                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                               NOVEMBER 27, 2007 Session

             DAVID GOFF, ET UX, ET AL. v. ELMO GREER & SONS
                      CONSTRUCTION CO., INC.

                    Direct Appeal from the Circuit Court for White County
                            No. CC-320    John A. Turnbull, Judge



                      No. M2006-02660-COA-R3-CV - Filed May 16, 2008


This appeal involves a jury’s award of punitive damages. The construction company entered into
a contract with the State of Tennessee to widen a portion of a highway. The homeowners entered
into a contract with the construction company allowing the construction company to place excess
materials generated from the highway project on the homeowners’ property. In exchange, the
homeowners would receive compensation based on the cubic fill area, and the company would fill
and grade that portion of the homeowners’ property. The project required that the construction
company conduct extensive blasting near the homeowners’ house and vehicles. One of the
homeowners became concerned when he witnessed the construction company placing various
garbage items and tires on his property near the fill area. After three years, the construction company
finished the project. The homeowners brought suit, alleging that the company failed to pay the
amount due under the contract and caused damage to their house due to the blasting. The complaint
also alleged that the company buried certain items, including tires, on the property which constituted
an environmental tort. The homeowners’ amended complaint stated a cause of action in nuisance
and also sought an award of punitive damages in the amount of $1 million dollars. The jury returned
a verdict in favor of the homeowners for the nuisance claim in the amount of $3,305.00 and found
that punitive damages should be imposed on the construction company. The jury found in favor of
the construction company for the environmental tort claim. After the second phase of the trial, the
jury returned an award of $2 million in punitive damages. The trial court remitted the award to $1
million, the amount of the homeowners’ ad damnum. The construction company appeals, and we
reverse and remand in part and affirm in part.


   Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Reversed and
                        Remanded in Part and Affirmed in Part

ALAN E. HIGHERS, PJ., W.S., delivered the opinion of the court, in which DAVID R. FARMER , J., and
HOLLY M. KIRBY , J., joined.


Linda J. Hamilton Mowles, Knoxville, TN, for Appellant
John C. Knowles, Sparta, TN; John P. Pryor, Smithville, TN; Jon E. Jones, Cookeville, TN, for
Appellees


                                                     OPINION

                                    I. FACTS & PROCEDURAL HISTORY

         David Goff and his wife, Joyce Goff, along with David’s mother, Agnes Goff (collectively

the “Goffs” or “Appellees”) own approximately 400 acres on both the east and west sides of

Highway 111 in Sparta, Tennessee. The highway runs directly in front and directly behind David

and Joyce Goff’s house located on a portion of this 400 acre tract. The State of Tennessee planned

to widen Highway 111, and Elmo Greer & Sons Construction Company, Inc. (“Construction

Company” or “Appellant”) received the contract with the State to build six miles of the Highway 111

four-lane road.1 The State’s plan required that Construction Company widen the “cut” directly in

front of the Goffs’ home, which required extensive blasting. Construction Company sought to place

the excess material that this process would generate on the Goffs’ property. Construction Company

and the Goffs entered into a contract whereby Construction Company could temporarily place the

excess rock and dirt on the east side of the Goffs’ property. The Goffs were to receive ten cents per

cubic yard in exchange for Construction Company receiving the right to place “dirt, rock, and other

excess material from the jobsite” on the Goffs’ property. The agreement also provided that “the area2

in which said material is to be deposited will be left in a neat and graded condition.” Construction

Company drafted the aforementioned contract.

         1
          More specifically, Construction Company was the general contractor and subcontracted out the bridge work
and paving. It performed the grading work.
         2
              The contract describes the area as follows: “Right of +/- Station 375.00 S.R. 111.” The Goffs contended
at trial that the area was around five to seven acres. Construction Company contended at trial the area was around three
to five acres. In any event, the exact size of the fill area is not determinative of the issues on appeal.


                                                          -2-
       Construction Company began the project in March of 1994, and finished in 1997. The Goffs

brought suit on June 30, 1998, alleging breach of contract due to Construction Company’s failure

to pay the ten cents per cubic yard for the use of the property. The Goffs also sought damages caused

by Construction Company’s blasting, claiming that rocks and debris flew onto their property,

damaging their vehicles and house. The Goffs also alleged damages caused by Construction

Company’s burying of waste on the property:



               The defendants . . . have unlawfully and in violation of environmental

               laws buried refuse and other objects such as automotive parts, large

               earth moving rubber tires and other impermissible materials on the

               property of the plaintiffs[ ] . . . when disposition of such objects

               should have been made in compliance of environmental standards and

               which will likely result in damages to the real estate of these plaintiffs

               ....



Thereafter, the Goffs moved to amend their complaint, and the trial court granted leave to amend.

The Goffs’ amended complaint added the following claim of nuisance:



               [T]he defendant, its servants, agents and employees did commit acts

               of nuisance upon the land of the plaintiffs by spilling upon the

               property oil and petroleum products and by burying and concealing

               trash, garbage, waste products, rubber tires, oil filters, used and


                                                  -3-
              discarded      machinery parts, all without the permission or

              authorization of the plaintiffs and did thereby create an unauthorized,

              unlicensed and prohibited landfill . . . . As a result of the actions on

              the part of the defendant in creating and inflicting injury upon the

              plaintiffs, the defendant is liable to the plaintiffs for the costs and

              expenses of excavating, removing, and disposal of the waste materials

              buried upon the property of the plaintiffs in order to remediate and

              reclaim the real estate to the condition that the property was in prior

              to the commission of the acts of nuisance. The defendant shall also

              be liable to the plaintiffs for a fair rental value during the time that the

              defendant has used the property for the unauthorized landfill until the

              defendant has paid the cost of reclamation in order to restore the

              plaintiffs’ property to its undamaged condition.



The Goffs’ amended complaint also sought an award of $1 million in punitive damages: “Plaintiffs

do further amend their complaint to demand compensatory damages of the defendant in the amount

of Five Hundred Thousand ($500,000.00) Dollars, and an additional sum of One Million

($1,000,000.00) Dollars in punitive damages.”



       Trial commenced on June 28 and concluded on June 30, 2006. The parties stipulated that

Construction Company was liable for breach of contract in the amount of $5,355.50, which

represented 53,555 cubic yards of fill material that went onto the Goffs’ property during


                                                  -4-
construction, at 10 cents a cubic yard. Both Mr. and Mrs. Goff testified as to the damage to their

home and vehicles caused by Construction Company’s blasting. Mr. Goff testified that Construction

Company conducted blasting as close as 100 feet from their home, and oftentimes did not warn the

Goffs prior to commencing blasting.3



         As to the claim that Construction Company buried certain items on the Goffs’ property, Mr.

Goff testified as follows:



                  [T]hey were staging equipment there [near the fill area] and doing oil

                  changes and, you know, the ground is black . . . . They also repaired

                  their equipment there, so when they took the thing apart, lots of oil

                  and grease got on the ground.

                  ...

                  I - - I became concerned. Well, they were spilling a lot of stuff there.

                  ...

                  [A]s they were filling [ ] they were just putting anything out there in

                  the fill and when I would approach them, [they said that] we’ll take

                  care of that. We’ll take care of that.




         3
            W e need not get into great detail of the testimony concerning the property damage caused by blasting, as
neither party appeals that issue. Nor is the strict liability claim relevant to the issue of punitive damages.



                                                        -5-
More specifically, Mr. Goff testified that he saw the following items in the fill area: “hydraulic lines,

parts that say CAT on them, boxes that say CAT, Rotella containers. . . . That’s a motor oil, I think.

. . . Plastic, gallon, sort of like antifreeze comes in. . . . [R]ods and all, you know, just things that

would come off big equipment.” Mr. Goff also testified that he saw 55-gallon barrels and tires

stacked in the area. This concerned him, so he asked the workers “‘Guys, you’re not going to bury

anything on me except rock and dirt, right? That’s our agreement[,]’ to which the workers

responded, ‘Don’t worry about it. We will clean it up. We’re going to slope [the fill area] down to

the road, and you’re going to be real pleased with what we do.’”



        Mr. Goff testified that he was especially concerned that Construction Company was burying

tires on his property: “There was four or five tires . . . and it had big rocks on it . . . . Well, in seeing

that, you know, you wouldn’t think they’d dump them on there and then take them off and haul the

tires off. So, I - - I got my camera and I made pictures. I also . . . went and told them, I said, it looks

like you’re fixing to bury some tires. Don’t do that.” None of the Goffs actually witnessed any of

Construction Company’s employees burying tires or any other improper materials.



        The deposition of Construction Company’s chief engineer, Lee Anderson, was read to the

jury, and Mr. Anderson also testified at trial. Mr. Anderson supervised the Highway 111 project.

As to the company policy concerning tires, he testified that “we use a lot of tires. Limestone rock

punches holes in them and wears them out. As they become flat or unusable, we stack them up and

then we haul them back [to Construction Company’s home office] and we turn them back in. They

have some value to them.” Mr. Anderson testified that the tires are stacked, “then once we get them


                                                    -6-
- - get a full load, we send a truck to pick them up. . . . We inventory them and then they dispose of

them. They are recapped. We reuse them on other equipment.” Mr. Anderson testified that some

tires are unsuitable for reuse, however, and that there is a financial cost associated with disposing

of these tires.



        Mr. Anderson conducted the final inspection of the fill site upon completion of the project:

“I reviewed the project to see how much equipment, how much materials were left and . . . what kind

of trucks the shop should send to pick up what we had left over.” Mr. Anderson observed tires lying

on the completed fill area, so he “called the shop and told them to come pick up the equipment, and

the tires, and any other surplus equipment . . . .”



        As to the policy concerning oil disposal, Mr. Anderson testified as follows: “We change the

oil every so many hours depending on the size of the machine. And we take the used oil, put it into

drums, send it back to [the home office]. And [ ] we use it to heat our shop, we recycle the oil.”



        Mr. Goff did admit that after completion of the fill work, he saw one of Construction

Company’s trucks hauling off tires. Convinced that Construction Company nevertheless buried tires

and other items under the fill material, Mr. Goff testified that he hired Lloyd Shores Trucking and

Excavation and asked them to dig in that area of the property. This first dig produced one “big” tire,

which Mr. Goff described as being 8 feet tall by 24 inches wide. The excavation company dug a

total of five holes that day and found another smaller, truck tire. The second dig occurred on June

17, 2006, and uncovered four additional truck tires of various sizes. Mr. Goff testified that the


                                                  -7-
second dig focused on an area of about a half acre of the fill area. They also uncovered two steel

pipes.



         When asked why six tires were found on the Goffs’ property, Mr. Anderson testified that “I

have no idea,” nor could he say for sure where the tires came from: “it makes sense that they were

ours but I don’t know that. They could be [Mr. Goff’s tires].” He did admit that Construction

Company used tires like the ones buried on the property, but that he did not personally observe any

of Construction Company’s employees burying anything other than fill material. He admitted on

cross examination that he was not on the site for the entire project, as he supervised various other

projects during that time.



         This discovery of tires prompted Construction Company to perform its own investigation.

Michael Corn, an engineer with AquAeTer, Inc., conducted core sampling of the fill area. He

testified as to the process of “boring,” which he described as “pushing a probe down in the soil and

taking soil samples.” From these samples, he concluded that there were no hazardous materials or

hazardous waste at the site. Mr. Corn testified that tires were not considered hazardous material. He

testified that to his knowledge, a few tires and pipes buried on private property would not create a

“problem with the Solid Waste Disposal Act.”



         Ken Johnson, a geologist employed by First Response, Incorporated, testified that upon the

Goffs’ request, he performed an initial evaluation of the property in the fall of 2003. Mr. Johnson

testified that he saw on top of the ground a large oil filter from some type of large earth-moving


                                                -8-
equipment on the property, along with two tires. As to the core sampling, he testified that it is a

“very limited scope of exploration,” and that the only way buried tires would be discovered using

this method would be if the core barrel or the drill made contact with the buried tires. Mr. Johnson

testified that the only way he would certify that there was not any solid waste left on the Goffs’

property would be to excavate the entire fill area.4 He estimated that this would cost six dollars a

cubic yard, or $318,000. This estimated cost, however, depended on what, if any, types of materials

would be uncovered.



         On cross examination, Mr. Johnson testified that he did not observe any oil sheens on the

property, nor did he have pictures of the oil filter or the tires that he observed on the property. He

also testified that he did not make a recommendation that the Goffs dig up the entire fill area, but

rather gave an estimate of what that procedure would cost. He admitted that tires are considered a

nonhazardous waste.



         William Parrish, a real estate appraiser, valued the fill area property at $50,000 upon the

Goffs’ request, assuming the property was free from any buried solid waste. Based on Mr. Johnson’s

aforementioned estimate, Mr. Parrish estimated the cost to cure the property at $375,000. Mr.

Parrish testified that if the property has solid waste buried on it, then the value of the property would

be zero, “[b]ecause under Tennessee law you have to disclose any latent defects of the property . .




         4
           When asked about this, Mr. Corn testified that he believed it was unnecessary “to dig up all this fill material
that had been placed there[,] . . . [because] we haven’t found anything that would require that level of effort to dig up
a site.”


                                                           -9-
. . And as I see now, it isn’t a really good fill for construction, large items in it, including large

boulders as well as tires. It doesn’t seem to be very stable as far as a building site.”



       Construction Company called Johnny Apple, the director of the division of solid waste

management for the Tennessee Department of Environment and Conservation, as a witness. Mr.

Apple testified that his department “didn’t see anything unusual that would indicate [the need for]

further investigation.”



       The jury returned a special verdict in favor of the Goffs as follows:



               1. For breach of contract, the defendant, . . . shall pay unto the

               plaintiffs [ ]the sum of $5,355.50, as agreed by the parties. (The

               Court does reserve the calculation of pre-judgment interest).

               ...

               3. The jury did find that the damages suffered by the plaintiffs [ ] as

               a result of the blasting damage caused by the activities of the

               defendant was $9,510.00.

               ...

               6. The jury awarded damages in favor of the plaintiffs [ ] against the

               defendant for creating a nuisance upon the plaintiffs’ property in the

               amount of $3,305.00.




                                                 -10-
The jury found for Construction Company as follows: “The jury found that the defendant had not

caused any environmental hazard to the Goff property.”5 As to punitive damages, the jury found

“that the plaintiffs had proved by clear and convincing evidence that the defendant was guilty of such

egregious, intentional or reckless acts that an award of punitive damages should be assessed against

the defendant as punishment for its actions.”


         5
            The special verdict form and the final judgment refers to this claim as an environmental “hazard”; the jury
instruction reads:
                                                      Environmental Tort
                             It is unlawful to dispose of solid waste in violation of the Solid Waste
                   Disposal Act of the State of Tennessee. No solid waste processing facility or
                   disposal facility or site in any political subdivision of this state shall be operated or
                   maintained by any person unless such person has registered with the Commissioner
                   ....
                             W hole waste tires, lead acid batteries, and used oil must be disposed of in
                   a State approved site.
                   ...
                             It is a violation of law for any person to knowingly cause damage to or the
                   destruction of any real or personal property of another, knowing that the person
                   does not have the owner’s effective consent.
                             “Damage” includes but is not limited to: [A] Destroying, polluting or
                   contaminating property; or [B] Tampering with property and causing pecuniary loss
                   or substantial inconvenience to the owner or third person; and
                             “Polluting” is the contamination by man-made or man-induced alteration
                   of the chemical, physical, biological or radiological integrity of the atmosphere,
                   water, or soil to the material injury of the right of another. Pollutants include solid
                   waste, wrecked or discarded equipment, and industrial waste.
                             Plaintiff has the burden of proving by a preponderance of the evidence an
                   environmental tort.

Although Construction Company did not raise this issue at trial or on appeal, we would point out that:
                W hen violations occur, the [Tennessee Solid W aste Disposal] Act gives the
                regulators broad authority to stop the violation and to order steps to remedy or
                mitigate its effects. The Act does not explicitly provide a private right of action for
                persons who have been damaged as a result of a violation. . . . Our interpretation
                of the scope of remedies available under the Act will not leave without recourse
                those who have sustained a special or peculiar injury from a violation of the Act.
                The same facts may support claims of both public and private nuisances[.] . . .

Wayne County v. Tennessee Solid Waste Disposal Control Bd., 756 S.W .2d 274, 283 (Tenn. Ct. App. 1988) (emphasis
added). Although we need not answer, we question whether such a cause of action labeled “environmental tort” is
appropriate.




                                                         -11-
        The second phase of the trial commenced on July 1, 2006. Mr. Anderson, Construction

Company’s chief engineer, was the only witness to testify during this phase. Construction

Company’s financial statements indicated that the company had a net worth of over $46 million for

the year 2000; $50 million for the year 2001; $51.1 million for the year 2002; and $54.3 million for

the year 2003. Mr. Anderson testified that during the project in question, Construction Company

went through hundreds of tires. He reiterated that company policy “is to return those tires to [the

home office] because you have to put [the tires] on a machine to see if [they] can be sectioned or

recapped. You can’t tell on a job.” He also testified that because the project was with the State of

Tennessee, if state inspectors witnessed Construction Company burying tires, which they did not,

they would have penalized them or withheld payment for the project. He testified that the State of

Tennessee did not cite or give any warnings to Construction Company for any improper conduct

relating to the fill area.



        The jury returned an award of $2 million in punitive damages against Construction Company:

“We, the Jury, unanimously answer the questions submitted by the Court as follows: We find the

defendant should be required to pay punitive damages in the amount of $2 million[.]”



        On August 10, 2006, Construction Company filed a motion for a new trial and a motion to

alter or amend the judgment, or in the alternative, remittitur. The Goffs filed a response in which

they acknowledged that the judgment exceeded the ad damnum in their complaint, and thus did not

oppose a $1 million reduction of the punitive damages award. The court granted Construction

Company’s request for remittitur, reducing the punitive award to $1 million “to conform to the


                                               -12-
amount the plaintiffs sued for in their ad damnum[.]” The court denied Construction Company’s

motion for a new trial, setting forth findings of fact and conclusions of law. The court went through

the analysis set forth in Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901–02 (Tenn. 1992), and

approved the $1 million punitive award.



                                     II. ISSUES PRESENTED



       Appellant presents several issues for our review, the majority of which deal with the award

of punitive damages. We slightly reorder and consolidate the issues as follows:



1.     Whether the record supports the award of punitive damages.



2.     Whether the award of punitive damages is so excessive that it is in violation of Tennessee

       and federal constitutional due process.



3.     Whether the trial court issued an improper jury instruction concerning punitive damages.



4.     Whether the trial court erred by denying Construction Company’s motion for a mistrial when

       the Goffs introduced evidence of insurance and settlement negotiations.




                                                 -13-
                                        III.   STANDARD OF REVIEW



        In this case, the trial court reduced the punitive damages award to conform to the ad

damnum,6 and then approved the $1 million punitive damages award. When the trial court approves

the jury verdict in its role as “thirteenth juror,” our standard of review is more deferential: we must

affirm if there is any material evidence to support the verdict. Tenn. R. App. P. 13(d); Coffey v.

Fayette Tubular Products, 929 S.W.2d 326, 331 n.2 (Tenn. 1996) (citing Ellis v. White Freightliner

Corp., 603 S.W.2d 125, 129 (Tenn. 1980); Benson v. Tennessee Valley Elec. Co-op., 868 S.W.2d

630, 640 (Tenn. Ct. App. 1993)). We review the trial court’s conclusions of law under a de novo

standard upon the record with no presumption of correctness. Union Carbide Corp. v. Huddleston,

854 S.W.2d 87, 91 (Tenn. 1993) (citing Estate of Adkins v. White Consol. Indus., Inc., 788 S.W.2d

815, 817 (Tenn. Ct. App. 1989)).



                                               IV. DISCUSSION



        Construction Company raises several arguments concerning the punitive damages award.

First, we will address its argument that the trial court incorrectly relied on the environmental tort in

approving the jury’s award of punitive damages, because the jury rejected that cause of action and

declined to award compensatory damages on that basis.



        6
           A trial court cannot enter a judgment in excess of the amount sought in the plaintiff’s complaint. Hansen
ex rel. Hansen v. Bultman, No. E2001-02664-COA-R3-CV, 2002 WL 31780680, at * 2 (Tenn. Ct. App. Dec. 13, 2002)
(quotation omitted).



                                                       -14-
       Our Supreme Court, in Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901–02 (Tenn. 1992),

laid out the procedural framework for awarding punitive damages. First, the plaintiff must prove by

clear and convincing evidence that the defendant acted (1) intentionally, (2) fraudulently, (3)

maliciously, or (4) recklessly. Id. at 900–01. Upon such a finding, the jury must then determine

the amount of damages during the second phase of the trial, taking into consideration the following:



               (1) The defendant’s financial affairs, financial condition, and net

               worth;



               (2) The nature and reprehensibility of defendant’s wrongdoing, for

               example[:]



               (A) The impact of defendant’s conduct on the plaintiff, or



               (B) The relationship of defendant to plaintiff;



               (3) The defendant’s awareness of the amount of harm being caused

               and defendant’s motivation in causing the harm;



               (4) The duration of defendant’s misconduct and whether defendant

               attempted to conceal the conduct;




                                               -15-
                 (5) The expense plaintiff has borne in the attempt to recover the

                 losses;



                 (6) Whether defendant profited from the activity, and if defendant did

                 profit, whether the punitive award should be in excess of the profit in

                 order to deter similar future behavior;



                 (7) Whether, and the extent to which, defendant has been subjected

                 to previous punitive damage awards based upon the same wrongful

                 act;



                 (8) Whether, once the misconduct became known to defendant,

                 defendant took remedial action or attempted to make amends by

                 offering a prompt and fair settlement for actual harm caused; and



                 (9) Any other circumstances shown by the evidence that bear on

                 determining the proper amount of the punitive award.



Id. at 901–02. The Court later explained in Metcalfe v. Waters, 970 S.W.2d 448, 452 (Tenn. 1998),

that the aforementioned factors “are also necessarily considered with respect to the threshold liability

issue[.] . . .    [O]nly evidence of a defendant’s net worth or financial condition is deemed

inadmissible in determining a defendant’s liability for punitive damages.” (citation omitted).


                                                  -16-
       As to the evidentiary standard, clear and convincing evidence is “evidence in which there is

no serious or substantial doubt about the correctness of the conclusions drawn from the evidence.”

Goodale v. Langenberg, 243 S.W.3d 575, 589 (Tenn. Ct. App. 2007). Clear and convincing

evidence should “produce in the fact-finder’s mind a firm belief or conviction as to the truth of the

allegations sought to be established.” Id. (quoting In re C.W.W., 37 S.W.3d 467, 474 (Tenn. Ct. App

2000)). Clear and convincing evidence means that the truth of the facts asserted is “highly

probable,” as opposed to the lesser standard of preponderance of the evidence, which is a “more

probable” standard. Id.



       The higher evidentiary standard helps limit the imposition of punitive damages to only the

most egregious of cases. Furthermore, “it is well-settled that punitive damages are not intended to

compensate an injured plaintiff but may be awarded by the jury for the purposes of punishing

wrongdoers and deterring them from similar conduct in the future.” Coffey v. Fayette Tubular

Products, 929 S.W.2d 326, 328 (Tenn. 1996) (citing Huckeby v. Spangler, 563 S.W.2d 555, 558-59

(Tenn. 1978)). Compensatory damages are to “compensate an injured plaintiff for personal injury

or property damage, but [punitive damages are meant] to punish a defendant, to deter him from

committing acts of a similar nature, and to make a public example of him.” Emerson v. Oak Ridge

Research, Inc., 187 S.W.3d 364, 372 (Tenn. Ct. App. 2005) (quotation omitted).



        Relevant to this case is intentional and reckless conduct: the jury found that the Goffs had

proven by clear and convincing evidence that Construction Company “was guilty of such egregious,

intentional or reckless acts,” and thus, punitive damages were warranted.


                                                -17-
               A person acts intentionally when it is the person’s conscious objective

               or desire to engage in the conduct or cause the result. . . . A person

               acts recklessly when the person is aware of, but consciously

               disregards, a substantial and unjustifiable risk of such a nature that its

               disregard constitutes a gross deviation from the standard of care that

               an ordinary person would exercise under all the circumstances.



Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901 (Tenn. 1992) (citations omitted). If the jury

returns an award of punitive damages, then the trial judge must review the award, “giving

consideration to all matters on which the jury is required to be instructed. The judge shall clearly set

forth the reasons for decreasing or approving all punitive awards in findings of fact and conclusions

of law demonstrating a consideration of all factors on which the jury is instructed.” Id. at 902.



       Turning back to the present case, Construction Company argues that the trial court incorrectly

relied on the environmental tort in approving the jury’s award of punitive damages, because the jury

rejected that cause of action and declined to award compensatory damages on that basis. We agree.

Construction Company goes on to argue that “[w]here there is a finding that plaintiff has suffered

no actual damage (in this case under the environmental hazard claim), no punitive damages may be

awarded.” We disagree with this contention, however, because the jury found that the Goffs were

legally injured and awarded actual damages based on the claim of nuisance.              The trial court,

however, discussed in great length the environmental tort claim as support for its decision to uphold

the jury award of $1 million in punitive damages:


                                                 -18-
       2. The Nature and Reprehensibility of the Defendant’s

                             Wrongdoing

         . . . By intentionally burying tires eight feet tall, thirty-two

inches in diameter, and weighing over one ton, the defendant clearly

violated the solid waste disposal act. The policy of the state to avoid

pollution and the creation of unpermitted landfills was intentionally

violated on the lands of another and justifies a substantial punitive

damages award.

...

           4. The Relationship of Defendant to Plaintiff

. . . The defendant’s intentional violation of the solid waste disposal

act by polluting defendant’s property . . . requires a substantial award

of punitive damages.

 5. The Defendant’s Awareness of the Amount of Harm being

 caused and the Defendant’s Motivation in Causing the Harm

         The defendant was aware of state policy regarding landfills

and pollution. The defendant knew how large tires were required to

be cut up and shredded and then disposed of in an approved site. .

..

     11. Any Other Circumstances Shown by the Evidence That

     Bear on Determining the Property [sic] Amount of Punitive

                               Damages


                                  -19-
                       The State of Tennessee has a strong and legitimate interest in

               preventing    construction    companies,     especially construction

               companies being paid under contract with the state, from dumping or

               polluting property located within the state. Burying solid waste tires

               is a violation of Tennessee Solid Waste Disposal Act. Tennessee

               Code Annotated Section 68-11-866 and 867. For violation of the act,

               violators are subject to civil penalties of up to $5,000.00 per day.

               Tennessee Code Annotated Section 68-22-117.              In addition, a

               violation of the act constitutes a Class B misdemeanor for each day

               the violation continues.

                       In this case, the violation of state policy and law was not

               discovered by the state in spite of the fact that DOT inspectors were

               on the fill area on a daily basis. State officials who testified at trial

               seemed to minimize the violations. The jury could have concluded,

               and the court does conclude, that if state policy of preserving the

               environment and enforcing penalties the legislature has proscribed for

               violation of the policy in this case, it was up to this jury to impose an

               appropriate penalty to punish the defendant . . . .



        In this case, the only claim upon which punitive damages could be based upon is the

nuisance claim, as the jury found Construction Company not liable for the environmental tort. Here,

the Goffs focus on the expert testimony that the cost to clean the fill area would be $318,000, and


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that the award of damages based on the nuisance claim “did not encompass the full harm the

plaintiffs sustained. The harm to the plaintiffs goes beyond their legally recoverable damages.” The

Goffs’ sought in their complaint recovery of “the costs and expenses of excavating, removing, and

disposal of the waste materials buried upon the property.” The jury, however, declined to make such

an award. The trial court stated in its findings of fact that “the jury’s compensatory damages award

was very modest. The evidence would have supported a verdict of over $100,000.” Whatever the

jury’s reasoning for the “modest” award, punitive damages cannot be used to make up for a low

compensatory award.



         The trial court’s findings of fact and conclusions of law are insufficient in that they rely

heavily on the environmental tort claim, a theory which the jury rejected. We therefore reverse the

award of punitive damages and remand the case to the trial court. On remand, the trial court should

apply the Hodges factors and make appropriate findings of fact and conclusions of law in approving

or decreasing the award of punitive damages, if the court deems appropriate, based on the nuisance

theory.7 See generally Emerson v. Oak Ridge Research, Inc., 187 S.W.3d 364, 374 (Tenn. Ct.

App. 2005) (“Since the Trial Court failed to make such findings and did not conduct the proper

analysis in this case, the issue of punitive damages is remanded and the Trial Court is directed to



         7
           Construction Company does not raise issue with the award of compensatory damages based on the nuisance
claim. Seemingly inconsistent, Construction Company’s brief states that “[t]he only basis on which the jury could award
punitive damages is on plaintiffs’ nuisance claim, the only claim supported by compensatory damages[.]” Construction
Company later argues, however, that “[n]uisance is not the type of damage for which punitive dam ages were
contemplated in this case.” Apparently Construction Company is arguing that the nuisance jury instruction did not
mention punitive damages. This argument has no merit, as the separate jury instruction concerning punitive damages
stated: “You may consider an award of punitive damages only if you find that the plaintiff has suffered actual damage
as a legal result of the defendant’s fault and you have made an award for compensatory damages for either an
environmental tort or nuisance.”


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comply with the requirements of Hodges and Culbreath.”). Because of our holding, we need not

address Construction Company’s constitutional argument regarding the excessiveness of the award.




                             B. Jury Instruction: Punitive Damages



       Next, Construction Company argues that the trial court erred in instructing the jury on the

issue of punitive damages. Construction Company points to two alleged errors here: (1) the fact that

the court did not instruct the jury that punitive damages “are only proper in egregious circumstances”

and (2) “where [the court] charged intentional or reckless conduct as the basis for punitive damages

where [the Goffs] pled only intentional and fraudulent conduct.”



       We review jury charges in their entirety in order to determine whether the trial court

committed reversible error. Godbee v. Dimick, 213 S.W.3d 865, 880 (Tenn. Ct. App. 2006) (citing

Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 446 (Tenn. 1992)). “A verdict will be

reversed if it can be shown that an instruction contains an inaccurate statement of the law or is

confusing and, considering the charge of the court as a whole, that the error was not harmless, i.e.

that the instruction more likely than not affected the outcome of the trial.” Id. (citations omitted).



       As for the instruction concerning punitive damages, Construction Company sought the

inclusion of the following: “Punitive damages are to be awarded only in the most egregious of

cases.” The trial court declined to include this proposed addition. We first point out that “[t]he fact


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that a special request for jury instruction asserts a correct rule of law does not make it proper jury

charge material.” Godbee v. Dimick, 213 S.W.3d 865, 881 (Tenn. Ct. App. 2006) (citations

omitted). The jury instruction read, in part: “The purpose of punitive damages is not to further

compensate the plaintiff but to punish a wrongdoer and deter others from committing similar wrongs

in the future.” The instruction complies with Hodges and we find no error here.



       Construction Company next argues that it was error to add the term“reckless” to the punitive

damages jury instruction when the Goffs pled “fraudulent.” A jury instruction should “reflect the

theories that are supported by the parties’ pleadings and proof, as well as the parties’ claims and

defenses.” Goodale v. Langenberg, 243 S.W.3d 575, 584 (Tenn. Ct. App. 2007) (citing Cole v.

Woods, 548 S.W.2d 640, 642 (Tenn. 1977)).



       The instruction read: “Punitive damages may be considered if, and only if, the plaintiff has

shown by clear and convincing evidence that a defendant has acted either intentionally or recklessly.”

As Construction Company points out, the Goffs pled only intentional or fraudulent conduct. This

argument was raised in Construction Company’s motion for a new trial, but it does not appear that

any specific objection was raised to that part of the instruction during trial. And as the Goffs point

out, Construction Company’s counsel referred several times throughout the trial to its alleged

“reckless conduct.” Rule 15.02 of the Tennessee Rules of Civil Procedure provides:



               When issues not raised by the pleadings are tried by express or

               implied consent of the parties, they shall be treated in all respects as


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               if they had been raised in the pleadings. Such amendment of the

               pleadings as may be necessary to cause them to conform to the

               evidence and to raise these issues may be made upon motion of any

               party at any time, even after judgment; but failure so to amend does

               not affect the result of the trial of these issues.



“The determination of whether there was implied consent rests in the discretion of the trial judge,

whose determination can be reversed only upon a finding of abuse.” Zack Cheek Builders, Inc. v.

McLeod, 597 S.W.2d 888, 891 (Tenn. 1980) (citation omitted). In this case, the trial judge

determined that a punitive damages charge based on intentional and reckless conduct was needed

based on the evidence presented, and that there was no evidence from which the jury could find that

punitive damages should be imposed based on Construction Company’s fraudulent conduct. We

cannot say that the lower court abused its discretion in making this decision.




                     C. Evidence of Insurance and Settlement Negotiations



       Finally, Construction Company argues that the trial court should have granted its motion for

a mistrial because “where the compensatory damages were so minimal while the punitive damages

were so excessive, it is likely that the jury did recall the reference to insurance in deciding the

monetary awards[.]”




                                                  -24-
        “It is well settled that the decision of whether to grant a motion for mistrial is within the

sound discretion of the trial court.” Willis v. Settle, 162 S.W.3d 169, 188 (Tenn. Ct. App. 2004)

(citing State v. McKinney, 929 S.W.2d 404, 405 (Tenn. Crim. App. 1996)). Absent an abuse of

discretion, we will not disturb the trial court’s decision to deny a motion for mistrial. Id. (citations

omitted). The trial court should grant a mistrial if reference to liability insurance was made wilfully

for the purpose of influencing the jury. Terry v. Plateau Elec. Co-op., 825 S.W.2d 418, 422 (Tenn.

Ct. App. 1991) (citation omitted). We find no proof that such mention of insurance affected the

result of the trial, or that the Goffs’ counsel willfully and voluntarily referred to insurance in order

to influence the jury. See McClard v. Reid, 190 Tenn. 337, 340, 229 S.W.2d 505, 506 (Tenn. 1950)

(“[I]t is more or less a question for the trial court, to exercise his discretion on, as to whether or not

the plaintiff has deliberately injected the insurance question to the prejudice of the defendant.”);

Ailor v. City of Maynardville, No. 03A01-9605-CV-00158, 1996 WL 722041, at *4 (Tenn. Ct. App.

Dec. 17, 1996). Although the curative instruction did seem to emphasize the point that Construction

Company did indeed have insurance, we cannot say that the trial court abused its discretion in

refusing to grant Construction Company’s motion for a mistrial.



                                          V. CONCLUSION



        As discussed, we reverse the award of punitive damages and remand that issue to the trial

court. We affirm the decision of the trial court on the other matters. Costs of this appeal are taxed

to Appellant, Elmo Greer & Sons Construction Co., Inc., and its surety, for which execution may

issue if necessary.


                                                  -25-
       ___________________________________

       ALAN E. HIGHERS, P.J., W.S.




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