The Missouri Supreme Court brushed by the legislature’s limits on punitive damages this week, saying they don’t apply to a $1 million verdict a jury awarded to an Excelsior Springs woman.
The woman, Lillian M. Lewellen, received the judgment in 2012 after she was defrauded by car dealer Chad Franklin.
Lewellen had purchased a used Lincoln Town Car after being told she would have to make payments of only $49 a month. Yet after several months, she learned she would have to pay $387 a month.
After a Clay County jury ordered Franklin to pay Lewellen $1 million in punitive damages, a judge cut the judgment in half, citing a state law that capped some punitive damage awards at $500,000.
The Supreme Court restored the judgment because Lewellen had filed her claim as a common law fraud, which has existed in Missouri since the first state constitution was written. Because of that, the legislature cannot limit a jury’s ability to set punitive damage amounts, the court ruled in a unanimous decision.
Liberty attorney Doug Noland, who represented Lewellen, noted that punitive damage caps remain in place for causes of action created by the legislature, such as human rights cases and awards for some deceptive merchandising practices.
“But if it’s a common law cause of action that existed in 1820, when our constitution was written, this cap does not apply,” Noland said.
Kansas City lawyer Bernard Brown, who specializes in automobile fraud cases, noted that even in common law cases, judges still can limit punitive damages if they find them “excessive.”
Still, he said the ruling was encouraging.
“If you don’t have effective law enforcement,” Brown said, “sizable punitive damages are important.”
A lawyer representing Franklin, who no longer is in business, referred questions to public relations spokesmen representing the defendant’s insurance company.
They could not be reached for comment.