Among the 7th Circuit opinions posted today is JUAREZ v. MENARD, INC., an appeal from the ND Ind, Hammond Division, Judge Lozano. In an opinion affirming the district court, Judge Rovner writes:
Menards, a chain of home improvements stores operates under a business model which combines warehouse with retail store. Customers make their selections from merchandise displayed on lower shelves and excess merchandise is stored on shelves high above. Consequently, employees at Menards often use machinery to load and unload merchandise from high shelves at the same time that customers are shopping in the store.Access the Indiana Law Blog's June 2, 2003 coverage of the Cheatham decision here and access a pdf version of the opinion here. Posted by Marcia Oddi at April 26, 2004 12:22 PMOn January 19, 2002, two Menard employees were stocking doors in the millwork department of a Menards in Schererville, Indiana, when the doors they were stocking onto a high shelf on one side of an aisle pushed up against a steel door perched on a storage shelf high above the adjacent aisle. The steel door fell from its shelf, hitting Maria Juarez, and, according to Juarez, broke four vertebrae in her back, and caused head injuries, blurred vision, and permanent back and neck injuries.
Juarez filed a complaint in the district court invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332, and seeking compensatory and punitive damages for her injuries. * * *
Juarez does not challenge the jury’s verdict awarding her $385,000 in compensatory damages as unsatisfactory, and theoretically at least, she has been made whole by that award. Punitive damages, however, go beyond compensating a tort victim for a cognizable wrong. They are designed to deter and punish wrongful activity, and as such, are quasi-criminal in nature. Cheatham v. Pohle, 789 N.E.2d 467, 471 (Ind. 2003). Under Indiana law, which we must apply in this diversity action, (see Erie R.R. Co. v. Tompkins, 304 U.S 64, 78 (1938)) civil plaintiffs have no right to receive punitive damages. Cheatham, 789 N.E.2d at 472. And, in fact, the Indiana General Assembly has demonstrated a disinclination toward allowing unchecked punitive damages awards by enacting legislation that limits the amount of money a plaintiff may receive from a punitive damages award (Ind. Code § 34-51-3-6) and by requiring that a plaintiff establish the facts warranting an award of punitive damages by clear and convincing evidence rather than the usual preponderance of the evidence standard. Ind. Code § 34-51-3-2. Thus in Indiana, before a court may award punitive damages, a plaintiff must demonstrate by clear and convincing evidence that the defendant acted with malice, fraud, gross negligence or oppressiveness that was not the result of mistake of fact or law, honest error of judgment, overzealousness, mere negligence, or other human failing. [cites deleted] Moreover, a trier of fact is not required to award punitive damages even after finding all of the facts necessary to justify the award. Cheatham, 789 N.E.2d at 472. The requirements for an award of punitive damages, therefore, go far above and beyond those required for a finding of negligence. Menard does not dispute that it was negligent in allowing this accident to happen. It argues, however, that it did not have the requisite intent needed for an award of punitive damages. * * *
Menard admitted liability for the accident and a jury awarded Juarez $385,000 in compensatory damages for her injuries. The only question presented by this appeal then is whether Menard acted with malice, fraud, gross negligence or oppressiveness which was not the result of mistake of fact or law, honest error or judgment, overzealousness, mere negligence or other human failing. Although Menard’s failure to protect customers from falling merchandise pushed by employees loading stock in an adjacent aisle was, as Menard admits, negligent, it did not constitute the type of willful and wanton or quasi-criminal conduct for which punitive damages may be assessed. Consequently we AFFIRM the decision of the district court.