O'Shields v. Columbia Automotive Co. ( 2024 )

The Supreme Court of South Carolina
Daniel O'Shields and Roger W. Whitley, a Partnership
d/b/a O&W Cars, Petitioner,
v.
Columbia Automotive, LLC d/b/a Midlands Honda,
Respondent.
Appellate Case No. 2021-001388
ORDER
After careful consideration of Petitioner's petition for rehearing, the Court grants
the petition for rehearing, dispenses with further briefing, and substitutes the
attached opinion for the opinion previously filed in this matter.
s/ Donald W. Beatty CJ
s/ John W. Kittredge J.
s/ John Cannon Few J.
s/ George C. James, Jr. J.
s/ D. Garrison Hill J.
Columbia, South Carolina
May 22, 2024
cc: Brooks Roberts Fudenberg
C. Steven Moskos
Harry Clayton Walker Jr.
Sarah Patrick Spruill
James Y. Becker
The Honorable Jenny Abbott Kitchings
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Daniel O'Shields and Roger W. Whitley, a Partnership
d/b/a O&W Cars, Petitioner,
v.
Columbia Automotive, LLC d/b/a Midlands Honda,
Respondent.
Appellate Case No. 2021-001388
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Richland County
R. Ferrell Cothran Jr., Circuit Court Judge
Opinion No. 28194
Heard September 13, 2023 – Filed May 22, 2024
AFFIRMED
C. Steven Moskos, of C. Steven Moskos, PA, of North
Charleston; and Brooks Roberts Fudenberg, of the Law
Office of Brooks R. Fudenberg, LLC, of Charleston, both
for Petitioner.
James Y. Becker, of Haynsworth Sinkler Boyd, PA, of
Columbia; Sarah Patrick Spruill, of Haynsworth Sinkler
Boyd, PA, of Greenville; and Harry Clayton Walker Jr., of
Haynsworth Sinkler Boyd, PA, of Charleston, all for
Respondent.
JUSTICE KITTREDGE: We granted a writ of certiorari to review the court of
appeals' decision in O'Shields v. Columbia Automotive, L.L.C., 435 S.C. 319, 867
S.E.2d 446 (Ct. App. 2021). The primary issue before us is the court of appeals'
affirmance of the trial court's reduction of the punitive damages award. We affirm
the court of appeals.1
The facts are fully set forth in the court of appeals' opinion, so we provide only a
brief summary. In short, Respondent Midlands Honda, a South Carolina car
dealership, learned it had sold a car that consisted of two cars welded together—
known as a "clipped car." As a result, it re-purchased the car from the buyer.
Subsequently, Respondent sold the car "as is" through a North Carolina auction open
only to licensed car dealers.
Only four months prior, the auction's terms and conditions of sale changed to require
the disclosure of a car's damage, even when it is sold "as is." Respondent was
unaware of that new disclosure obligation as it did not receive written notice of the
rule change—despite the auction's policy mandating such notice. Accordingly,
Respondent did not affirmatively disclose the car's clipped condition. Instead,
Respondent relied on the "as is" nature of the auction sale.
At the auction, Petitioner O&W Cars, a North Carolina used car dealership,
purchased the car for $5,200. Petitioner did not discover the clipped nature of the
car in its inspection. Petitioner sold the car for $6,800. The purchaser subsequently
discovered the car's true, clipped condition and returned it to Petitioner.
Petitioner then sued Respondent for actual and punitive damages, asserting fraud
and unfair trade practices claims. The jury returned a verdict of $6,645 in actual
damages and $2,381,888 in punitive damages, equaling a 358:1 ratio of punitive to
actual damages. Pursuant to Respondent's post-trial motion, the trial court found the
punitive damages award constitutionally excessive in violation of Respondent's right
to due process and reduced the award to $46,515, representing a 7:1 ratio. The trial
court made several important factual findings regarding the evidence supporting the
punitive damages award. First, the trial court found Respondent had "a good-faith
basis for believing no duty to disclose exist[ed]." See BMW of N. Am., Inc. v. Gore,
1
We affirm the balance of the court of appeals' decision pursuant to Rule 220,
SCACR.
517 U.S. 559, 580 (1996) (stating a good-faith omission "of a material fact may be
less reprehensible than a deliberate false statement"). Second, "there is no evidence
that [Respondent] ever made a false representation." Third, this was an "isolated
incident." Finally, the trial court found "there was little, if any, chance of harmful
consequences to the [Petitioner]." The reduced punitive damages award was,
according to the trial court, the "upper limit of the range of punitive damages awards
consistent with due process" given the facts presented. See generally Browning-
Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 276 (1989) (noting
the Due Process Clause places "outer limits" on the size of civil damages awards);
Hollis v. Stonington Dev., L.L.C., 394 S.C. 383, 404, 714 S.E.2d 904, 915 (Ct. App.
2011) ("In reducing the amount of the punitive damages, . . . in deference to the jury,
we may do no more than determine the upper limit of the range of punitive damages
awards consistent with due process on the facts of this case, and set the amount of
punitive damages accordingly.").
As noted, the court of appeals affirmed the trial court's reduced punitive damages
award. Having carefully reviewed the record and governing federal and North
Carolina law, 2 we affirm and adopt the court of appeals' thorough analysis and
determination that the punitive damages award represents the highest award due
process allows considering the particular facts of this case. As a result, and as
explained more fully by the court of appeals, this case will be remanded to the trial
court for consideration of additional matters unrelated to the punitive damages
award.
AFFIRMED.
FEW, JAMES, and HILL, JJ., concur. BEATTY, C.J., concurring in result
only.
2
As fully explained in the court of appeals' decision, the parties and lower courts all
agree North Carolina's substantive law governs this dispute.