Compensatory damages of $140,000 are upheld in the case of the sale of property in New Hampshire containing contaminated drinking water, but the $5-million portion of the award is found to be "excessive."

01:00 AM EDT on Wednesday, June 30, 2004

BY EDWARD FITZPATRICK
Journal Staff Writer

PROVIDENCE -- A judge has wiped out most of a $5.14-million jury award against Fleet Bank, saying that figure far exceeds the damage done to a New Hampshire family that bought a general store with contaminated drinking water.

Fleet was accused of auctioning off the Olde Spofford General Store in Spofford, N.H., in 1995, less than two months after learning that the property's drinking water was contaminated by chemicals from the mill next door.

Stephen, Dana and Tamara Foote filed suit in Rhode Island because Fleet was incorporated here and Fleet's property manager was based here. Since then, Fleet has been taken over by Bank of America.

On April 15, a Superior Court jury found Fleet liable for intentional fraud and breach of contract, awarding $140,000 in compensatory damages and $5 million in enhanced compensatory damages, which marked the largest jury award in Rhode Island since 2002.

In a decision filed June 25, Judge Francis J. Darigan Jr. upheld the $140,000 but threw out the $5-million portion of the award, saying, "This court, having independently weighed the evidence, finds a reasonable jury could not have reasonably awarded $5 million in [this] case, as it is clearly excessive in light of the harm and accompanying aggravation suffered by plaintiffs."

Darigan said he will allow a new trial -- limited to the issue of enhanced compensatory damages -- unless the plaintiffs file a remittitur within 10 days. A remittitur is the process by which a court reduces or proposes to reduce the damages awarded in a jury verdict.

The case involved the application of New Hampshire law, which allows enhanced compensatory damages for acts "accompanied by aggravation, insult, oppression or malice."

While Fleet argued that enhanced damages weren't warranted in this case, Darigan disagreed, saying, "The evidence upon which the plaintiffs rely, namely the aggravation and frustration of living in a house they hated and the aggravation of having to boil water and shower elsewhere, are exactly those damages for which enhanced compensatory damages were intended."

But Darigan noted the enhanced award of $5 million was nearly 36 times the compensatory award of $140,000, saying that "tremendous disparity" warranted a review of similar cases.

The judge found that the New Hampshire Supreme Court affirmed an award of $343,000 for a man whose wife shot him in the face at close range. And he found that the New Hampshire Supreme Court upheld a $500,000 award for a man who received extensive injuries when assaulted by several police officers.

While there's no doubt the Footes "suffered aggravation and certain financial difficulties," Darigan wrote, "even in the aggregate, these inconveniences -- including boiling water, hating the house in which they lived, showering at friends' homes, having their dreams of owning a home become a nightmare -- do not rise to the acute level of damages in the two cases previously mentioned."

Darigan said that in instructing the jury, he made it clear that enhanced damages were meant as compensation -- not punishment. But now it's clear, he said, that the jury "was influenced by passion and prejudice in returning a clearly punitive damage award." He said the $5-million award "shocks the conscience of this court."

A spokesman for the Footes' law firm, Joseph Choquette III, said no decision has been made on what to do next. "We are still considering what this means," he said of Darigan's decision. A spokesman for Bank of America could not be reached for comment.

Even before Darigan's decision, the case had been split into two trials. The first trial dealt with fraud, breach of contract and consumer protection claims, while the second trial will deal with claims of intentional infliction of emotional distress, battery and personal injury.

The Footes won't receive any money until Darigan enters a judgment in the case. Fleet argued that judgment shouldn't be entered until the second trial concludes, while the Footes said there is no reason to delay. Darigan decided not to enter judgment now, noting the two trials are based on the same set of facts.

In asking the judge to throw out some of the claims "as a matter of law," Fleet argued that the Footes "failed to establish intent to deceive or malice, an element necessary to award enhanced damages."

Fleet presented evidence that a Post-It note with the name and number of the Footes' lawyer was placed on the environmental report detailing the contamination. "Based on that note," Darigan wrote, "two plausible explanations for the failure to disclose may be articulated: (1) the note was inadvertently overlooked or (2) the note was consciously disregarded."

The Footes presented evidence that Fleet dropped the price of the property after receiving the environmental report and that, at auction, Fleet described the property as clean and did not disclose the contamination. "Without considering the credibility of witnesses or weighing the evidence," Darigan wrote, "a reasonable person could infer that the defendants wanted to rid themselves of the problems associated with the property and did not disclose the contamination to easily effectuate that goal."

"Given reasonable persons could reach different conclusions based on the evidence presented by both parties, judgment as a matter of law must be denied," Darigan stated.