Schenk v. HNA Holdings, Inc

In Schenk v. HNA Holdings, Inc., 170 N.C. App. 555, 559, 613 S.E.2d 503, 507, disc. review denied, 360 N.C. 177, 626 S.E.2d 649 (2005), the Court considered a trial court's grant of the defendant's motion for directed verdict on the issue of punitive damages. As we have noted many times, "on appeal, the standard of review for a judgment notwithstanding the verdict is the same as that for a directed verdict." Scarborough v. Dillard's, Inc., 179 N.C. App. 127, 132, 632 S.E.2d 800, 803 (2006). "The standard of review . . . is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury." Our North Carolina statutes establish the requirements for punitive damages as follows: Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded: (1) Fraud. (2) Malice. (3) Willful or wanton conduct. N.C. Gen. Stat. 1D-15(a) (2003). The existence of the aggravating factor must be proved by clear and convincing evidence. N.C. Gen. Stat. 1D-15(b) (2003). . . . To award punitive damages against a corporation, "the officers, directors, or managers of the corporation must have participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages." N.C. Gen. Stat. 1D-15(c) (2003). . . . The issue on appeal is whether there was sufficient evidence that the officers, directors, or managers of defendant, HNA Holdings, Inc., participated in or condoned willful or wanton conduct. See id. Plaintiffs contend Winter's order to destroy Whitlock's memorandum constituted willful and wanton conduct by defendant. However, plaintiffs have not proved by clear and convincing evidence that destruction of the memorandum constituted "conscious and intentional disregard of and indifference to the rights and safety of others." N.C. Gen. Stat. 1D-5(7). Schenk, 170 N.C. App. at 559-60, 613 S.E.2d at 507. The Court went on to examine the other evidence brought by the defendant under a clear and convincing standard. Id. at 560-61, 613 S.E.2d at 507-08. When the Court concluded no sufficient evidence had been presented, it overruled the plaintiffs' assignment of error regarding the directed verdict. Id. at 562, 613 S.E.2d at 509.