Alyeska Pipeline Service Co. v. Anderson

MATTHEWS, Justice,

dissenting.

I disagree with the majority opinion concerning the motion for remittitur or new trial. I would hold that the damages arrived at by the jury were so excessive that the trial judge abused his discretion in denying the motion.

In reviewing trial court decisions on motions for remittitur or new trial, the appropriate standard of review was articulated in National Bank of Alaska v. McHugh, 416 P.2d 239, 244 (Alaska 1966), as follows:

We have held that the granting or refusing of a request for a new trial is discretionary with the trial judge. We do not interfere in the exercise of that discretion except in the most exceptional circumstances and to prevent a miscarriage of justice. In order for us to hold that the trial judge has abused his discretion, we would have to be left with the definite and firm conviction on the whole record that the judge made a mistake in • refusing to order a remittitur or grant a new trial in response to appellant’s motion. [footnotes ommitted].

A few cases illustrate under what circumstances this court will overturn the trial court’s refusal to order a remittitur or grant a new trial. In City of Nome v. Ailak, 570 P.2d 162 (Alaska 1977), the appel-lees brought a civil action in tort against the city and city police officers for false arrest, false imprisonment and trespass. The trial court awarded damages of $10,-000.00 for the trespass, $45,000.00 for the false arrest and $45,000.00 for the false imprisonment. After holding that the trespass was privileged and that there was no basis for the $45,000.00 apiece for the false arrest and false imprisonment because they are not separate torts, we ruled that the remaining $45,000.00 awarded to Ailak for false arrest was clearly excessive and without support in the evidence. Noting that there was no evidence of any physical injury to Ailak and only scant evidence of emotional distress, we held that the refusal to order a remittitur of the award of $45,-000.00 in compensatory damages for the detention was an abuse of discretion.

Sturm, Ruger & Co., Inc. v. Day, 594 P.2d 38 (Alaska 1979) was a products liability case in which the buyer of a single-action revolver shot himself in the leg while unloading. Day was awarded compensatory damages of $137,750.00 and punitive damages of $2,895,000.00. Noting that the punitive damage award of $2,895,000.00 was so far out of proportion to the amount of actual damages as to suggest that the jury’s award was the result of passion or prejudice, we held that it was a mistake and an abuse of discretion for the trial judge not to have reduced the punitive damages or to have ordered a new trial.¹

In Alyeska Pipeline Service v. Aurora Air Service, 604 P.2d 1090 (Alaska 1979), we directed the superior court to order a remit-titur or grant a new trial because the jury had arrived at the damage amount in an improper manner. Aurora alleged that Alyeska had intentionally interfered in its contractual relationship with Radio Corporation of America and submitted evidence of two different figures representing its losses due to termination of the contract. One figure was the specific loss stemming from the cessation of the contract and the other was the loss of projected earnings. The latter figure included the former. When it became evident that the jury had erroneously added together these two figures in arriving at its damage award, we concluded that the superior court had abused its discretion in failing to grant the motion for remittitur or new trial.

Reviewing the record in the present case leaves me with a firm conviction that the trial judge abused his discretion in failing to order a remittitur or grant a new trial. It is clear that the jury either arrived at its damage award in an inappropriate manner or simply ignored the evidence and awarded an excessive amount.

The basic principle of damages is that the damaged party should be put in the position in which he would have been but for the tort. Restatement (Second) of Torts § 901, Comment a, (1977). Here if Alyeska had never touched the plaintiffs’ property, plaintiffs at best could have been selling about 200 tons of rock per year at about $80.00 per ton which would mean that they would gross around $16,000.00 per year. This sum need not be offset for extraction costs under the harsh rule of damages. What sum is necessary to produce $16,-000.00 per year forever? It depends on the interest rate of course; 7.5% is certainly fair from the plaintiffs’ standpoint. If that rate is used the total award should not exceed $240,000.00. Because this sum is so at variance with the $1,900,000.00 actually awarded I do not think that the award can be allowed to stand.²

This result is not inconsistent with Beau-lieu v. Elliott, 434 P.2d 665, 671-72 (Alaska 1967). There we held that tort recovery for loss of future wages should not be discounted to present value due to 1) the predictable impact of inflation, and 2) the probability of “wage increases that the injured plaintiff might have expected to receive in the future had he not been injured.” The latter justification we interpreted in State v. Guinn, 555 P.2d 530, 546 (Alaska 1976), to refer to “those non-scheduled salary increases and bonuses that are granted as one ‘progresses in his chosen occupation’ in terms of skill, experience and value to the employer.” Furthermore, in Alaska Airlines, Inc. v. Sweat, 568 P.2d 916, 933 (Alaska 1977) we noted that “[wjhile the first reason may be of questionable validity, the constantly increasing wage factor still justifies the Beaulieu result.” I read these cases as limiting the rule of Beaulieu to the loss of future earnings in personal injury actions since that is the only area in which the second justification exists. This was apparently the conclusion of the court in City of Whittier v. Whittier Fuel & Marine Corp., 577 P.2d 216, 226 (Alaska 1978) where we stated:

Beaulieu has limited applicability to contract cases; and we decline to follow it in damage awards for loss of future profits since the impact of inflation on the profit margin is unclear. Receipt of the profits prior to the time they would have accrued but for the breach allows an opportunity for investment of the same.

Since it is clear to me that the jury award of $1,900,000.00 is excessive and can not be supported by any reasonable interpretation of the evidence, I would remand this case to the superior court with directions to order a remittitur or a new trial.

1 . On rehearing, we held that the punitive award was not the result of passion or prejudice, but was simply an excessive verdict and that the award should be reduced to $500,-000.00 rather than $250,000.00 as set in the first opinion. Sturm, Ruger & Co., Inc. v. Day, 615 P.2d 621, 624 (Alaska 1980).

2 . Even the $240,000.00 figure is extremely favorable to the plaintiffs. They had sold, in total, over the 13 year period they owned this claim prior to trial, only 34 tons of rock for which they had received gross receipts totalling approximately $ 1,620.00. Most of this material was quarried after Alyeska’s taking, which raises the question of whether there does not remain sufficient rock to fulfill the reasonable requirements of the Fairbanks market for this type of rock for the indefinite future. There is no other evidence in the record on this point. In my view, using sales projections based on the rock’s value as decorative stone is unrealistic in this case because as a practical matter it could never be sold at such prices in the quantities involved here.