given the possibility that the defendants may, by means of their potential bad-faith and/or negligent-failure-to-settle claim — discussed below — avoid any impact of the remitted award, we cannot agree that the remitted amount is disproportionate.
The defendants' claim that the remitted amount is financially devastating is unavailing. Including the available insurance coverage and relying on their individual net worths as calculated by the trial court, the defendants claim a combined net worth of $1,435,555. They cite authority for the
The defendants are correct that, in BMW of North America, Inc. v. Gore, 701 So.2d 507 (Ala.1997), on remand from the United States Supreme Court, we "suggested" that following our remand the trial court "might consider whether a punitive damages award that exceeds 10% of the defendant's net worth crosses the line from punishment to destruction, particularly where the defendant's conduct is not highly reprehensible." 701 So.2d at 514. However, that suggestion does not represent, as the defendants seem to argue, this Court's implementation of a definitive rule that a punitive-damages award may not exceed 10% of a defendant's net worth. To the contrary, as we observed in McKowan v. Bentley, 773 So.2d 990 (Ala.1999), "Alabama law does not impose specific limits on the amount that may be recovered in a wrongful death action." 773 So.2d at 999. See also § 6-11-21(j), Ala.Code 1975. Further, the 10% recommendation appears to have been applied only in a non-wrongful-death setting. Specifically, in Jeter, we held that a punitive-damages award of approximately 10% of the corporate defendant's net worth, resulting "from misconduct during a single transaction not involving loss of life or limb," weighed in favor of finding the award excessive. 832 So.2d at 42 (emphasis added). Although this case and the resulting judgment stem, too, from a single act the trial court apparently deemed less reprehensible than some, it is undisputed that the defendants' conduct here resulted in death. That fact, alone, removes the present case from application of the "rule" urged by the defendants.
Finally, as Pettaway notes, both Boudreaux and Coastal appear to have sufficient assets and/or income to allow them to pay the remitted award. The $1,000,000 in available insurance coverage, which accounts for one-quarter of the remitted award, has already been paid to the clerk of the trial court. Additionally, despite its computed net worth based on a corporate structure that apparently distributes all net income as dividends, the record reflects that Coastal is a profitable business that, from 2006 to 2009, generated annual billings in excess of $8,000,000
We are also unpersuaded by the defendants' contention that statements to the jury by Pettaway's counsel noting that Hall was "a wife, mother, daughter, family member, and breadwinner" justify further remittitur. (Defendants' brief, at pp. 53-54.) Specifically, they argue that an additional remittitur is required to offset the
In examining a similar claim in Atkins v. Lee, 603 So.2d 937 (Ala.1992), we explained:
603 So.2d at 942. We further held in Seaboard Coast Line R.R. v. Moore, 479 So.2d 1131, 1136 (Ala.1985), that "[t]he standard of review by this Court on claims of improper argument is that we will not reverse unless substantial prejudice resulted, and there is a presumption in favor of the trial court's ruling."
The defendants do not cite to the portions of the record where the alleged prejudicial argument occurred, indicate whether they objected at the time the argument was made, or explain whether curative steps were taken by the trial court. Moreover, the record reflects that, in his opening statement, Pettaway's counsel informed the jury that, per our wrongful-death statute, "every life is precious" and that "[t]he focus is not on the loss ... [or] what's happened to the family...." Similarly, when Pettaway's counsel announced his intention to call Pettaway to testify, the defendants, renewing one of the grounds from their pretrial motion in limine, sought to exclude any and all reference to damages as compensating for a loss and objected on grounds that "there [was] no legitimate reason to call [her] and have her testify about the family situations because it's a wrongful death case." The trial court agreed, permitting Pettaway to testify only as to the nature of her relationship with Hall as a means of explaining her presence during Hall's stay at Springhill and her personal observations of Hall's physical condition during that time, but specifically noting that "[it would] not allow her to go into any of her family situation" and "[n]ot the kids."
Finally, it is undisputed that the trial court properly instructed the jurors that their verdict should not be based on "sympathy or prejudice or emotion," that anything the attorneys may have said during the course of the trial was not evidence, and that any remark by an attorney that was contrary to the trial court's instructions
Clearly, the descriptive labels allegedly applied to Hall here do not rise to the level of impermissible comment, which this Court considered and found objectionable in Lance, Inc. v. Ramanauskas, 731 So.2d 1204 (Ala.1999) — the sole authority on which the defendants rely in support of this claim. Specifically, Lance, in which a 10-year-old boy died after being electrocuted while attempting to purchase a snack from a vending machine, involved alleged "improper references to compensatory damages and to the parents' mental anguish," including repeated references to "the suffering of the parents and the family." 731 So.2d at 1215. See also Cherokee Elec. Coop. v. Cochran, 706 So.2d 1188, 1195 (Ala.1997) (rejecting a claim that a comment by plaintiff's counsel that "[t]here is no price that you can pay for a daddy[,]" amounted to a request for compensatory damages or was so inflammatory as to require reversal); Hardin v. Sellers, 270 Ala. 156, 117 So.2d 383 (1960) (noting the impropriety of argument by plaintiff's attorney in a wrongful-death case clearly asking the jury to award compensatory damages). Here, we do not conclude that the labels Pettaway's counsel used to describe Hall were a plea for compensatory damages, were a plea for compensation based on characteristics unique to Hall, or were otherwise so inflammatory that they prejudiced the outcome of a case involving, as the trial court noted, such "explosive facts."
Therefore we see nothing to suggest that the comments here approach a blurring of the distinction between the value of all human life and the value of the life of a particular individual. Even assuming, as the defendants argue, that the comments of Pettaway's counsel could be construed as emphasizing the value of Hall's life in particular and perhaps in a roundabout way calling for the imposition of compensatory damages, we conclude that the trial court's instructions to the jury alleviated any potential confusion in that regard. See Lance, 731 So.2d at 1216 ("Our cases have held that [the trial court's proper instruction to the jury that only punitive damages may be awarded in a wrongful-death case] can dispel possible confusion over the proper measure of damages generated by an improper argument as to the value of a particular life." (citing Atkins, 603 So.2d at 942)). Moreover, to the extent any alleged improper argument
The defendants' final challenge to the trial court's remittitur is that, in calculating the remitted judgment amount and, more specifically, in calculating the defendants' assets, the trial court erred in considering the contents of the claim file compiled by the defendants' liability-insurance carrier and in including among the defendants' assets a potential bad-faith and/or negligent-failure-to-settle claim against the carrier. The defendants and their carrier objected on the ground that the claim file was subject to the attorney-client privilege, see Rule 502, Ala. R. Evid., and that it contained attorney work product, see Rule 26(b), Ala. R. Civ. P.
The trial court, relying on Mutual Assurance, Inc. v. Madden, 627 So.2d 865 (Ala.1993), in which a majority of this Court concluded that "[i]t is within the trial court's discretion to ascribe a reasonable present value to [a defendants' bad-faith or negligent-failure-to-settle claim], and to consider such an asset on the remittitur issue," 627 So.2d at 866, granted Pettaway's motion to compel in camera production of the claim file. However, in light of the defendants' claims of privilege, the trial court specifically ordered that any specific attorney-client communications could be either redacted or removed before its review of the file.
The trial court denied a subsequent motion by the defendants seeking a protective order, and the defendants petitioned this Court for mandamus review. In that petition, the defendants maintained that the file contained privileged and protected documents, that there was no applicable exception to the privileges, and that they did not waive — and the trial court could not force them to forfeit — those privileges.
This Court, by an unpublished order, denied the petition. Ex parte Boudreaux, (No. 1091492, September 21, 2010) (Ala. 2010).
As to this issue on appeal, the defendants repeat the arguments they made to the trial court and in their mandamus petition. In Madden (a virtually identical factual setting where there was no apparent waiver of available privileges), this Court held that an insurance-claim file was relevant to the consideration of a remittitur because, "in determining the financial impact of a punitive damages award on a defendant, a trial court should determine `the true impact on the defendant.'" 627 So.2d at 866 (quoting Killough v. Jahandarfard, 578 So.2d 1041, 1047 (Ala.1991)). That was true even though, at the time of the trial court's remittitur evaluation, the failure-to-settle claim remained merely a "potential" claim. 627 So.2d at 866. Although
Here, it appears that the trial court took reasonable precautions in an effort to respect the privileges asserted by the defendants in allowing them to withhold or redact communications between the defendants and their attorneys. Despite this leeway, the defendants and their insurer apparently opted neither to withhold nor to redact any of the information contained in the claim file. Moreover, for all of their privilege-based arguments and citation of the potential dangers of such a practice, the defendants do not demonstrate how, in this particular case, they were actually prejudiced by the trial court's in camera review of the claim file. Further, there is no argument that the trial court lacked sufficient information to adequately assess the defendants' potential claim against their insurer. See Tillis Trucking, 748 So.2d at 887 (distinguishing that case from Madden on the grounds that the record in Tillis Trucking both contained "countervailing evidence" and lacked the "considerable evidence" supporting a present-value determination that was available to the trial court in Madden).
The defendants further argue that the trial court's consideration of the potential merits of their claim against their insurer was arbitrary in that the trial court failed to state whether it found the existence of a potential negligent-failure-to-settle, versus a bad-faith-failure-to-settle, claim. However, it appears that the alleged separate methods of proving either theory of recovery is not material. As stated in State Farm Mutual Automobile Insurance Co. v. Hollis, 554 So.2d 387, 392 (Ala.1989): "In Waters [v. American Casualty Co. of Reading, Pa., 261 Ala. 252, 73 So.2d 524 (1954) ], we recognized causes of action for negligence or bad faith in not settling a claim." More specifically, Waters concluded that the insured may pursue the insurer for either or both, and that, in fact, "separate counts, one charging negligence and one charging bad faith may be joined in the same complaint." 261 Ala. at 258, 73 So.2d at 528. In any event, liability is the same under either theory: "Alabama law states that a liability insurer may be liable to its insured beyond the policy limits for the insurer's negligence or bad faith in failing to settle claims against its insured within policy limits when a judgment greater than the policy limits is later obtained against the insured." Turner Ins. Agency v. Continental Cas. Ins. Co., 541 So.2d 471, 472 (Ala.1989). Thus, regardless of the theory of recovery or the method of proof, the measure of damages is the same for each and would relieve the defendants of responsibility for the amount of the judgment exceeding their coverage. Id. See also Hollis, 554 So.2d at 390.
The defendants further contend that the trial court assigned a "hypothetical `value'" to their potential bad-faith claim based on purported speculative and undisclosed findings and without allowing them the opportunity to respond; this, the defendants allege, constituted a denial of due process. (Defendants' brief, at p. 62.)
We note that there is nothing to suggest that the trial court assigned a dollar value, hypothetical or otherwise, to the defendants' potential bad-faith claim, despite Madden's express authorization for it to do so. See Madden, 627 So.2d at 866 ("Certainly, it is within the trial court's discretion to ascribe a reasonable present value to this interest, and to consider such an asset on the remittitur issue."). Instead, the record is rife with assurances by Pettaway's counsel that he was not asking for the assignment of an exact dollar value, and the trial court repeatedly insisted that it believed its role was to determine whether there was a potential source of recovery, i.e., an additional asset that prevented the jury's award from having the devastating effect alleged by the defendants. Pettaway sought a finding solely as to the existence, viability, and potential merit of that claim.
The trial court's findings, as reflected in its postjudgment order, similarly reflect that, in reviewing the claim file, it considered, as another asset possessed by the defendants, only the strength of the potential claim and, given the possibility that the insurer would ultimately be held liable for the full amount of the judgment exceeding the available coverage, whether the judgment amount constituted excessive punishment as the defendants alleged. The trial court made detailed findings explaining its evaluation of the merits of the potential claim and the evidence it had considered in reaching that determination. Although Madden certainly would have supported such an undertaking by the trial court, it appears that, here, the trial court did not assign a numerical value to the claim but, in evaluating the defendants' claims that the award would financially devastate them, merely evaluated the likelihood that a third party might ultimately be held responsible for payment of any amount exceeding the available insurance coverage.
Contrary to the defendants' arguments, this Court's decision in Madden was intended to promote the "`meaningful and adequate' judicial review of a punitive damage[s] award," which the defendants themselves maintain is constitutionally required. (Defendants' brief, at p. 66.) The defendants cite no convincing authority suggesting that Madden was, in fact, incorrectly decided. In the absence of such authority, we are unable to conclude that the trial court, which followed to the letter the guidelines previously established by this Court, erred in failing to further remit the amount of the jury verdict.
Based on the foregoing, we conclude that the trial court correctly denied the defendants' request for a new trial and appropriately refused to further remit the jury's punitive-damages award. Accordingly, the judgment is due to be affirmed.
AFFIRMED.
MALONE, C.J., and WOODALL, STUART, BOLIN, PARKER, MAIN, and WISE, JJ., concur.
MURDOCK, J., dissents.
MURDOCK, Justice (dissenting).
I disagree with this Court's conclusion that it was permissible for the trial court to consider a potential bad-faith and/or negligent-failure-to-settle claim against the defendants' liability-insurance carrier in assessing whether the punitive-damages award was beyond the defendants' ability to pay.
In considering a potential claim as part of the defendants' assets, the trial court relied, and the main opinion relies, upon Mutual Assurance, Inc. v. Madden, 627 So.2d 865 (Ala.1993), a case in which this Court stated that "it is within the trial court's discretion to ascribe a reasonable present value to [the defendant's potential claims], and to consider such an asset on the remittitur issue." Id. at 866. The main opinion fails to note, however, that this statement in Madden was dictum.
The appellants in Madden, the doctor in a medical-malpractice action and his liability-insurance carrier, challenged the trial court's authority to order the insurance carrier to "show cause" as to why the court should not consider, in determining the financial impact of the punitive-damages award, a potential bad-faith claim the doctor might have had against his liability-insurance carrier. This Court concluded that the trial court did not have the authority to order the liability-insurance carrier, a nonparty to the malpractice action, "to assume a burden of proof on the remittitur question." 627 So.2d at 866. The Madden Court held that this conclusion was "dispositive of these appeals." Id.
Despite this holding, and simply because "the parties request[ed] that we also address" the issue, 627 So.2d at 866, the Court went further and addressed whether, in a remittitur proceeding, it was proper for a trial court to consider a physician's potential for recovering from his liability insurer the amount of the judgment against him that exceeds the amount of his insurance coverage. Id. Thus, the conclusion from Madden relied upon by the main opinion is dictum and, therefore, it is not binding upon this Court in the present case. See Ex parte Williams, 838 So.2d 1028, 1031 (Ala.2002) (observing that "obiter dictum is, by definition, not essential to the judgment of the court which states the dictum[; therefore,] it is not the law of the case established by that judgment").
In asking this Court to overrule the dictum in Madden, the defendants do not ask us to dispense with a persuasive holding of this Court. Indeed, in the only other case in which this Court has addressed this issue — Tillis Trucking Co. v. Moses, 748 So.2d 874 (Ala. 1999) — the Court distinguished Madden on the ground that the potential bad-faith claim in Tillis Trucking Co. was "too speculative"
Furthermore, the Madden Court's statement that a trial court could consider a potential claim as an asset in assessing a defendant's financial condition in relation to the size of a punitive-damages award was strongly criticized by two persuasive special writings in that case. Justice Houston wrote:
627 So.2d at 867 (Houston, J., concurring in the result) (emphasis added).
627 So.2d at 867 (Maddox, J., concurring in part and dissenting in part) (emphasis added).
I agree with the above-quoted assessments of the Madden Court's dictum. Without conducting a separate trial on the physician's third-party claim, there is simply no way to know how much worth, if any, should be placed on a potential bad-faith claim by the defendants against their liability-insurance carrier. As any plaintiff's lawyer can attest, the road from the accrual of a potential cause of action to the entry of a judgment and, eventually, collection of that judgment, can be a long one full of pitfalls and potential "exits." A great many obstacles — at least some of which would not become apparent until litigation actually commences — could prevent any recovery on such a claim, or at least prevent the amount of the recovery speculated to be "in the offing" by a trial court in some prior, collateral proceeding. Including a potential claim as part of a defendant's assets requires a trial court to transform itself from a fact-finder into something more akin to a fortune teller.
Aside from the speculative nature of such a claim in itself, there is a problem of timing. A punitive-damages award, like the award in any final judgment, is due as soon as the judgment becomes final. If the defendant cannot or does not voluntarily pay the award from its liquid assets, the plaintiff may seek immediately to execute upon the defendant's assets, both liquid and illiquid. On the other hand, any judgment to be obtained by the defendant upon a potential claim against its liability-insurance carrier would come a long time — perhaps years — after the current judgment is enforceable. Thus is raised the very real specter that a judgment intended by the law to "sting" a physician or other defendant will instead have the effect of financially destroying that physician or defendant. See Ex parte Vulcan Materials Co., 992 So.2d 1252, 1260 (Ala.2008) (noting that "[s]ociety's goal [in permitting punitive damages] is to deter — not to destroy — the wrongdoer" and that "[t]o effectuate that purpose, a punitive-damages award `"ought to sting in order to deter."'" (quoting Green Oil Co. v. Hornsby, 539 So.2d 218, 222 (Ala.1989), quoting in turn Ridout's-Brown Serv., Inc. v. Holloway,
On an even more fundamental plane, I offer two additional observations. First, any potential bad-faith claim the defendants may have against their liability insurer did not even exist until the judgment in this case was made. See Evans v. Mutual Assurance, Inc., 727 So.2d 66, 67 (Ala.1999) (stating that "a cause of action arising out of a failure to settle a third-party claim made against the insured does not accrue unless and until the claimant obtains a final judgment in excess of the policy limits"). As a corollary, the consideration of such a potential recovery creates a circularity of reasoning in which the court can, for all practical purposes, consider the availability of a third party to pay damages in whatever amount might be set. As one court has put it, because the potential claim "was not in existence before the jury entered its verdict, it could not be considered as part of [the defendants'] net worth in determining the amount of the award. Otherwise, the size of the punitive award could be unlimited...." Wransky v. Dalfo, 801 So.2d 239, 242 (Fla.Dist.Ct.App.2001) (emphasis omitted). As another court has explained, a potential claim against an insurer should not be considered in establishing a punitive-damages award because such an asset would make the insurer "responsible to pay damages in an amount that would never have been considered by the parties were the insurance company not the responsible entity." Battista v. Western World Ins. Co., 227 N.J.Super. 135, 151, 545 A.2d 841, 849 (N.J.Super.Law Div. 1988), rev'd in part on other grounds sub nom., Battista v. Olson, 250 N.J.Super. 330, 594 A.2d 260 (N.J.Super.App.Div.1991).
For all the foregoing reasons, trial courts should not be asked to divine the likelihood of a tortfeasor obtaining a judgment against a third party and the chances of the tortfeasor actually collecting on that judgment as part of the already complex and challenging task of assessing whether a punitive-damages award is appropriate in amount. I dissent on the basis of the inappropriateness of the consideration of a hypothetical third-party recovery in setting the proper amount of a punitive-damages award.
Tillis Trucking, 748 So.2d at 887-88.
