Punitive damages award reversed. Standard for punitives based on recklessness announced. "Reprehensibility" required.

Fly Fish Vermont v. Chapin Hill Estates, 2010 VT 33 (Burgess, J.)
In this action involving a boundary dispute and claims of nuisance and trespass related to the siltation of a pond, the appealing landowner argues that the court erred by awarding punitive damages without finding the requisite wrongful intent, or, alternatively, by awarding an excessive amount of damages. We reverse its award of punitive damages. Despite defendants’ generally reckless violation of the permit conditions imposed for the protection of plaintiffs’ pond, we agree the record cannot support a punitive award given the absence of outrageously reprehensible conduct and the lack of actual or legal malice towards plaintiffs.       


Generally punitive damages require a showing of essentially two elements. The first is wrongful conduct that is outrageously reprehensible. The second is malice, defined variously as bad motive, ill will, personal spite or hatred, reckless disregard, and the like (at¶ 21) In this case the court adopts and incorporates recklessness as a component of malice, and establishes a measure by which recklessness reaches the point of actual malice.     


The court “holds” that punitive damages are not limited to intentional egregious torts, but can also extend to “egregious harm” resulting from reckless conduct amounting to malice.  The minimum culpability necessary for an award of punitive damages based on reckless or wanton misconduct requires evidence that the defendant acted, or failed to act, in conscious and deliberate disregard of a known, substantial and intolerable risk of harm to the plaintiff, with the knowledge that the acts or omissions were substantially certain to result in the threatened harm. (at ¶ 25)   But neither such indifference to plaintiff's rights nor  even wilful violation of law is  determinative of malice. Vindication of the permit process is not a basis for punitive damages.     


In keeping with the court’s “consistent preconditioning of punitive damage upon outrageously egregious misconduct” such “reckless malfeasance or nonfeasance and its attendant risk of harm must all be more reprehensible than simply wrongful or illegal behavior." The findings show that defendants were merely  reckless scofflaws in wilful violation of their permit who were indifferent to plaintiffs’ interest.  The threatened and resulting harm were not—compared to our precedent— so “outrageously reprehensible” as to render defendants’ recklessness malicious as a matter of law.