A college student in Wyoming nearly died after a malfunctioning furnace in her rental apartment seeped carbon monoxide (CO) into her unit. Rushed to the hospital after a maintenance worker discovered the problem by chance, she now suffers lifelong neurological damage.
In Lompe v. Sunridge Partners, the woman sued the owner of the apartment as well as the property manager, alleging these entities had been negligent in their duty to ensure the rental unit was in reasonably safe condition for residents.
At trial, she was awarded a total of $28.5 million – which included $25.5 million in punitive damages. The majority of that was apportioned to the property manager, though the out-of-state property owner was still liable for $3 million in total worth of compensatory and punitive damages. On appeal, the U.S. Court of Appeals for the Tenth Circuit drastically lowered that amount. First, it determined there wasn’t enough evidence to show property owner should be liable for punitive damages. Second, it reduced the amount of punitive damages against the property management company from $22.5 million down to $1.95 million.
Punitive damages are those that exceed simple compensation to plaintiff and are intended to punish the defendant for particularly egregious actions.
Punitive damages in South Carolina are dictated by S.C. Code § 15-32-510, and plaintiffs must ask for them in the initial complaint. Jurors are tasked with determining whether punitive damages are appropriate, and may only do so if plaintiff shows by clear and convincing evidence that the harm suffered was the result of defendant’s willful, wanton and reckless conduct.
If a jury finds that punitive damages are appropriate in a given personal injury lawsuit, they can award up to three times the amount of the compensatory damages or up to $500,000 – whichever is greater. However, a plaintiff could potentially receive more if the alleged wrongful conduct was motivated by unreasonable financial gain and there was a high likelihood of injury as a result OR if defendant’s conduct is considered a felony under state law. In those situations, plaintiff may receive up to four times the amount of compensatory damages, or $2 million – whichever is more.
In the Lompe case, similar laws in Wyoming dictate the award of punitive damages there. In that situation, when the property owners had first purchased the site, they were aware that some of the units needed updated HVAC systems and they set aside $150,000 to carry out those updates and repairs on an as-needed, rolling basis. They then entrusted the property management firm to carry out the day-to-day operations of the site.
Records showed there had been at least three prior incidents involving excess CO levels – including one incident in which an employee suffered CO poisoning. Although the HVAC systems in each rental unit were checked to make sure they were functional at least once annually, maintenance staff had not been trained and did not know how to check to see if there were potential issues that could lead to CO poisoning.
Further, while the property owner relied exclusively on property manager to inform them of emergency purchases or potential safety issues, there is no evidence the property management firm made any HVAC-related emergency purchases or informed the property owner of any CO-related issues – including the poisoning of an employee.
It was also later revealed after the incident in which plaintiff suffered CO poisoning that many of the units – including hers – did not have working CO detectors.
The appeals court ruled that while punitive damages against the property management company were appropriate, such damages against the property owner were not.
Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.
Lompe v. Sunridge Partners, April 1, 2016, U.S. Court of Appeals for the Tenth Circuit
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