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COURT OF APPEALS
DECISION
DATED AND RELEASED
MARCH 25, 1997
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NOTICE
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats.
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This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports.
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No. 95-2867
STATE
OF WISCONSIN IN
COURT OF APPEALS
STEPHEN P. GIANOLI,
NANCY L. GIANOLI,
RICHARD A. CARLSON and
GENEVIEVE A. CARLSON,
Plaintiffs-Respondents,
v.
JOHN RONALD PFLEIDERER
and
MARGO
ELLEN PFLEIDERER,
†Defendants-Appellants.
APPEAL from a judgment
of the circuit court for St. Croix County:
ROBERT H. RASMUSSEN, Judge. Affirmed
in part; reversed in part and cause remanded.
Before Cane, P.J., Myse
and Carlson, JJ.
CARLSON, J. John and Margo Pfleiderer appeal a judgment
awarding compensatory and punitive damages as well as injunctive relief to the
respondents in this
dispute between neighboring property owners.
The Pfleiderers claim the court erroneously awarded compensatory and
punitive damages against them, improperly made the punitive damages
conditional, and imposed unreasonable restrictions on the use of their land as
part of the injunctive relief. The
Pfleiderers also assert that the trial court improperly dismissed their
counterclaims.
We conclude that there
is sufficient evidence in the record to support the compensatory damage award
in this case. We also conclude that the
punitive damages assessed were appropriate.
However, we reverse that part of the injunctive relief enjoining the
parties from excluding each other from the portion of their properties between
the ordinary low and high water marks.
Finally, we conclude that the Pfleiderers' counterclaims were properly
dismissed. Accordingly, the judgment is
affirmed in part and reversed in part.
FACTS
The parties in this case
are adjoining landowners in the St. Croix Cove subdivision in the town of Troy,
Wisconsin. The subdivision contains a
permanent easement over the Pfleiderer lot for "ingress and egress for
driveway purposes only, forever" for the benefit of the adjoining lots,
owned by the respondents.
The relationship between
the Pfleiderers and the respondents deteriorated early. In fact, this is not the first legal
skirmish involving these parties. A
previous round of litigation on other issues reached this court in 1993. See Pfleiderer v. St. Croix
Board of Adjustment, No. 93-0396 (Wis. Ct. App. Aug 17, 1993).
This initial round of
litigation did nothing to ameliorate the relationship between the parties. Further disputes arose concerning the
cutting of vegetation, river diversion and erosion, interference with beach use
and the violation of construction regulations.
The Pfleiderers also stored numerous vehicles on their property, which
the respondents allege interfered with their use of the driveway easement. In addition, the Gianolis alleged that the
Pfleiderers interfered with their attempts at refinancing their home, going so
far as to send unflattering materials to lenders and others. Finally, disputes arose concerning a variety
of obnoxious behavior on the part of the Pfleiderers, including surveillance,
unwanted telephone calls, stalking and other generally harassing conduct.
Respondents brought this
action originally seeking injunctive and declaratory relief under a variety of
causes of action. The complaint was
twice amended, adding an action for invasion of privacy. In their amended complaints, respondents
sought declaratory and injunctive relief as well as compensatory and punitive
damages. The Pfleiderers
counterclaimed, alleging that the respondents violated various federal, state
and local construction regulations.
Following a trial to the
court, the court announced judgment in favor of respondents on their claims for
invasion of privacy and intentional infliction of emotional distress. The court made findings on the record and
issued additional written findings of fact and conclusions of law. The court granted various forms of
injunctive relief and awarded compensatory damages as follows:
Genevieve Carlson $5,000
Richard Carlson $1,000
Nancy Gianoli $3,000
Stephen
Gianoli $3,000
The
court also assessed punitive damages totalling $200,000 ($50,000 for each
respondent) against John Pfleiderer.
The court found that John's actions were outrageous and that the
Pfleiderers' explanations for those actions were totally incredible and
unworthy of belief.
In awarding punitive
damages, the trial court found that the Pfleiderers were fully capable of
paying the punitive damages based upon their financial status. However, the trial court stayed enforcement
of the punitive damages for a period of one year and directed that if the
Pfleiderers sold their home, closed on the sale, and vacated the property
within one year, the punitive damages award would be vacated. The trial court dismissed the counterclaims
with prejudice.
COMPENSATORY
DAMAGES
We first address the
issue whether the evidence supported the compensatory damages award. We will not disturb a court's compensatory
damages award if there is any credible evidence to support the award. Lundin v. Shimanski, 124
Wis.2d 175, 195, 368 N.W.2d 676, 686 (1985).
The trial court awarded compensatory damages based on both the invasion
of privacy and the intentional infliction of emotional distress claims:
And I
want the record to be clear that if an appeals court were to find that there is
an insufficient quantum of evidence to support the burden of proof with regard
to the invasion of privacy claim or for some reason that ground is not
sufficient or that the intentional infliction of the mental distress ground is
insufficient, that it is this court's opinion that those compensatory damages are
appropriate regardless of whether they are based on one cause of action or two
causes of action or insofar as Mr. and Mrs. Gianoli go, three causes of
action.
This
oral statement and its written counterpart make clear that if the evidence is
sufficient in either or both of the claims for relief, the compensatory damages
must be upheld.
However, the Pfleiderers
on appeal challenge only the sufficiency of the evidence for the claim of
intentional infliction of emotional distress.
They have not challenged either the amount or propriety of the compensatory
damages on the invasion of privacy claim.
Because the court made clear that its compensatory damages award applied
to either cause of action, the Pfleiderers' failure to challenge the invasion
of privacy claim is fatal to their attack on the compensatory damages
award. Therefore, the compensatory
damages award must stand, and we could end our inquiry here. Nonetheless, because of the role these
allegations play in the issue of punitive damages, we believe it is appropriate
to review the evidence supporting the intentional infliction of emotional
distress claim.
Four factors must be
established for an injured person to recover under a claim for intentional
infliction of emotional distress:
1. The conduct was intended to
cause emotional distress;
2. The conduct was extreme and
outrageous;
3. The conduct was a cause of
the person's emotional distress, and;
4. The
emotional distress was severe and disabling.
See Alsteen
v. Gehl, 21 Wis.2d 349, 359-60, 124 N.W.2d 312, 318 (1963); Wangen
v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437 (1980). The third factor is not in dispute. We will examine each factor raised by the
Pfleiderers.
The Pfleiderers first
contend that their actions were not extreme and outrageous. In order for conduct to reach the standard
of being extreme and outrageous, that conduct must be such that an average
member of the community would find it to be a complete denial of the
individual's dignity as a person. Alsteen,
21 Wis.2d at 359-60, 124 N.W.2d at 318.
Mere carelessness or bad manners is insufficient. Id. at 360, 124 N.W.2d at
318. The Alsteen court
stated that the policy behind these standards was the respect for the human
personality. Id. at 358,
124 N.W.2d at 317. A person who treats
another as an object and deliberately manipulates, humiliates, or scorns that
person, should be compelled to compensate that person for any disabling
emotional response caused by the conduct.
Id.
The trial court made
extensive oral and written findings of fact concerning the Pfleiderers'
conduct. We accept these findings
unless they are clearly erroneous.
Section 805.17(2), Stats. The court found that the Pfleiderers
attempted to derail the Gianolis' refinancing of their home, going so far as to
send negative and unflattering information concerning the Gianolis to lenders
and others. They also engaged in near
constant surveillance of and harassment concerning the respondents. The court also found that John Pfleiderer
stalked and followed the respondents without justification and that the
Pfleiderers' explanation for their behavior was totally incredible and unworthy
of belief. We conclude that these
findings, which are not clearly erroneous, support the trial court's conclusion
that the Pfleiderers' conduct was extreme and outrageous.
We next turn to the
question whether the respondents' distress was severe and disabling. In order for distress to meet this standard,
it must be such that the person was unable to function in other
relationships. Alsteen,
21 Wis.2d at 360-61, 124 N.W.2d at 318.
If the conduct merely caused temporary discomfort, recovery must be
disallowed. Id. at 361,
124 N.W.2d at 318. We conclude that the
evidence supports the trial court's conclusion that all of the respondents'
distress was severe and disabling.
Genevieve Carlson
testified that the confrontational situations caused her heart rate and
breathing to accelerate to the point where she had to lie down to recover. She also testified to insomnia, depression,
fatigue and anxiety. Richard Carlson
testified that he had seen a change in his wife's behavior and personality
since the confrontations began.
Nancy Gianoli testified
that she experienced insomnia, migraine headaches, "asthmatic type"
attacks, extreme muscle tension, muscle spasms and indigestion. She further testified that these conditions
began when the confrontations with the Pfleiderers started. Stephen Gianoli also testified as to
headaches, pain in his arms, diarrhea, insomnia and depression, particularly
during the period when he was trying to refinance his home.
Richard Carlson
testified that his "level of anxiety" has risen considerably and that
he is constantly concerned for his wife's safety, going so far as to change his
business practices to avoid leaving his wife alone. While his condition creates a closer question than that of the
other respondents, we agree that the distress described is severe and disabling
under the circumstances. Significantly,
the trial court recognized the less severe nature of his distress and awarded a
lesser sum of damages.
Finally, regarding the
first factor, the Pfleiderers assert that they did not intend to cause the
respondents emotional distress. The
trial court, however, found that there was "compelling evidence" that
the Pfleiderers intended to cause the respondents emotional distress. We conclude that the Pfleiderers' conduct,
recited above, supports the inference that the Pfleiderers intended to cause
the respondents' emotional distress.
This court will not
disturb the trial court's judgment if there is any credible evidence in the
record to support it. Shawver v.
Roberts Corp., 90 Wis.2d 672, 681, 280 N.W.2d 226, 230 (1979). We consider the above evidence sufficient to
support the compensatory damages award on the intentional infliction of
emotional distress claim. Because the
Pfleiderers have not challenged the award on the invasion of privacy claim and
because the trial court made clear that its compensatory damages award applied
to either cause of action, we need not address this issue further.
PUNITIVE
DAMAGES
The Pfleiderers next
claim that the court in this case could not award punitive damages because the
respondents requested equitable relief.
The Pfleiderers assert that a court in equity does not have the power to
impose punitive damages. We conclude
that it is not necessary to resolve this issue because we conclude that the
court awarded punitive damages based upon the respondents' actions for
intentional infliction of emotional distress and invasion of privacy, which are
actions at law.
The respondents'
original complaint alleged numerous equitable claims, but also stated a cause
of action for intentional infliction of emotional distress. The second amended complaint added another
action at law for invasion of privacy.
Both complaints requested compensatory and punitive damages on these
causes of action. The court in its
decision made clear that it was awarding the punitive damages "because of
[Mr. Pfleiderer's] extreme outrageous conduct," and not upon the equitable
causes of action contained in the complaints.
Because the punitive damages were awarded pursuant to the respondents'
actions at law, we conclude that such damages were available to the trial court
in this case.
Having determined that
punitive damages are available, we now turn to the question whether the court
appropriately awarded punitive damages.
We will not overturn a punitive damages award if there is any credible
evidence in the record to support it. Weiss
v. United Fire & Cas. Co., 197 Wis.2d 365, 398, 541 N.W.2d 753, 765
(1995).
The foundation for a
punitive damage award is proof of outrageous conduct by the wrongdoer. Brown v. Maxey, 124 Wis.2d
426, 431, 369 N.W.2d 677, 680 (1985).
Outrageous conduct is conduct that is malicious or in wilful or reckless
disregard of the plaintiff's rights. Wangen,
97 Wis.2d at 275, 294 N.W.2d at 446. We
have previously described the Pfleiderers' conduct. We are satisfied that it was outrageous, malicious and in reckless
disregard of the respondents' rights. We therefore conclude that the trial court
did not err by awarding punitive damages.
Next we consider the
amount of punitive damages awarded by the court. In determining the appropriate amount of punitive damages, a
trial judge must apply the same factors a jury would apply. White v. Ruditys, 117 Wis.2d
130, 142, 343 N.W.2d 421, 426 (Ct. App. 1983).
Those factors are the grievousness of the wrongdoer's acts, the degree
of malicious intent, the potential damage that might have been caused by such
acts as well as the actual damage caused, and the defendant's ability to
pay. Id. We have previously summarized the
Pfleiderers' conduct, the intentions behind their actions, and the grievous
effects it had on the respondents. The
trial court explicitly found the Pfleiderers' conduct to be extreme and
outrageous and specifically found the Pfleiderers capable of paying the
award. We are satisfied that the trial
court considered the necessary factors in determining the amount to be awarded,
and that the award is supported by the evidence.
The Pfleiderers next
assert that the punitive damages award is unconstitutionally excessive. The due process clause of the Fourteenth
Amendment imposes substantive limits on the size of punitive damage
awards. TXO Produc. Corp. v.
Alliance Resources Corp., 509 U.S. 443, 453-54 (1993); Management
Computer Servs. v. Hawkins, Ash, Baptie & Co., 206 Wis.2d 157, 192,
557 N.W.2d 67, 81 (1996). Punitive
damages can properly be imposed to further a state's interests in punishing and
deterring wrongdoing. Id.
at 192, 557 N.W.2d at 82.
A punitive damages award
is excessive and therefore unconstitutional if it is more than is necessary to
serve the purposes of punitive damages, or inflicts a penalty or burden on the
defendant that is disproportionate to the wrongdoing. Id. at 192, 557 N.W.2d at 81. In BMW of North America v. Gore,
116 S.Ct. 1589 (1996), the United States Supreme Court articulated three
factors for reviewing a punitive damage award in light of the constitutional
proscriptions: the degree of reprehensibility of the wrongdoer's conduct, the
relationship of the amount of actual harm to the punitive damages, and the
comparable civil or criminal penalties available for such conduct. Id. at 1598-1603; see also Management
Computer, 206 Wis.2d at 193, 557 N.W.2d at 82. We will examine each consideration in turn.
The degree of
reprehensibility is manifest in light of the court's findings on John
Pfleiderer's conduct. John engaged in
acts of intentional misconduct; these were not mistakes or mere acts of
negligence. His explanations were
specifically found to be unworthy of belief.
We conclude that his conduct was sufficiently reprehensible to warrant
imposition of the $50,000 in punitive damages for each respondent.
We turn next to the
relationship or ratio of the actual damages to the punitive damages. The essential concept is that there should
be a reasonable relationship between the amount of the punitive damages award
and the amount of the compensatory damages award, which represents the actual
harm caused by the wrongdoer's conduct.
TXO, 509 U.S. at 460.
We have often stated that there is no bright line or mathematical
formula for calculating punitive damage awards. Management Computer, 206 Wis.2d at 193-94, 557
N.W.2d at 82.
In BMW the
court found the 500 to one ratio in favor of Gore was excessive. The ten to one ratio in TXO
was not. The Wisconsin Supreme Court in Management
Computer rejected an award over twenty-five times the amount awarded as
compensatory damages, but approved an award ten times greater. Id. at 195, 557 N.W.2d at
83. Here the punitive damages are
fifteen times the compensatory damages.
However, the court found the Pfleiderers' actions in this case to be
particularly outrageous. As stated in BMW:
[L]ow
awards of compensatory damages may properly support a higher ratio than high
compensatory awards, if, for example, a particularly egregious act has resulted
in only a small amount of economic damages.
A higher ratio may also be justified in cases in which the injury is
hard to detect or the monetary value of noneconomic harm might have been
difficult to determine.
Id. at
1602. Given the court's findings of
extreme outrageous conduct, we conclude that the higher ratio was well within
the court's discretion. This is not a
situation in which a runaway jury awarded mind-boggling punitive damages that
require a reining in by a judge. See
Wangen, 97 Wis.2d at 306-07, 294 N.W.2d at 461. Here the court acted as the trier of fact
and made extensive findings as to the Pfleiderers' actions and the degree to
which these actions were outrageous.
The punitive damages award was certainly intended to "sting"
in order to make John Pfleiderer think about his past and potential future
conduct. This is entirely
appropriate: Our supreme court has
stated that an award of "Punitive damage[s] ought to serve its
purpose." Malco, Inc. v.
Midwest Alum. Sales, 14 Wis.2d 57, 66, 109 N.W.2d 516, 521 (1961).
The final indicium of
excessiveness is to compare the punitive damages award and the civil or
criminal penalties that could have been imposed for comparable misconduct. Many of the Pfleiderers' activities could be
construed as violations of state law.
Stalking is a violation of § 940.32, Stats. A first offense is a Class A misdemeanor
punishable by a fine of $10,000 and nine months in jail. A second offense within seven years is a
Class E felony punishable by a fine of $10,000 and two years in prison. Defamation, a violation of § 942.01 Stats., is also a Class A
misdemeanor. Trespass to land, a
violation of § 943.13, Stats.,
is a Class B forfeiture, punishable by a forfeiture of $1,000. The court found that the Pfleiderers
committed several of these violations a number of times. Each act could also have resulted in various
other civil forfeitures. Given the
significant financial and incarceration penalties that might have been invoked,
we conclude that the financial aspect of the punitive damages award is not
excessive.
In sum, we are convinced
that the award imposed in this case is not grossly excessive and does not
violate constitutional limitations. We
therefore reject the Pfleiderers' constitutional claims.
Next, the Pfleiderers
contend that the court did not have sufficient evidence before it to adequately
determine their ability to pay the punitive damages award. However, the respondents presented evidence
to the court showing John Pfleiderer is independently wealthy, does not need to
hold employment, and has a substantial net worth. Furthermore, the Pfleiderers had full opportunity to present
evidence of their ability to pay, and in fact did present a financial statement
to the court detailing their financial status.
If the Pfleiderers believed there were other financial considerations
important to the court's decision, they had the opportunity and obligation to
present those factors to the court.
Failing to do so, they cannot complain that the court based its decision
on the evidence before it.
The next issue we
consider is whether the trial court had the power to make the punitive damages
award conditional. This presents a
question of law that this court reviews de novo. See Ball v. District No. 4 Area Bd., 117 Wis.2d
529, 537, 345 N.W.2d 389, 394 (1984). The
court in this case stayed enforcement of the collection of the punitive damages
against the Pfleiderers for a period of one year. The court indicated that in the event the Pfleiderers sold and
moved from their property within that period, the punitive damages award would
be vacated. The court's stated
intention was to "divorce," or separate, the parties to prevent
future disputes.
We find it difficult to
understand why the Pfleiderers would object to being given an alternative to
the punitive damages. Certainly, if a
trial court properly determines that punitive damages should be imposed, no
factual or legal objection exists to the effort to ameliorate their effects by
providing a means of avoiding them. The
trial court could have simply awarded the punitive damages. The Pfleiderers would then have no
alternative but to pay the award. The
mere act of providing a means to avoid the damages does not make granting them
improper.
We also find no fault
with the court's stated intention to "divorce," or separate, the
parties. This is the essence of the
flexibility allowed a court in equity to fashion an appropriate remedy. Under the unique circumstances of this case,
the conditional punitive award was a reasoned and appropriate exercise of the
trial court's discretion to fashion an appropriate remedy.
RESTRICTIONS ON THE PFLEIDERERS' USE OF
THEIR PROPERTY
The court found the
Pfleiderers had created a private nuisance with respect to the number of
vehicles stored on the property, interfering with the respondents' use of the
driveway easement. As part of its
injunctive relief, the court limited the number and type of vehicles the
Pfleiderers' could store on the property.
The Pfleiderers assert that the court's judgment has insufficient
evidentiary support. This court will
accept the court's findings of fact unless they are clearly erroneous, §
805.17(2), Stats., and will not
overturn the court's judgment if there is any credible evidence in the record
to support it. Krueger v.
Mitchell, 112 Wis.2d 88, 104-05, 332 N.W.2d 733, 742 (1983).
A private nuisance is
defined as "an unreasonable interference with the interests of an
individual in the use and enjoyment of land." Bubolz v. Dane County, 159 Wis.2d 284, 298, 464
N.W.2d 67, 73 (Ct. App. 1990). "The activity complained of must create more than an
inconvenience and must be offensive to a person of ordinary and normal
sensibilities." Id.
The court heard
testimony from the respondents and others regarding the manner in which the
Pfleiderers parked cars and other vehicles on their lot and the way in which
they were stored. The testimony alleged
a substantial interference with the respondents' ability to use the driveway
easement. We conclude that these facts,
which are not clearly erroneous, establish the existence of a private
nuisance. We also conclude that the
court's injunctive relief was an appropriate remedy aimed at abating the
nuisance.
The trial court also
enjoined the parties from excluding each other from that portion of their
riverfront properties between the ordinary high and low water marks. The Pfleiderers assert that this injunction
was improper because their property extends to the actual water line. This presents a question of law this court
reviews de novo.
We conclude that the
court properly determined that under the public trust doctrine, the state, not
the parties, holds title to the beds underlying navigable waters in trust for
all of its citizens. See State
v. Trudeau, 139 Wis.2d 91, 101, 408 N.W.2d 337, 341 (1987). This includes the area on the shore within
the high water mark. Id.
at 103, 408 N.W.2d at 342. However, the
court failed to consider the limited right of a riparian owner to exclude the
public from that area. A riparian owner
may prohibit access if doing so does not interfere with the public's
navigational rights. State v.
McFarren, 62 Wis.2d 492, 498-99, 215 N.W.2d 459, 463 (1974); Doemel
v. Jantz, 180 Wis. 225, 193 N.W. 393 (1923).
Although the term
"navigation" has been enlarged beyond the purpose of navigation in
aid of commerce, these enlarged rights do not extend to uses separate and
unrelated to navigation:
Historically, the public
right in navigable waters was confined solely to purposes of navigation
relating to commerce. Doemel v.
Jantz, 180 Wis. 225, 229, 193 N.W. 393, 395 (1923). The term "navigation" has since
been broadened to include use of the waters for travel, fishing, recreation and
hunting, yet the original purpose remains at the heart of the public
right. Id. Other uses of public waters are merely
incidents to navigation, "mere corolar[ies] to the primary use. Id. at 229-30, 193 N.W. at
395.
Thus,
a riparian owner's private rights give way only to public measures in aid of
navigation. In other words,
limitations on private rights are imposed to prevent obstruction of
navigation.
W.H.
Pugh Coal Co. v. State, 157 Wis.2d 620, 628, 460 N.W.2d 787,
790 (Ct. App. 1990) (emphasis in original).
There is no indication
that the respondents were exercising the right to navigation when entering the
river beach adjacent to the Pfleiderers' property between the high and low
water marks. The testimony reveals that
the respondents would use the area for walking dogs and
"beachcombing," separate and distinct from any navigation upon the
river. A riparian owner is not required
to allow the public on this area and may properly exclude any members of the public
not engaged in navigation. McFarren,
62 Wis.2d at 498-99, 215 N.W.2d at 463.
Therefore, we reverse that portion of the injunction that prohibited the
parties from excluding each other from that area.
COUNTERCLAIMS
The Pfleiderers claim
that the court's dismissal of their counterclaims on the merits with prejudice
was also erroneous. The Pfleiderers
brought two counterclaims alleging violations of federal, state and local
regulations by the respondents on two construction projects. We are satisfied that the court acted
properly. The court heard testimony
from the local zoning administrator as well as a representative from the
Department of Natural Resources that no violations of the regulations
existed. The court was entitled to rely
on that testimony in determining there was no violation.
CONCLUSION
To conclude, we reverse
that portion of the trial court's judgment prohibiting the parties from
excluding each other from the beach area of their properties between the high
and low water marks. We affirm the
judgment in every other respect. Because
the judgment was stayed pending this appeal, we remand this case to the trial
court merely to allow the court to compute the time remaining for the
Pfleiderers to exercise their option to either move from the property or pay
the punitive damages.
By the Court.—Judgment
affirmed in part; reversed in part and cause remanded.
