A Managing Agent’s Malicious Actions Can Subject The Company To Punitive Damages. But What Does “Managing Agent” Really Mean?

Those who regularly litigate in Florida courts are quite familiar with the process of pursuing a claim for punitive damages.  That process requires the plaintiff to seek permission from the trial court to include a claim for punitive damages, and it requires the trial court to substantively evaluate the allegations of the proposed claim as part of deciding whether the claim should be allowed at all.  Punitive damages claims are sometimes allowed to be pleaded, but are rejected as part of summary judgment or directed verdict proceedings.  Although the punitive damages process gets a lot of attention from Florida appellate courts, a recent appellate opinion addressed the substantive issue of under what circumstances a punitive damages award by a jury should be allowed to stand.  See Florida Power & Light Co. v. Dominguez, — So. 3d —, Case No. 2D18-2363 (Fla. 2d DCA 2019) (reversing jury trial award of $15 million in punitive damages).

In Dominguez, the appellate court needed to consider whether the actions of an alleged “managing agent” were sufficiently “willful and malicious” to justify imposing punitive damages on Florida Power & Light (“FPL”).  Thus, the first question was whether the representative involved on behalf of FPL was a “managing agent” pursuant to the governing statute.  See Fla. Stat. §§ 768.72(2)(b), 768.72(3)(c).

The case involved the tragic death of a teenager who was electrocuted when the bamboo stalk he was climbing made contact with a power line owned by FPL.  The decedent’s mother pursued litigation against FPL and claimed that the regional head of FPL’s vegetation management was a “managing agent” who had committed “malicious and willful” misconduct by taking a “see-nothing, know-nothing approach” to the maintenance of the vegetation involved in the electrocution.  The appellate court concluded that the regional head of vegetation management is not the type of “managing agent” contemplated by the governing statute.  The court explained:

There is relatively little Florida case law defining a “managing agent” for purposes of direct corporate liability. However, the cases that do address this issue suggest that such an agent is more than just a manager or midlevel employee. See Ryder Truck Rental, Inc. v. Partington, 710 So. 2d 575, 576 (Fla. 4th DCA 1998) (“[A] job foreman is not, as required for imposing direct liability, a managing agent of the company.”); Capital Bank v. MVB, Inc., 644 So. 2d 515, 521 (Fla. 3d DCA 1994) (citing Bankers Multiple Line Ins. Co. v. Farish, 464 So. 2d 530 (Fla.1985)) (holding that one of several bank vice presidents, who was not on the board of directors or the loan committee, did not qualify as a managing agent); Pier 66 Co. v. Poulos, 542 So. 2d 377, 381 (Fla. 4th DCA 1989) (holding that a hotel manager was not a managing agent of the corporation that owned the hotel). Rather, a managing agent is an individual like a “president [or] primary owner” who holds a “position with the corporation which might result in his acts being deemed the acts of the corporation.” Taylor v. Gunter Trucking Co., Inc., 520 So. 2d 624, 625 (Fla. 1st DCA 1988).

Here, Dominguez sought punitive damages under the direct liability theory through the alleged gross negligence of Barry Grubb, a regional supervisor in FPL’s vegetation management program. At trial, Grubb was identified as the FPL employee with the most knowledge about this program. However, he testified that he was only in charge of the program for a limited geographical area. He also testified that he has a manager and that he does not make policy decisions relating to the program. While his position certainly comes with significant managerial power, we hold that Grubb does not qualify as a managing agent of FPL. Overseeing only a portion of FPL’s arborist program, which is itself ancillary to FPL’s primary function of providing electric power, Grubb is at best a midlevel employee more akin to one of the vice presidents in Capital Bank or the hotel manager in Poulos than to a corporate officer or official who could represent FPL as a whole. Because Grubb is not a managing agent for purposes of direct punitive liability, the award of punitive damages in this case must be reversed.

Id. (footnote omitted).

The appellate court continued its analysis by also rejecting the plaintiff’s claim that the acts or omissions of FPL’s regional manager rose to the level of “willful and malicious” misconduct, which in Florida requires evidence of misconduct equivalent to that required for criminal manslaughter.  The appellate court explained:

Here, the trial testimony established that Barry Grubb was not directly involved with the accident and did not know about the details of Justin’s death until years after the fact. Grubb also seemed unaware of specific FPL safety standards cited by Dominguez despite being identified as the person most knowledgeable about FPL’s vegetation program. Whatever negligence a jury may infer from this evidence, it certainly does not rise to the level of “reckless disregard of human life” or an “entire want of care, which would raise the presumption of a conscious indifference to consequences.” Air Ambulance Prof’ls, Inc. v. Thin Air, 809 So. 2d 28, 31 (Fla. 4th DCA 2002) (quoting Am. Cyanamid Co. v. Roy, 498 So. 2d 859, 861-62 (Fla. 1986)). Florida courts have reversed punitive damage awards under facts involving similar or more egregious conduct than that alleged in this case. See Como Oil, 466 So. 2d at 1061-62 (holding that serious injuries to plaintiff from a gasoline explosion, involving an unsafe gas truck and a driver who negligently overfilled an underground gas tank, did not warrant punitive damages); White Constr. Co., Inc. v. Dupont, 455 So. 2d 1026, 1027-28 (Fla. 1984) (holding that accident causing permanent disability to plaintiff did not warrant punitive damages despite defendants’ knowledge that the offending loading vehicle’s brakes had been defective for some time), receded from on other grounds in Murphy v. Int’l Robotic Sys., Inc., 766 So. 2d 1010 (Fla. 2000); Estate of Williams ex rel. Williams v. Tandem Health Care of Fla., Inc., 899 So. 2d 369, 371-72, 377-78 (Fla. 1st DCA 2005) (holding that death of a nursing home resident from a fall did not warrant punitive damages even though resident had fallen before and defendant took no steps to prevent future falls); Gerber Children’s Centers, Inc. v. Harris ex rel., 484 So. 2d 91, 91-92 (Fla. 5th DCA 1986) (holding that injuries sustained by a toddler who fell out of a window did not warrant punitive damages even though several employees warned defendant’s management that the window’s glass was unsafe). As in those cases, Dominguez has not demonstrated a willful and malicious action on the part of Barry Grubb or FPL that is equivalent to criminal manslaughter and punitive damages should not have been awarded.

Id.

Thus, as instructed by the appellate court in Dominguez, factually supporting a claim for punitive damages against an organization requires proof that an actual “managing agent” committed “willful and malicious” misconduct.

Matthew J. Meyer is a Partner in our Florida office.