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Missouri Supreme Court Uncaps Punitive Damages
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Missouri Supreme Court Uncaps Punitive Damages

 

Missouri Supreme Court Uncaps Punitive Damages

(Jefferson City) – The Missouri Supreme Court struck down a law that capped punitive damages on September 9, 2014 when it awarded a $1 million verdict to an Excelsior Springs woman who was defrauded by a used car dealer.

The 77-year-old woman, Lillian Lewellen, bought a used Lincoln Town Car from Chad Franklin and Chad Franklin National Auto Sales North, LLC under the agreement that she would only have to pay $49 a month for the vehicle. The dealership heavily advertised the $49 deal, stating it would reimburse customers for the difference between bank loan payments and the $49 car payments.

Several months later, the dealership stopped reimbursing Lewellen and her payments to jumped to $387. One a fixed income of $900 a month, the woman could no longer keep up with the payments, causing the bank to repossess her car.

Lewellen filed action against Franklin and Franklin National for common law fraudulent misrepresentation and unlawful merchandising. In 2012, a jury awarded Lewellen actual damages of $25,000 and punitive damages of $1 million against both parties on both counts. A judge reduced the award by half, pursuant to a state law that limited some punitive damage awards at $500,000.

Because Lewellen filed claim as common law fraud, which dates back to 1820 when the first Missouri Constitution was signed, the Missouri Supreme Court determined the judge’s cap to be unconstitutional and reinstated the original jury-awarded verdict of $1 million.

Punitive damages can still be capped if a judge determines the award excessive or for causes of action created by the legislature, but the cap does not apply for common law causes of action that existed when the constitution was written.

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