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Diversified Holdings12/27/2002
INTRODUCTION
After a trial on claims of negligence and fraud, the trial court remitted the amounts of the jury's verdicts regarding both compensatory and punitive damages. The defendants have appealed and plaintiffs have cross-appealed, both challenging the amount of the damage awards. We affirm in part and reverse in part.
BACKGROUND
"On appeal, we recite the facts from the record in the light most favorable to the jury's verdict . . . ." State v. Daniels, 2002 UT 2, 2, 40 P.3d 611. This case arises from a real estate transaction in which the plaintiff, Diversified Holdings (Diversified), was manipulated into paying substantially more for a property than was necessary. Two of the defendants, Gilbert Turner (Turner) and Richard Knapp (Knapp), represented the purchase price of a building in which Diversified was interested as $785,000, when in fact a third defendant, University Properties, which was owned by Knapp, was acquiring that property (for the purpose of selling it to Diversified) for $700,000. Turner and Knapp informed Diversified that they would sell the property for $10,000 more than they had (through University Properties) paid for it, and persuaded Diversified to pay a higher price than it had expected. The final defendant, the Haws Companies Real Estate Services (Haws), employed both Turner and Knapp as real estate agents, failed to train or supervise them properly, and made little or no effort to correct their conduct even after its discovery of their fraudulent behavior. The undisputed testimony of two expert witnesses regarding the regulation of the real estate industry attributed to Haws numerous improprieties and oversights in supervision, training, and response to irregularities. Several weeks after the sale, Diversified became aware of problems associated with the purchase of the building and began the inquiries that culminated in this lawsuit.
A jury found all four defendants jointly and severally liable for fraud damages, and awarded negligence and punitive damages against each defendant individually. Upon the defendants' motion, the trial judge remitted the negligence and punitive damages against each defendant except Haws. On appeal, the defendants allege a number of errors by the trial court and argue that the remitted award remains excessive. The plaintiffs cross-appeal, arguing that the jury's original awards should be restored.
STANDARD OF REVIEW
The claims we reach here are governed by different standards of review. A trial judge's discretion under Utah Rule of Civil Procedure 59 to propose a remittitur of compensatory damages is considerable. Crookston v. Fire Ins. Exch., 817 P.2d 789, 803-804 (Utah 1991) (Crookston I). Having been present for all phases of the trial, the trial judge is in the best position to ascertain if the jury has "exceeded its proper bounds," and we will reverse "only if there is no reasonable basis for the decision." Id. at 804, 805 (citations omitted).
Awards of punitive damages are assessed with regard to the seven factors enumerated in Crookston I. Id. at 808. In light of the recent United States Supreme Court holding that federal due process requires de novo review of punitive damage awards appealed on constitutional grounds, Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432 (2001), we have adopted a de novo standard for reviewing both awards of punitive damages by juries and also adjustments of those awards by trial courts. Campbell v. State Farm Mut. Auto. Ins. Co., 2001 UT 89, 13, 432 Utah Adv. Rep. 44, cert. granted, 122 S. Ct. 2326 (U.S. June 3, 2002)(No. 01-1289).
We review a trial court's decision to admit or
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