Punitive damages award reduced in defamation case

Listen to this article

Where a jury awarded $1 in compensatory damages and $200,000 in punitive damages on a defamation claim, a motion for remittitur is granted. The award is reduced to $25,000.

Background

The parties are both dentists. Brown hired Grundy in 2013 and terminated him in 2018. Each sued the other. Both claimed and counterclaimed, among other things, defamation per se and breach of contract.

“Dr. Grundy has moved for judgment notwithstanding the verdicts seeking judgment be entered in his favor on the Brown PC’s claim for breach of contract, and that he be granted additur on his claim for attorney’s fees on his Count V claim for breach of contract.

“The Brown PC has moved that judgment in its favor be entered on Dr. Grundy’s Count IV breach of contract claim and for other relief as deemed proper.

“Additionally, Dr. Grundy has moved for remittitur of the punitive damages award against him on Dr. Brown’s Count V claim for defamation per se.”

Contract claims

“Both Dr. Grundy and Dr. Brown alleged that the other breached the contract between them in several ways. The verdict form completed by the Jury did not require the Jury to identify the specific breaches upon which the verdicts were based, complicating the determination of who breached first.

“One possibility is that the Jury found that the Parties breached at the same time and, therefore, neither was the first to breach. Another – and perhaps more likely – justification for the Jury’s verdicts is that they found both Parties had breached the contract in some way, but that none of the breaches were material.

“This may account for the Jury award of only nominal damages and their rejection of any defense based on a first material breach. This result would be consistent with the instructions given to the Jury.

The instructions on the breach of contract claims did not require the proponent of the claim to prove that a breach was material in order to prevail on that claim.

“However, the Jury was instructed that the defense of first breach required proof of a material breach by proponent of that defense. As there exists evidence in the record which supports the Jury finding that both Dr. Grundy and the Brown PC committed breaches of contract which were not material, the Court denies the motions to set aside the verdicts on the claims of breach of contract.

“Additionally, the Court denies any request for additur with respect to recovery of attorney’s fees which were not awarded by the jury.”

Punitive damages

“Dr. Grundy claims that the award of $200,000 in punitive damages is so excessive, particularly when compared to the award of $1.00 in compensatory damages, so as to suggest that the award did not result from a fair and impartial decision by the Jury. …

“Dr. Brown’s and the Brown PC’s defamation claim was predicated upon statements made by Dr. Grundy in a complaint to the Board of Dentistry.

“In that complaint, Dr. Grundy stated that ‘Patients are paying higher copays due to changing of procedure codes, paying extra fees for material(s) in addition to contracted insurance fees, having their non-destroyed PHI thrown into the dumpster daily, not being contacted when breach of all patient records were ransomed, having physical injuries occur due to untrained staff, theft of paid implant components, voiding implant warranties by placing cheaper non-brand components.’ …

“The Jury found that one or more of these statements were false and defamatory, that Dr. Grundy had abused any privilege he had to make these statements, and that Dr. Grundy made the statements knowing they were false or made them so recklessly as to amount to a willful disregard for the truth.”

Excessive amount

“The Court now turns to the factors that must be considered when determining whether an award of punitive damages is excessive. Dr. Brown did not present evidence to quantify the amount of damages he sustained as a result of Dr. Grundy’s complaint to the Board of Dentistry.

“Consequently, the Jury awarded nominal damages of $1.00. The Jury imposed punitive damages of $200,000. While ‘there are no rigid benchmarks that a punitive damages award may not surpass,’ and greater ratios are permissible when the amount of economic damages is small, hard to detect or difficult to determine, an award that is 200,000 times the amount of compensatory damages must be based upon conduct that is ‘particularly egregious.’ …

“The evidence at trial … supports the Jury’s finding that Dr. Grundy made a confidential complaint to the licensing authority about Dr. Brown knowing that the complaint was false or with reckless disregard for the truth of the allegations, and that he did so out of spite, or with the intent to injure Dr. Brown. Dr. Grundy did not publish the false statements to Dr. Brown’s patients, the public or anyone outside of a regulatory agency. …

“However, the Court did not receive any evidence to suggest that these allegations did – or could – threaten revocation of Dr. Brown’s license to practice dentistry or cause interruption in Dr. Brown’s or the Brown PC’s ability to treat patients and earn income, even if the allegations had been believed. The Court did not receive evidence that Dr. Brown or his practice expended any significant amount of time or money in refuting the false claims. The false complaint did not threaten physical harm. …

“The Court also considers that the maximum fine for making a false statement to law enforcement is $2500, and the same maximum fine applies to a felony conviction for perjury. …

“[T]he Court determines that the degree of reprehensibility of filing this false complaint is low and that Dr. Grundy’s act in doing so, while wrongful, was not ‘particularly egregious.’ The award of $200,000 in punitive damages is excessive, …violates the Due Process Clause of the Fourteenth Amendment and is impermissible under the First Amendment. …

“Accordingly, Dr. Grundy’s Motion for Remittitur is granted. The Court orders Dr. Brown to remit all but $25,000 of the defamation punitive damages award.”

Grundy v. Brown, Record No. CL-2018-18098, Aug. 9, 2022, Fairfax County Circuit Court (Devine). Alan B. Croft for plaintiff; Brian V. Ebert for defendant. VLW 022-8-054, 11 pp.