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Johnson v. Diversified Health Services Inc.

March 09, 1999

J. C. JOHNSON AND DEBRA JOHNSON, APPELLANTS INDIVIDUALLY AND AS GUARDIANS OF GARRY W. JOHNSON
v.
DIVERSIFIED HEALTH SERVICES, INC. AND APPELLEES STAN HAMILTON



Before McMILLIN, P.j., Diaz, And King, JJ.

The opinion of the court was delivered by: Diaz, J.

DATE OF JUDGMENT: 07/31/1997

TRIAL JUDGE: HON. LEE J. HOWARD

COURT FROM WHICH APPEALED: OKTIBBEHA COUNTY CIRCUIT COURT

NATURE OF THE CASE: CIVIL - TORTS - OTHER THAN PERSONAL INJURY AND PROPERTY DAMAGE

TRIAL COURT DISPOSITION: TRIAL COURT GRANTED DIRECTED VERDICT ON TORT CLAIMS AND PUNITIVE DAMAGES. JURY AWARDED PLAINTIFF/APPELLANT $2000 PURCHASE PRICE OF WHEELCHAIR.

¶1. J.C. and Debra Johnson appeal the trial Judge's decision granting a directed verdict in favor of the appellees, Diversified Health Services, Inc. and Stan Hamilton. The Johnsons argue (1) that the trial court erred in applying the wrong standard of proof in directing its verdict in favor of the appellees and (2) that the directed verdict was against the overwhelming weight of the evidence. Finding their arguments without merit, we affirm.

FACTS

¶2. On March 14, 1990, Garry Johnson was standing near a highway when a car struck him, causing serious injury. As a result, Garry was left with a severe head injury, two broken legs, two broken ribs, and is now in a semicomatose state. Due to Garry's serious injuries, his parents and the appellants in this case, J.C. and Debra Johnson, were in need of a wheelchair with special features and attachments. Upon Garry's release from the University Medical Center, his parents received a quote from Abbey Foster, a medical equipment provider, for an Enduro-Optima wheelchair. The Johnsons discussed the matter with Stan Hamilton, owner and operator of Diversified Health Services, Inc., and decided to purchase a comparable wheelchair from Diversified. Hamilton then went to the Johnson home to measure Garry for a wheelchair. On October 16, 1990, the Johnsons were notified that the wheelchair they had ordered had been received and that they could come and pick it up. The Johnsons paid Hamilton with a check for $2,000 and were instructed to leave the payee's name off the check. Hamilton pocketed the money from the check then billed Medicaid for the wheelchair. According to Hamilton, the double billing was an honest mistake and as soon as he realized his error, he reimbursed Medicaid for the overcharge.

¶3. The Johnsons were unsuccessful in fitting Garry in the wheelchair they had purchased from Diversified, so they were forced to order a special chair from the Blake Clinic in Jackson. J.C. Johnson then returned the original wheelchair to Diversified. According to Mr. Johnson, Hamilton contacted him some time later and told him that nothing could be done with the wheelchair and advised Mr. Johnson to come back and pick up the chair. On December 13, 1992, the Johnsons' home burned, and the wheelchair was destroyed in the fire.

¶4. On March 21, 1991, the Johnsons filed suit against Diversified and Stan Hamilton seeking $2,000 for the amount paid for the wheelchair, compensatory damages, punitive damages, and attorney's fees. The trial began on July 29, 1997, during which time Hamilton denied knowing that the Johnsons were angry about the wheelchair they had purchased and denied intentionally defrauding either the Johnsons or Medicaid. At the close of the Johnsons' case-in-chief, Diversified moved for a directed verdict alleging that the Johnsons had failed to prove any fraud or gross negligence on the part of Diversified which would justify the imposition of punitive damages. The trial Judge agreed and allowed the jury to consider only the Johnsons' claim for $2,000. At the Conclusion of trial, the jury returned its verdict finding in favor of the Johnsons and assessed their damages at $2,000. The Johnsons have now filed their appeal contesting the trial court's directed verdict ruling.

DISCUSSION

I. DID THE TRIAL COURT ERR IN APPLYING THE WRONG STANDARD OF PROOF IN DIRECTING ITS VERDICT IN FAVOR OF THE APPELLEES?

¶5. The Johnsons first argue that the trial court committed reversible error when it applied an improper standard of "clear and convincing evidence" to their punitive damages claim instead of the more appropriate "preponderance of the evidence" standard of proof. The Johnsons maintain that their case against Hamilton and Diversified is exempted from the provisions of Miss. Code Ann. § 11-1-65(1)(a) (Supp. 1998) in that the "clear and convincing evidence" standard does not apply to contracts, see Miss. Code Ann. § 11-1-65(2)(a) ...


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