United States District Court, D. Arizona
G. Campbell United States District Judge
the second order addressing Defendants' renewed motion
for judgment as a matter of law and motion for a new trial.
Docs. 568. The Court previously ruled on the motion with
respect to Defendants Charles Johnson, Pat Shanahan, Martha
Leon, and Mike Ilardo. Doc. 591. Although the Court addressed
issues involving Defendant David Zowine, it did not rule on
the liability and damages against David Zowine and his wife
because they had filed for bankruptcy. Doc. 590. Because the
bankruptcy stay has been lifted, the Court now resolves the
remaining issues as to the Zowines. Because the trial
concerned the conduct of David Zowine, and his spouse was
named only for community property purposes, the remainder of
this order will refer to Zowine in the singular.
Incorporation by Reference.
Court incorporates by reference much of its prior order (Doc.
591) as to Zowine, including the following sections: Section
I (background), Section II (legal standard), Section III
(statute of limitations), Section IV (causation), Section V
(fiduciary duty jury instructions), and Section VIII
(compensatory damages). The Court will address the punitive
damages issues that pertain to Zowine.
Punitive Damages under Rules 50 and 59.
argues that punitive damages are not appropriate because
Plaintiff failed to adduce sufficient evidence that his
conduct was “aggravated, outrageous, and performed with
an ‘evil mind.'” Doc. 568 at 9. Zowine seeks
relief under both Rules 50(b) and 59(a).
Rule 50, a court can overturn a jury verdict only if there is
no legally sufficient basis for the verdict. Costa v.
Desert Palace, Inc., 299 F.3d 838, 859 (9th Cir. 2002).
Under Rule 59(a), a court may appropriately consider a
party's claim of excessive damages, Molski v. M.J.
Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007), and
order a new trial if the award is contrary to the clear
weight of the evidence, Passantino v. Johnson &
Johnson Consumer Prods., 212 F.3d 493, 510 n.15 (9th
Court cannot conclude that the jury's assessment of
punitive damages against Zowine lacked a legally sufficient
basis or was contrary to the clear weight of evidence. As
described in Doc. 591, there was sufficient evidence to allow
the jury to conclude that Zowine's conduct was
aggravated, outrageous, and performed with an evil mind.
Zowine was responsible for Zoel's medical billing
division. Zowine supervised Defendants Charles Johnson and
Martha Leon, the two individuals who were chiefly implicated
in the medical billing fraud and whom the jury found
culpable. There was evidence that Zowine was involved in
covering up the medical billing fraud, and that he attempted
to frame other individuals, including Plaintiff and Richard
Plaintiff was investigating the medical billing fraud, Zowine
orchestrated and carried out a campaign to drive Plaintiff
from the business. Zowine engaged in repeated hostile,
demeaning, and profane actions toward Plaintiff, often in the
presence of others. Zowine, who is large and imposing,
physically assaulted Plaintiff, who is much smaller. Zowine
recruited Charles Johnson to organize and execute a
surreptitious office move. Zowine directed individuals to
remove computers from Zoel's office.
the evidence in the light most favorable to Plaintiff, the
jury reasonably could have concluded that Zowine's
conduct was aggravated, outrageous, and performed with an
evil mind. Plaintiff and Zowine were close friends and
business associates, and Zowine was even Plaintiff's best
man at his wedding. Zowine nonetheless plotted and executed a
campaign of intimidation and harassment intended to drive
Plaintiff from the business he co-owned with Zowine. This is
more than mere “deadlock and infighting.” Doc.
568 at 9. This is sufficient to support an award of punitive
Constitutionality of the Punitive Damages.
argues that the punitive damages award is constitutionally
excessive. Doc. 568 at 10-12. Zowine seeks remittitur or a
new trial for the punitive damages assessed against him.
purpose of punitive damages is not to compensate the
plaintiff, but to express society's disapproval of
outrageous conduct and to deter such conduct by the defendant
and others in the future.” Hawkins v. Allstate Ins.
Co., 733 P.2d 1073, 1080 (Ariz. 1987) (citations
omitted). The Due Process Clause of the Fourteenth Amendment
“imposes a substantive limit on the size of punitive
damages awards.” Honda Motor Co., Ltd. v.
Oberg, 512 U.S. 415, 420 (1994) (citations omitted). The
Supreme Court has provided three guideposts for courts to use
when reviewing punitive damages awards, only two of which are
relevant here: “(1) the degree of reprehensibility of
the defendant's misconduct; [and] (2) the disparity
between the actual or ...