Turner v. Firstar Bank, N.A.
845 N.E.2d 816, 363 Ill. App. 3d 1150, 300 Ill. Dec. 927 (2006)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the Due Process Clause of the Fourteenth Amendment, a punitive damages award is unconstitutionally excessive if it is grossly disproportionate to the compensatory damages, particularly when the defendant's reprehensible conduct resulted in purely economic harm and did not involve intentional malice, deceit, or a disregard for health and safety.
Facts:
- In 1994, the plaintiff obtained a car loan from Firstar Bank's predecessor.
- After several bank mergers, a dispute arose between the plaintiff and Firstar Bank, N.A. (the defendant) over the loan's remaining balance.
- On March 1, 2000, the plaintiff received the vehicle's title and a written confirmation from the defendant that her loan was paid in full.
- On March 11, 2000, Shamrock Recovery Service, acting on the defendant's orders, repossessed the plaintiff's car from her home.
- Despite the plaintiff showing law enforcement and Shamrock her title and paid-in-full letter, they refused to return the vehicle.
- On March 13, 2000, a branch manager for the defendant, after reviewing the plaintiff's documentation, declined to intervene, claiming a balance of approximately $300 was still owed.
- After the plaintiff's attorney intervened, the defendant authorized the car's release, but the plaintiff had to retrieve it from an impound lot where she discovered several personal items, including a laptop and camera, were missing.
- For the next two years, the defendant provided no substantive response to repeated inquiries from the plaintiff's attorney regarding the wrongful repossession and missing property.
Procedural Posture:
- The plaintiff sued Firstar Bank, N.A. (the defendant) and Shamrock Recovery Service, Inc. in the circuit court of Madison County for conversion.
- The trial court entered a default judgment against both defendants, awarding $25,000 in compensatory and $25,000 in punitive damages.
- The defendant, Firstar Bank, successfully moved to have the judgment against it vacated.
- The co-defendant, Shamrock, paid the $50,000 judgment in full, and the plaintiff filed a satisfaction of judgment as to Shamrock.
- The plaintiff's case for punitive damages against Firstar Bank proceeded to a jury trial.
- The jury returned a verdict against the defendant, assessing $500,000 in punitive damages.
- The defendant filed post-trial motions, which were denied, and then appealed the jury's verdict to the Illinois Appellate Court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a $500,000 punitive damages award, which represents a 20:1 ratio to the $25,000 in compensatory damages, violate the Due Process Clause of the Fourteenth Amendment where the defendant's conduct was reprehensible but did not cause physical harm?
Opinions:
Majority - Presiding Justice Spomer
Yes, a punitive damage award of $500,000 is unconstitutionally excessive under the Due Process Clause. To assess the constitutionality of a punitive damages award, the court applies the three guideposts from State Farm Mutual Automobile Insurance Co. v. Campbell: (1) the degree of reprehensibility of the defendant's conduct, (2) the disparity between the harm and the award, and (3) comparable civil penalties. Here, the defendant's conduct was reprehensible due to its systemic failures, management's awareness of these issues, and its wanton disregard for the plaintiff's rights. However, the harm was purely economic, not physical, and did not involve intentional malice or deceit, making it less reprehensible than conduct in other cases justifying high-ratio awards. The 20:1 ratio between the punitive ($500,000) and compensatory ($25,000) damages significantly exceeds the single-digit ratio generally considered the constitutional limit. The third guidepost on comparable penalties was not helpful. Therefore, the award is reduced to $225,000, a 9:1 ratio, which is constitutional and appropriate given the facts.
Analysis:
This decision illustrates the application of the Supreme Court's framework in State Farm v. Campbell to limit excessive punitive damage awards. It clarifies that even with highly reprehensible corporate conduct, the ratio between punitive and compensatory damages remains a critical constitutional check, especially when the harm is purely economic. The case reinforces that a defendant's wealth cannot justify an otherwise unconstitutional award, but it can be considered in setting a deterrent amount within constitutional bounds. This provides lower courts with a concrete example of how to balance the factors of reprehensibility and proportionality, setting a precedent for reducing jury awards that exceed a single-digit ratio without evidence of exceptional circumstances like physical harm or intentional malice.
