Section 54 Requisite Knowledge

• Library: Damages 2012

Hoover’s Dairy, Inc. v. Mid-America Dairymen, Inc./Special Products, Inc., 700 S.W.2d 426 (Mo. banc 1985), involved an action by the purchaser of an automatic milking system against the distributor and seller to recover for negligent installation of the system. Actual damages as well as punitive damages were requested. The Court affirmed the $234,443 award of actual damages on the theory that a person who undertakes to render services for the benefit of another has a duty to exercise care apart from the defendant’s actual or constructive knowledge. On the other hand, the Court reversed the $1 million award of punitive damages. The Court, citing the comments to the Restatement (Second) of Torts § 500 (1965), stated that, while there was evidence of negligent conduct on the part of the defendants, punitive damages can be awarded in a negligence action “only when the defendant knew or had reason to know that there was a high degree of probability that the action would resultin injury.” Id. at 436. The Court found that there was no evidence in the record that suggested that either of the defendants knew or had reason to know that their claimed negligent acts posed an unreasonable risk that was highly probable to result in substantial injury to the plaintiff. Id.This knowledge factor is the “critical difference between negligence in order to establish liability and reckless conduct which would justify a punitive damage award.” Id.

In Lopez v. Three Rivers Electric Cooperative, Inc., 26 S.W.3d 151 (Mo. banc 2000), the plaintiff brought an action against a power company on behalf of victims of a helicopter crash arising when the helicopter flew into power lines over the Osage River. Id. at 154. While the claim asserted was based on the wrongful death statute, §§ 537.080 et seq., RSMo 2000 and Supp. 2011, which does not permit punitive damages as such, but rather damages for aggravating circumstances, see §§19.3 and 19.12, supra, the Court applied the principles governing punitive damages in negligence claims to the case. As noted in §19.53 above, the Court recognized the difficulty in applying the “complete indifference
or conscious disregard” standard in negligence cases. Lopez, 26 S.W.3d at 160. The Court opined, however, that several factors were instructive in determining whether exemplary damages are permissible in a given case. Id.Specifically, the Court stated:

Weighing against submission of punitive or aggravating circumstances damages are circumstances in which: prior similar...