Vicarious liability and punitive damages: PATTERSON V. TOMMY BLAIR, INC. (COA 11/30/2007)

PATTERSON V. TOMMY BLAIR, INC.
DAMAGES: Punitive damages against principal

2006-CA-001587
TO BE PUBLISHED: AFFIRMING
PANEL:  VANMETER PRESIDING; ACREE, ROSENBLUM CONCUR
COUNTY: MCCRACKEN
DATE RENDERED: 11/30/2007

Patterson appeals TC’s grant of summary judgment against him on his punitive damages claim against the Defendant Courtesy. Patterson had sued Courtesy over an incident in which the son of Courtesy’s owner pulled a gun on Patterson and shot out his vehicle’s tires during an attempted repossession of the vehicle that had been purchased from Courtesy. The son was convicted of wanton endangerment. At trial on the claims of assault and vicarious liability, the TC refused to instruct the jury on punitive damages against either Courtesy or Blair, Jr. Patterson obtained a judgment of $42.4K+ against both. Courtesy appealed, and the COA (2001-CA-02057-MR and 2001-CA-002107-MR) held that the evidence did not support a vicarious liability claim against Courtesy, but also held that the punitive damages claim with respect to Blair, Jr. should have been submitted to the jury. The Kentucky Supreme Court had the finally word, and reversed the COA by reinstating the jury verdict against Courtesy. On remand, the judgment against both was satisfied and the case proceeded on the resurrected punitives claim. The TC later dismissed Blair, Jr. from the action based on his bankruptcy discharge and then granted summary judgment to Courtesy since it held Patterson did not have sufficient evidence to recover punitives against Courtesy as the employer under KRS 411.184(3) or (2).

The COA began by rejecting Patterson’s first argument that the TC had incorrectly held that he bore the burden of proving the existence of a material issue of fact contrary to the summary judgment stanard. Patterson had simply misinterpreted the TC’s inartful but correct statement in its opinion that Patterson bore the ultimate burden of proving that he was entitled to punitives under the statute. Patterson secondly argued that a factual question existed as to whether Blair authorized, ratified or should have anticipated Blair, Jr.’s conduct. While Blair, Sr. knew of the dispute between Courtesy and Patterson and knew that Blair, Jr. had taken it upon himself to repossess the vehicle, the COA held that this evidence did not demonstrate that Blair, Sr. ever authorized Blair, Jr. to use the type of conduct employed in the repossession. The COA also rejected the argument that Courtesy ratified the conduct when it did not officially discipline or reprimand Blair, Jr. for the incident, instead pointing to Blair, Sr.’s disapproval of the conduct and his suggestion for Blair, Jr. to turn himself into the police. Courtesy’s retention of the vehicle obtained in the repossession also did not amount to ratification of the means employed in the COA’s opinion. Concerning anticipation, the COA rejected Patterson’s argument that testimony from Blair, Jr.’s friends that he usually carried a handgun all the time, coupled with Blair, Sr.’s awareness of his son’s prior repossessions, created a genuine issue of material fact since there was no evidence that Blair, Jr. had ever previously used any gun in an inapproriate manner during those repossessions. The COA therefore affirmed the TC’s grant of summary judgment.

Note that the COA declined to review the TC’s burden of proof imposed on Patterson that required him to prove not only that Courtesy authorized, ratified or should have anticipated Blair, Jr.’s conduct under KRS 411.184(3), but also that both Blair, Jr. AND Courtesy independently acted toward him with oppression, fraud or malice under 411.184(2). As section (3) is essentially a punitive damages claim against the employer under vicarious liability principles, it seems reasonable to require a claimant to first prove that the employee acted toward him with oppression, fraud or malice because the employer is liable only if it authorizes, ratifies or should have anticipated such conduct. However, the TC also essentially required Patterson that Courtesy itself had acted toward him with oppression, fraud or malice, which in most cases will prove to be a higher burden and is arguably inconsistent with the stated burden in 411.184(3).

Chad Kessinger
Schiller, Osbourn, Barnes & Maloney

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