Disagreement with Car Dealer Leads to $100,000 Punitive Damage Award, Reversed on Appeal

In Yovan v. Lithia Motors, Inc. — P.3d —-, 2009 WL 704737 (Or.App. 2009), the Oregon Court of Appeal reviewed a trial court’s remittitur of a $100,000 punitive damages verdict arising out of a dispute surround a car dealer’s sale of a vehicle.

This case involves a complaint filed by plaintiff to rescind defendant’s purchase of a car from plaintiff based on a theory of mutual mistake and counter-claims by defendant for compensatory and punitive damages based on the federal Motor Vehicle Information and Cost Savings Act, 49 USC §§ 32701-32711, unlawful trade practices under ORS 646.605 to 646.656, unlawful debt practices under ORS 646.639 to 646.641, and violations of the state and federal Racketeer Influenced and Corrupt Organizations Acts. The trial court found in favor of plaintiff on its claim for rescission. The jury found in favor of defendant on his claim under the Oregon Unlawful Debt Collections Practices Act but rejected his other claims. The jury awarded defendant $500 in noneconomic damages for “emotional injury” and $100,000 in punitive damages. Plaintiff then moved for a new trial on damages or, in the alternative, remittitur to reduce the amount of the punitive damages award. The trial court granted plaintiff’s motion for remittitur, ruling that the maximum constitutionally permissible punitive damages award based on the facts of the case was $2,000.

The Court of Appeal affirmed the remittitur to $2,000, explaining:

Based on the above determinations, I conclude that the jury’s punitive damage award of $100,000 is grossly excessive. The next step is to determine the highest amount that defendant can recover that still comports with due process. That task requires this court to consider, for purposes of the Gore guide-posts, where plaintiff’s conduct falls on the scale of conduct that could warrant the award of punitive damages. Goddard, 344 Or at 262. I return to the considerations under the second and the third guide-posts. As noted above, I have no basis to compare legislative sanctions, because the jury’s award is the sanction contemplated by the legislature. The degree of reprehensibility of plaintiff’s conduct, while significant, is not egregious. As to the amount of emotional harm caused by plaintiff’s conduct, the jury’s verdict informs me that the emotional damage to defendant caused by plaintiff is relatively minimal, particularly in comparison to the award approved in Waddill. Balancing all of the relevant factors discussed above, I conclude that any amount in excess of a four-to-one ratio would constitute a grossly excessive award that would serve no legitimate purpose and if upheld, would constitute an arbitrary depriva-tion of plaintiff’s property. Accordingly, I would hold that the trial court did not err in reducing defendant’s punitive damage award to $2,000 or a four-to-one ratio.