Harvey-Jones v. Coronel

Panel: Graeff, Kehoe, Beachley, JJ. * Beachley, J. ¹⁵² In August 2016, Susan Coronel, appellee, filed a claim in the Circuit Court for Baltimore County against appellant Raychel Harvey-Jones, alleging defamation per se . Because Ms. Harvey-Jones failed to timely answer, the court, upon Ms. Coronel's request, issued an Order of Default. Following Ms. Harvey-Jones's unsuccessful motions to stay and vacate the Order of Default, the court scheduled a hearing to determine damages. At the conclusion of the hearing, the court awarded Ms. Coronel $10,000 in compensatory damages and $200,000 in punitive damages.

Ms. Harvey-Jones timely appealed and presents three questions for our review: 1. Did the Circuit Court err in awarding $10,000 in compensatory damages? 2. Did the Circuit Court err in awarding $200,000 in punitive damages where it was grossly excessive and violated due process? 3. Did the Circuit Court err in awarding an excessive monetary judgment where it was based on unverified admissions by default?

We discern no error, and affirm. FACTS AND PROCEEDINGS According to the testimony at the hearing on damages, Ms. Coronel dated a man named Michael Scott "off and on from 2012 to 2015." The conclusion of that relationship coincided with Ms. Coronel seeking $110,000 from Mr. Scott in unrelated litigation in the Circuit Court for Baltimore City. In late 2015, Mr. Scott met and subsequently began dating Ms. Harvey-Jones. ¹⁵³ At some point thereafter, someone began to harass Mr. Scott by anonymously sending him e-mails and text messages. Believing the culprit was Ms. Coronel, Mr. Scott hired Steve Brown, a private investigator.

In late February 2016, Ms. Harvey-Jones sent Mr. Scott a text message stating that Ms. Coronel was the person who had been harassing him, and that Ms. Coronel had also sent over 300 e-mails to the ⁴¹ local NBC news affiliate, resulting in her owing NBC $17,000 in damages. Ms. Harvey-Jones's text message also contained a statement of charges which purported to show that Ms. Coronel had been charged with harassment as a course of conduct, electronic mail harassment, and telephone misuse. Believing the text message to be true, Mr. Scott forwarded it to his private investigator. Mr. Brown then met with Baltimore County Police Detective Larry Rogers, the officer who purportedly authored the charging document, to verify the contents of the text message.

When Detective Rogers saw the charging document, he suspected it to be counterfeit. He noted that the charging language, dates, and some of the applicable criminal codes were missing, and he also knew that he had never charged Ms. Coronel with harassment. Detective Rogers reviewed the tracking number from the charging document and determined that the tracking number and harassment charges matched a statement of charges he had filed in 2015 against Ms. Harvey-Jones. To be certain, Detective Rogers then searched Ms. Coronel's criminal record, and verified that she had never been charged with harassment.

Near the end of March 2016, Mr. Brown informed Mr. Scott that Ms. Harvey-Jones's text was inaccurate, that the charging document was fake, and that Ms. Coronel had neither harassed NBC with 300 e-mails, nor did she ever owe NBC $17,000 in damages. Detective Rogers arrested Ms. Harvey-Jones in July 2016, and charged her with forgery of a public document. A local news website, Eye on Annapolis , posted a story about Ms. Harvey-Jones's arrest. In the comments section of the article, ¹⁵⁴ a person named "Jane Shims" claimed that "someone [was] lying or misrepresenting" what had transpired and that Ms. Coronel was "a bitter ex." Detective Rogers traced the IP address for Jane Shims, as well as other "people" who had commented on the article.

He determined that the IP addresses for Jane Shims and several other commenters all belonged to a computer in Ms. Harvey-Jones's home. In August 2016, Ms. Coronel filed a complaint against Ms. Harvey-Jones, alleging defamation per se . The complaint alleged that Ms. Harvey-Jones sent Mr. Scott a text message which contained a counterfeit charging document, as well as a false story that Ms. Coronel had sent NBC 300 e-mails and consequently owed $17,000 in damages. When Ms. Harvey-Jones failed to timely respond to the complaint, Ms. Coronel requested an Order of Default, which the court entered on October 7, 2016.

Ms. Harvey-Jones subsequently filed an untimely motion to vacate, as well as a motion for reconsideration. The court denied both motions. Ms. Coronel then requested a hearing to determine damages. At the hearing on damages, the circuit court received testimony from Ms. Coronel and Detective Rogers, as well as excerpts from Mr. Scott's deposition.

At the conclusion of the hearing, the court awarded Ms. Coronel $10,000 in compensatory damages and $200,000 in punitive damages. As stated above, Ms. Harvey-Jones timely appealed. DISCUSSION I. COMPENSATORY DAMAGES "When an action has been tried without a jury, we 'review the trial court's decision on both the law and the evidence, upholding factual findings unless clearly erroneous, but subjecting its legal conclusions to de novo review.' " Thomas v. Capital Med. Mgmt.

Assocs., LLC , 189 Md. App. 439 , 453, 985 A.2d 51 (2009) (quoting ⁴² Nationwide Mut. Ins. Co. v. Regency Furniture, Inc. , 183 Md. App. 710 , 722, 963 A.2d 253 (2009) ). ¹⁵⁵ Ms. Harvey-Jones contends that the circuit court erred by awarding $10,000 in compensatory damages because the "evidence was speculative." Essentially, Ms. Harvey-Jones argues that the circuit court was required to base its award of compensatory damages on evidence of actual harm. However, her position is contrary to Maryland law, which allows for the presumption of damages when a plaintiff establishes that a statement was defamatory per se and made with actual malice: [W]hen a plaintiff establishes that a statement was defamatory per se and, by clear and convincing evidence, demonstrates that it was made with actual malice, a "presumption of harm to reputation ... arises from the publication of words actionable per se .

A trier of fact is not constitutionally barred from awarding damages based on that presumption in [an actual] malice case." Hanlon v. Davis , 76 Md. App. 339 , 356, 545 A.2d 72 (1988) (citation omitted). In other words, if the statement is defamatory per se , damages are presumed when a plaintiff can demonstrate actual malice, by clear and convincing evidence, even in the absence of proof of harm. Samuels v. Tschechtelin , 135 Md. App. 483 , 549-50, 763 A.2d 209 (2000). We initially note that Ms. Harvey-Jones apparently concedes that her defamatory statements were made with actual malice.

Instead, Ms. Harvey-Jones asserts that there was insufficient evidence to "presume the damage to justify the compensation awarded here." Although Ms. Coronel requested $50,000 in compensatory damages, the circuit court determined that $10,000 was the appropriate award. In our view, the court did not err. In making this determination, the court stated that: [T]here isn't any showing of lost income so I find it difficult to presume $50,000 worth of damage. So the Court will award $10,000 in compensatory damages because I think that there probably is good reason to think, more likely than not, that [Ms. Coronel] diverted time from her business to meet with the detective and her lawyer, to prepare for this ¹⁵⁶ lawsuit and I have little doubt that she was upset by this turn of events, with having this information on the internet where it really can't be erased.

So I think $10,000 is a reasonable and fair amount to award for compensatory damages. The record reflects that Ms. Harvey-Jones's actions impacted Ms. Coronel's reputation on social media, Yelp, and among her acquaintances. Ms. Coronel testified that she devoted time to "set the story straight," which included meetings with her attorney and with Detective Rogers. In light of Ms. Harvey-Jones's defamatory statements, made with actual malice, we see no error in the trial court's compensatory damages award.

II

PUNITIVE DAMAGES Ms. Harvey-Jones next argues that the circuit court's award of punitive damages was "grossly excessive and violated due process." As an initial matter, we note that the basis for Ms. Harvey-Jones's argument is unclear. Although Ms. Harvey-Jones primarily cites to United States Supreme Court cases applying federal constitutional law, she also cites to Bowden v. Caldor , 350 Md. 4 , 710 A.2d 267 (1998), a case in which the Court of Appeals discussed excessive punitive damages in the context of Maryland common law. We will therefore address Ms. Harvey-Jones's argument under ⁴³ both Maryland common law and federal constitutional law. A. Maryland Common Law The Court of Appeals has identified nine legal principles that inform a court's determination of whether punitive damages are excessive.

Khalifa v. Shannon , 404 Md. 107 , 142, 945 A.2d 1244 (2008) (citing Bowden , 350 Md. at 27 -41 , 710 A.2d 267 ). In setting forth this list of considerations, the Court clarified that the list was "not intended to be exclusive or all-encompassing[,]" and that "not all of the above-summarized principles or factors are pertinent in every case involving court review of punitive damages." ¹⁵⁷ Bowden , 350 Md. at 41 , 710 A.2d 267 . Here, six of the nine Bowden factors are relevant: 1) gravity of the wrong, 2) ability to pay, 3) deterrence value, 4) legislative sanctions, 5) comparison to other awards, and 6) relationship to compensatory damages. 1 ibr.US_Case_Law.Schema.Case_Body:v1">See id. at 27-41 , 710 A.2d 267 . Because the factors limiting an award of punitive damages are principles of law, we review them de novo .

Khalifa , 404 Md. at 142 , 945 A.2d 1244 . We shall address each of the six relevant Bowden factors in turn. 1. Gravity of the Wrong "The most important legal rule in this area, applicable to every punitive damages award, is that the amount of punitive damages 'must not be disproportionate to the gravity of the defendant's wrong.' " Bowden , 350 Md. at 27 , 710 A.2d 267 (quoting Ellerin v. Fairfax Sav., F.S.B. , 337 Md. 216 , 242, 652 A.2d 1117 (1995) ). "Accordingly, in determining whether the amount of the award is disproportionate to the gravity of the defendant's conduct, it is the degree of the heinousness which is important." Id.

(citing BMW of North America, Inc. v. Gore , 517 U.S. 559 , 575, 116 S.Ct. 1589 , 134 L.Ed.2d 809 (1996) ). Here, Ms. Harvey-Jones, while on probation for criminal cyber harassment, maliciously engaged in conduct designed to harm and defame Ms. Coronel. Ms. Harvey-Jones made defamatory statements about Ms. Coronel and falsified a Baltimore County criminal charging document in an attempt to establish Ms. Coronel's criminal character. Even after being charged with criminal forgery, Ms. Harvey-Jones inferentially used fictitious names to post online comments claiming that the falsified charging document was genuine.

We note that, in ¹⁵⁸ awarding punitive damages, the circuit court expressly considered Ms. Harvey-Jones's "level of malice." In Merritt v. Craig , 130 Md. App. 350 , 746 A.2d 923 (2000), we considered whether punitive damages of $150,000 were excessive when compared with the actions of Craig, a home seller who willfully misrepresented the condition of the home's water system, and then interfered with and diverted the water system following inspection and sale of the property. We held that "Craig's conduct toward appellants was reprehensible and fully warranted punitive damages[,]" and further held that $150,000 was not disproportionate to the harm caused by Craig's actions. Id. at 371-72 , 746 A.2d 923 . Moreover, although it is difficult to quantify the extent of the harm caused by Ms. Harvey-Jones's conduct, the potential criminal penalties for Ms. Harvey-Jones's ⁴⁴ actions substantiate the seriousness of her conduct.

Under Md. Code (2002, 2012 Repl. Vol.) § 8-605(b) of the Criminal Law Article ("CR"), the counterfeiting of a public document is classified as a felony and is punishable by imprisonment for a minimum of two years and a maximum of ten years. Considering the nature of Ms. Harvey-Jones's conduct, which in our view was more serious than the conduct at issue in Merritt , a punitive damages award of $200,000 is not "disproportionate to the gravity of [appellant's] wrong." Bowden , 350 Md. at 27 , 710 A.2d 267 . 2. Ability to Pay "A second very important principle, long recognized under Maryland law, is that the amount of punitive damages 'should not be disproportionate to ... the defendant's ability to pay.' " Bowden , 350 Md. at 28 , 710 A.2d 267 (quoting Ellerin , 337 Md. at 242 , 652 A.2d 1117 ).

In Ms. Harvey-Jones's view, the court's punitive damages award was unjust because no "reliable evidence" on her ability to pay was presented at the "one-sided" hearing on damages. We disagree. We initially note that the Court of Appeals has stated that "[s]ound reasoning supports our view that a plaintiff has no obligation to establish a defendant's ability to pay punitive damages ." ¹⁵⁹ Darcars Motors of Silver Spring, Inc. v. Borzym , 379 Md. 249 , 275, 841 A.2d 828 (2004) (emphasis added). The Court reasoned: Compelling a plaintiff seeking punitive damages to present evidence of a defendant's financial condition could, on the one hand, require a plaintiff with limited financial resources to wage a complicated discovery campaign against a monetarily sated defendant.

On the other hand, it would license the plaintiff to conduct extensive pre-trial discovery of the defendant's finances to support a measure of damages that may never be awarded. Not only could the latter result in a severe invasion of the defendant's privacy, but it could also unnecessarily cost the defendant a great deal of time and money to compile all of its financial information. Id. at 275-76 , 841 A.2d 828 . Our appellate courts have upheld punitive damages awards in several cases similar to the instant case, where the defendants apparently elected not to present documentation of their assets or net worth, but where the record suggested that they had the ability to pay.

See Merritt , 130 Md. App. at 372 , 746 A.2d 923 (holding that $150,000 was not disproportionate to defendant school teacher's ability to pay where defendant owned a home and a partnership interest in a resort area in Garrett County, even though there was no evidence of the value of these interests); Darcars , 379 Md. at 278 , 841 A.2d 828 (holding that plaintiff had no obligation to establish that defendant car dealership had the ability to pay a $25,000 award of punitive damages); Khalifa , 404 Md. at 144 -45 , 945 A.2d 1244 (holding that punitive damages of $2,000,000 were not disproportionate to defendants' ability to pay where plaintiff testified that defendants owned multiple properties in various parts of the world, and holding that plaintiff was not required to prove that the properties were titled in defendants' names or that defendants had the ability to pay). Here, Ms. Harvey-Jones failed to take advantage of multiple opportunities to present evidence regarding her assets or her ability to pay punitive damages. Not only did Ms. Harvey-Jones fail to respond to Ms. Coronel's request for admissions, she also failed to appear at her deposition or at ¹⁶⁰ the hearing on damages before the circuit court. Although Ms. Harvey-Jones declined to provide any information about ⁴⁵ her finances, her deemed admissions resulting from her failure to object to Ms. Coronel's requests for admissions pursuant to Rule 2-424 permitted the court to consider that her net worth exceeded $1,000,000.

In addition, there was evidence that, following the denial of Ms. Harvey-Jones's motion to vacate the order of default, she had transferred an unencumbered property worth over $200,000 to her sibling for no consideration. In light of the record and relevant case law, we reject Ms. Harvey-Jones's argument that the punitive damages award must be vacated because there was no "reliable evidence" that she had the ability to pay. 2 3. Deterrence Value "Since one of the purposes of punitive damages is to deter the defendant from engaging in the type of conduct forming the basis for the