In Guariglia v. Price Chopper Operating Co., Inc. , William I. Schady III, a pharmacist, brought a vial of Valium and codeine to his girlfriend's apartment. After her two year old accessed Schady's duffle bag, consumed the drugs and died, Schady pled guilty to criminally negligent homicide.
When a wrongful death case was later filed, Schady's attorney sent a letter to an unidentified "manager" of Price Chopper , expressing Schady's belief that the company was obligated to defend him in the lawsuit and that "unless we hear from you to the contrary, we will assume that Price Choppers [sic] has assumed the responsibility for defending and indemnifying [defendant], and we need do nothing further."
Schady failed to appear before the Schenectady County Supreme Court and a default judgment was entered against him.
In his absence, the court awarded Schady's opponent $75,000 in compensatory damages, $250,000 for pain and suffering, and $1,000,000 in punitive damages. When Schady's motion to vacate that judgment was later denied, he appealed to the Appellate Division, Third Department, which only reversed the punitive damages component and remanded the case for a hearing on that limited issue, whereupon the Supreme Court subsequently awarded $750,000.
Punitive damages are appropriate when a defendant's actions show a conscious and wanton or reckless disregard of the rights of others. It is a form of relief which is intended to punish a wrongdoer and further seeks to deter others from engaging in such misconduct in the future.
When evaluating the reasonableness of a punitive damage award, appellate courts will give considerable deference to the following factors:
- the degree of the conduct's reprehensibility;
- any disparity between the actual damages suffered and the punitive damages awarded; and,
- the difference between the punitive damages awarded in the case under appeal and those awarded in other similar cases.
Upon affirming the $750,000 award, the AD3 concluded that Schady's conduct "evinced an indifference" to the safety of others, that the punitive relief was less than three times the amount of actual harm suffered (which the court determined to be an acceptable ratio), that the sun was comparable to other similar cases, and not so outrageous as to suggest that it was "actuated by passion."
Interestingly, the AD3 noted that although Schady had surrendered his New York license, he continues to work as a pharmacist in New Jersey.
There's a lot of heat in this Schade(y)….
You can read the case in its entirety at: Guariglia v. Price Chopper Operating Co., Inc.