§64.2 Allowable in Breach of Warranty Claim

§64.2 Allowable in Breach of Warranty Claim

The Case: Mohr v. DaimlerChrysler Corp. , No. W2006-01382-COA-R3-CV, 2008 WL 4613584 (Tenn. Ct. App. Oct. 14, 2008).

The Basic Facts: The defendant automobile manufacturer appeals the verdict of the jury awarding, inter alia, punitive damages.

The Bottom Line:

• "DCC argues that it is entitled to a new trial on the punitive damage claim because the jury's verdict could have been based on a breach of warranty and Tennessee law does not allow the recovery of punitive damages for a breach of contract." 2008 WL 4613584 at *14.
• "Int (sic) this case, the jury was presented with three independent theories of liability: (1) strict liability, (2) negligence, and (3) breach of the implied warranty of fitness and merchantability. The jury returned a verdict for the plaintiff with respect to each theory of liability and then answered yes to this question: Do you find that the plaintiffs proved by clear and convincing evidence that the Defendant's conduct was intentional or reckless?" Id.
• "DCC's position is that the finding of intentional and reckless conduct may have applied only to the breach of warranty claim. Therefore, we can't be sure that the punitive damage award was for the tort claims rather than the contract claim. See Concrete Spaces, Inc. V. Sender, 2 S.W.3d 901 (Tenn. 1999). Id. at *15.
• "We find this argument to be unpersuasive for two reasons. First, the jury clearly awarded damages for the tort claims and the finding of intentional and reckless conduct appears to apply to all three theories of recovery. Verdicts should be construed in a manner that upholds the jury's findings, Concrete Spaces, at 911. Therefore, we conclude that the jury found intentional and reckless conduct on the part of DCC for all the theories of recovery." Id.
• "In the second place, even if the intentional and reckless finding only applied to the breach of warranty claim, that finding would place this case in the class of cases where the courts have found an exception to the rule that no punitive damages may be awarded for breach of contract. In Medley v. A.W. Chesterson Co., 912 S.W.2d 748 (Tenn. Ct. App. 1995) the Court said:

As to the issues relative to the directed verdict as to the punitive damages feature of the breach of contract claim, we first note that as a general rule punitive damages are not proper in breach of contract cases. Bland v. Smith, 197 Tenn. 683, 277 S.W.2d 377 (1955);Johnson v. Woman's Hospital, 527 S.W.2d 133 (Tenn. App. 1975). There are exceptions, however, in cases involving 'fraud, malice, gross negligence or oppression.' Bryson v. Bramlett, 204 Tenn. 347, 321 S.W.2d 555 (1958), quoting from Louisville, N. & G.S.R. Co. V. Guinan, 79 Tenn. 98 (1883)."

Id.

• "We think the Court recognized that where a defendant breached a contract with conduct that would entitle the plaintiff to punitive damages, the punitive damage claim would not be defeated simply because the action was on the contract." Id.

---