Payne’s conduct can only be seen as exhibiting a very high degree of reprehensibility.” —Ellis, Judge 

Facts: Frank and Shelly Krysa were shopping for a truck to pull their 18-foot trailer. During the course of their search, they visited Payne’s Car Company, a used car dealership owned by Emmett Payne. Kemp Crane, a used car salesman, showed the Krysas around the car lot. The Krysas saw an F-350 truck that they were interested in purchasing. Crane told the Krysas that the truck would tow their trailer and that the truck would make it to 400,000 miles, and that it was “a one-owner trade-in.” The Krysas took the truck for a test drive and decided to purchase the truck. The Krysas paid for the truck and took possession. Later that day, the Krysas noticed that the power locks did not work on the truck. A few days later, the truck took three hours to start. The heater was not working. Mr. Krysa tried to fix some problems and noticed that the radiator was smashed up, the radiator cap did not have a seal, and the thermostat was missing. Mr. Krysa noticed broken glass on the floor underneath the front seats and that the driver’s side window had been replaced. Shortly thereafter, Mr. Krysa attempted to tow his trailer, but within two miles, he had his foot to the floor trying to get the truck to pull the trailer. A large amount of smoke was pouring out of the back of the truck. Mr. Krysa also noticed that the truck was consuming a lot of oil. Mr. Krysa obtained a CARFAX report for the truck, which showed that the truck had had 13 prior owners. Evidence proved that the truck was actually two halves of different trucks that had been welded together. An automobile expert told the Krysas not to drive the truck because it was unsafe. Mr. Krysa went back to the dealership to return the truck and get his money back. Payne would not give Krysa his money back. The Krysas sued Payne for fraudulent nondisclosure and fraudulent misrepresentation, and they sought to recover compensatory and punitive damages. The jury returned a verdict for the Krysas and awarded them $18,449 in compensatory damages and $500,000 in punitive damages. Payne appealed the award of punitive damages. 

Issue: Did Payne engage in fraudulent nondisclosure, fraudulent misrepresentation, and reckless disregard for the safety of the Krysas and the public to support the award of $500,000 in punitive damages? 

Language of the Court: The record clearly supports a finding that Payne acted indifferently to or in reckless disregard of the safety of the Krysas in selling them a vehicle that he knew or should have known was not safe to drive. The evidence also supported a finding that the harm sustained by Krysas was the result of intentional malice, trickery, or deceit, and was not merely an accident. Payne’s conduct can only be seen as exhibiting a very high degree of reprehensibility.

Decision: The court of appeals found that Payne’s fraudulent concealment, fraudulent misrepresentation, and reckless disregard for the safety of the Krysas and the public justified the award of $500,000 of punitive damages to the Krysas.

Ethics: Questions Did Payne, the used car dealer, act ethically in this case? Should punitive damages have been awarded in this case?