ISG, CORP. v. PLE, INC., 2018 SD 64: Plaintiff contracted with Defendant to build two observation platforms for use by law enforcement at an annual festival held in San Juan, Puerto Rico. Defendant did not deliver the platforms they agreed to build and instead delivered a used, contractually non-compliant platform. Plaintiff sued Defendant and its president for breach of contract and fraud. The case went to trial and the jury found in favor of Plaintiff, awarding both compensatory and punitive damages. Specifically, the jury award $450,000 in compensatory damages for the breach of contract claim; $662,000 in damages for the fraudulent-inducement claim; and a total of $1,500,000 in punitive damages. Defendant filed a motion for a new trial, which was denied as to the issue of liability, but granted as to the issue of damages.
Plaintiff appealed, raising five issues, which were consolidated into three by the South Dakota Supreme Court:
- Whether the circuit court erred in granting a new trial on compensatory damages for breach of contract?
- Whether the circuit court erred in granting a new trial on compensatory damages on the fraud claims?
- Whether the circuit court erred in granting a new trial on punitive damages on the fraud claims?
As to the issue of granting a new trial on compensatory damages, the South Dakota Supreme Court held that the jury’s award could be explained by the evidence as it accurately reflected the expected profit lost minus costs and expenses Plaintiff would have incurred in completing the contract. The South Dakota Supreme Court held that Plaintiff was not required to prove its damages with absolute exactness if there is certainty as to the fact of damages. As such, the South Dakota Supreme Court found that the jury’s award accurately placed Plaintiff in the position it would have occupied if the contract had been performed and, thus, held that the circuit court erred by ordering a new trial on the issue of compensatory damages as to the breach of contract claim.
The South Dakota Supreme Court also found that the circuit court erred by ordering a new trial on the damages assessed for the fraud claims. The Court recognized that there is lesser degree of certainty required to prove tort damages as compared to contract damages. As such, the Court found that the evidence supported the jury’s award and, given that such award had a sound basis in the evidence and did not appear unreasonable, the jury’s verdict was to be affirmed.
Lastly, the issue of whether the punitive damages award was tainted by the compensatory damages award was taken up. The South Dakota Supreme Court found that, since the compensatory damages award was affirmed, such holding eliminated any concerns with the punitive damages award, and thereby found sufficient evidence to support said award.