Summary
In White v. Benkowski, 37 Wis.2d 285, 155 N.W.2d 74 (1967), the Wisconsin supreme court stated the general rule that punitive damages are not recoverable in actions for breach of contract.
Summary of this case from Benlo Chemicals, Inc. v. Buckman LaboratoriesOpinion
November 29, 1967. —
December 22, 1967.
APPEAL from a judgment of the circuit court for Milwaukee county: MARVIN C. HOLZ, Circuit Judge. Reversed in part.
For the appellants there was a brief and oral argument by Stephen J. Hajduch of Milwaukee. For the respondents there was a brief and oral argument by Francis X. Swietlik, Jr., of Milwaukee.
This case involves a neighborhood squabble between two adjacent property owners.
Prior to November 28, 1962, Virgil and Gwynneth White, the plaintiffs, were desirous of purchasing a home in Oak Creek. Unfortunately, the particular home that the Whites were interested in was without a water supply. Despite this fact, the Whites purchased the home.
The adjacent home was owned and occupied by Paul and Ruth Benkowski, the defendants. The Benkowskis had a well in their yard which had piping that connected with the Whites' home.
On November 28, 1962, the Whites and Benkowskis entered into a written agreement wherein the Benkowskis promised to supply water to the White home for ten years or until an earlier date when either water was supplied by the municipality, the well became inadequate, or the Whites drilled their own well. The Whites promised to pay $3 a month for the water and one-half the cost of any future repairs or maintenance that the Benkowski well might require. As part of the transaction, but not included in the written agreement, the Whites gave the Benkowskis $400 which was used to purchase and install a new pump and an additional tank that would increase the capacity of the well.
Initially, the relationship between the new neighbors was friendly. With the passing of time, however, their relationship deteriorated and the neighbors actually became hostile. In 1964, the water supply, which was controlled by the Benkowskis, was intermittently shut off. Mrs. White kept a record of the dates and durations that her water supply was not operative. Her record showed that the water was shut off on the following occasions:
(1) March 5, 1964, from 7:10 p.m. to 7:25 p.m.
(2) March 9, 1964, from 3:40 p.m. to 4:00 p.m.
(3) March 11, 1964, from 6:00 p.m. to 6:15 p.m.
(4) June 10, 1964, from 6:20 p.m. to 7:03 p.m.
The record also discloses that the water was shut off completely or partially for varying lengths of time on July 1, 6, 7, and 17, 1964, and on November 25, 1964.
Mr. Benkowski claimed that the water was shut off either to allow accumulated sand in the pipes to settle or to remind the Whites that their use of the water was excessive. Mr. White claimed that the Benkowskis breached their contract by shutting off the water.
Following the date when the water was last shut off (November 25, 1964), the Whites commenced an action to recover compensatory and punitive damages for an alleged violation of the agreement to supply water. A jury trial was held. Apparently it was agreed by counsel that for purposes of the trial "plaintiffs' case was based upon an alleged deliberate violation of the contract consisting of turning off the water at the times specified in the plaintiffs' complaint." Accordingly, in the special verdict the jury was asked:
Trial court's decision — motions after verdict.
"Question 1: Did the defendants maliciously, vindictively or wantonly shut off the water supply of the plaintiffs for the purpose of harassing the plaintiffs.?"
The jury was also asked:
"Question 2: If you answered Question 1 `Yes,' then answer this question:
"(a) What compensatory damages did the plaintiffs suffer?
"(b) What punitive damages should be assessed?"
Before the case was submitted to the jury, the defendants moved to strike the verdict's punitive-damage question. The court reserved its ruling on the motion. The jury returned a verdict which found that the Benkowskis maliciously shut off the Whites' water supply for harassment purposes. Compensatory damages were set at $10 and punitive damages at $2,000. On motions after verdict, the court reduced the compensatory award to $1 and granted defendants' motion to strike the punitive-damage question and answer.
Judgment for plaintiffs of $1 was entered and they appeal.
Two issues are raised on this appeal.
1. Was the trial court correct in reducing the award of compensatory damages from $10 to $1?
2. Are punitive damages available in actions for breach of contract?
Reduction of Jury Award.
The evidence of damage adduced during the trial here was that the water supply had been shut off during several short periods. Three incidents of inconvenience resulting from these shut-offs were detailed by the plaintiffs., Mrs. White testified that the lack of water in the bathroom on one occasion caused an odor and that on two other occasions she was forced to take her children to a neighbor's home to bathe them. Based on this evidence, the court instructed the jury that:
". . . . in an action for a breach of contract the plaintiff entitled to such damages as shall have been sustained by him which resulted naturally and directly from the breach if you find that the defendants did in fact breach the contract. Such damages include pecuniary loss and inconvenience suffered as a natural result of the breach and are called compensatory damages. In this case the plaintiffs have proved no pecuniary damages which you or the Court could compute. In a situation where there has been a breach of contract which you find to have damaged the plaintiff but for which the plaintiffs have proven no actual damages, the plaintiffs may recover nominal damages.
"By nominal damages is meant trivial — a trivial sum of money."
Plaintiffs did not object to this instruction. In the trial court's decision on motions after verdict it states that the court so instructed the jury because, based on the fact that the plaintiffs paid for services they did not receive, their loss in proportion to the contract rate was approximately 25 cents. This rationale indicates that the court disregarded or overlooked Mrs. White's testimony of inconvenience. In viewing the evidence most favorable to the plaintiffs, there was' some injury. The plaintiffs are not required to ascertain their damages with mathematical precision, but rather the trier of fact must set damages at a, reasonable amount. Notwithstanding this instruction, the jury set the plaintiffs' damages at $10. The court was in error in reducing that amount to $1.
The jury finding of $10 in actual damages, though small, takes it out of the mere nominal status. The award is predicated on an actual injury. This was not the situation present in Sunderman v. Warnken. Sunderman was a wrongful-entry action by a tenant against his landlord. No actual injury could be shown by the mere fact that the landlord entered the tenant's apartment, therefore damages were nominal and no punitory award could be made. Here there was credible evidence which showed inconvenience and thus actual injury, and the jury's finding as to compensatory damages should be reinstated.
(1947), 251 Wis. 471, 29 N.W.2d 496.
Punitive Damages.
"If a man shall steal an ox, or a sheep, and kill it, or sell it; he shall restore five oxen for an ox, and four sheep for a sheep."
Exodus 22:1.
Over one hundred years ago this court held that, under proper circumstances, a plaintiff was entitled to recover exemplary or punitive damages. Kink v. Combs is the most recent case in this state which deals with the practice of permitting punitive damages. In Kink the court relied on Fuchs v. Kupper and reaffirmed its adherence to the rule of punitive damages.
McWilliams v. Bragg (1854), 3 Wis. 377 (*424).
(1965), 28 Wis.2d 65, 135 N.W.2d 789.
(1963), 22 Wis.2d 107, 125 N.W.2d 360.
In Wisconsin compensatory damages are given to make whole the damage or injury suffered by the injured party. On the other hand, punitive damages are given
Malco v. Midwest Aluminum Sales (1961), 14 Wis.2d 57, 66, 109 N.W.2d 516.
". . . on the basis of punishment to the injured party not because he has been injured, which injury has been compensated with compensatory damages, but to punish the wrongdoer for his malice and to deter others from like conduct."
Id.
Thus we reach the question of whether the plaintiffs are entitled to punitive damages for a breach of the water agreement.
The overwhelming weight of authority supports the proposition that punitive damages are not recoverable in actions for breach of contract. In Chitty on Contracts, the author states that the right to receive punitive damages for breach of contract is now confined to the single case of damages for breach of a promise to marry.
Annot. (1933), 84 A.L.R. 1345, 1346.
1 Chitty, Contracts (22d ed. 1961), p. 1339.
Simpson states:
"Although damages in excess of compensation for loss are in some instances permitted in tort actions by way of punishment . . . in contract actions the damages recoverable are limited to compensation for pecuniary loss sustained by the breach."
Simpson, Contracts (2d ed. hornbook series), p. 394, sec. 195.
Corbin states that as a general rule punitive damages are not recoverable for breach of contract.
5 Corbin, Contracts, p. 438, sec. 1077.
In Wisconsin, the early case of Gordon v. Brewster involved the breach of an employment contract. The trial court instructed the jury that if the nonperformance of the contract was attributable to the defendant's wrongful act of discharging the plaintiff, then that would go to increase the damages sustained. On appeal, this court said that the instruction was unfortunate and might have led the jurors to suppose that they could give something more than actual compensation in a breach of contract case. We find no Wisconsin case in which breach of contract (other than breach of promise to marry) has led to the award of punitive damages.
(1858), 7 Wis. 309 (*355).
Simpson v. Black (1870), 27 Wis. 206.
Persuasive authority from other jurisdictions supports the proposition (without exception) that punitive damages are not available in breach of contract actions. This is true even if the breach, as in the instant case, is wilful.
White, Inc. v. Metropolitan Merchandise Mart, Inc. (1954), 48 Del. 526, 107 A.2d 892; Thompson v. Mutual Benefit Health Accident Asso. (D.C. Iowa 1949), 83 F. Supp. 656; Cain v. Tuten (1950), 82 Ga. App. 102, 60 S.E.2d 485; Mabery v. Western Casualty Surety Co. (1952), 173 Kan. 586, 250 P.2d 824; Bland v. Smith (1955), 197 Tenn. 683, 277 S.W.2d 377.
McDonough v. Zamora (Tex.Civ.App. 1960), 338 S.W.2d 507; Holt v. Holt (Tex.Civ.App. 1954), 271 S.W.2d 477; Chelini v. Nieri (Cal. 1948), 188 P.2d 564.
Although it is well recognized that breach of a contractual duty may be a tort, in such situations the contract creates the relation out of which grows the duty to use care in the performance of a responsibility prescribed by the contract. Not so here. No tort was pleaded or proved.
Colton v. Foulkes (1951), 259 Wis. 142, 47 N.W.2d 901; Presser v. Siesel Construction Co. (1963), 19 Wis.2d 54, 119 N.W.2d 405; Peterson v. Sinclair Refining Co. (1963), 20 Wis.2d 576, 123 N.W.2d 479.
38 Am. Jur., Negligence, p. 661, sec. 20.
By the Court. — Reversed in part by reinstating the jury verdict relating to compensatory damages and otherwise affirmed. Costs to appellants.