By Noreen Marcus, FloridaBulldog.org
An extraordinary feud between Palm Beach billionaires that began on country club tennis courts has reached the Florida Supreme Court, where it will influence the law of punitive damages.
The combatants are Isaac “Ike” Perlmutter, former Marvel Entertainment CEO and one of President-elect Donald Trump’s biggest financial backers, and Harold Peerenboom, founder of Mandrake Management, a leading Canadian executive-search firm.
About 14 years ago the two men fought over the tennis program at their ritzy waterfront community. The garden-variety squabble morphed into a soap opera with hate mail, DNA snatching and multiple rounds of court fights. Well-known Miami lawyer Roy Black represents Perlmutter.
The case already has made law in Florida. Tuesday’s announcement that the Supreme Court will hear Perlmutter v. Peerenboom means the law-making will continue.
The case established that since DNA is personal property, its owner can pursue legal claims for violations of this property right. Perlmutter claims a sample of his DNA was taken, without his knowledge, from a paper he touched.
The Supreme Court is expected to answer a related question: Can weaponizing DNA justify an award of punitive damages? Peerenboom allegedly snatched Perlmutter’s DNA to link him to a hate-mail campaign although he knew others were responsible.
Whatever the high court decides will apply not only to the Perlmutter case but to other situations and state courts generally. If the justices adopt an appellate court’s Perlmutter ruling, trial judges will have wide latitude to prevent punitive damage claims from even reaching juries.
“The court could add yet another test that someone claiming punitive damages has to pass,” said Philip Padovano, a Tallahassee appellate lawyer and former district court judge.
A HATE MAIL CAMPAIGN
The Fourth District Court of Appeal ruled against Perlmutter. Then his lawyers asked the Supreme Court to review the West Palm Beach court’s decision. Court documents lay out this chronology:
Neighbors Perlmutter and Peerenboom got caught up in a dispute about their community’s tennis instructor, who sued Peerenboom for defamation. He started receiving hate mail falsely accusing him of child molestation and murder.
Peerenboom hired a private investigator to confirm his belief that Perlmutter and his wife, Laura, sent out the hate mail. During the investigation, the Perlmutters’ DNA was lifted surreptitiously from documents they touched at a deposition.
Peerenboom reported to the police and media that the DNA results linked the Perlmutters to the hate-mail campaign. Then Peerenboom filed a complaint against them with allegations related to the hate mail; when the Perlmutters learned about the DNA grab, they counterclaimed against Peerenboom and his insurer.
The matter landed in front of Palm Beach Circuit Judge Cymonie Rowe, who found that almost all the hate mail, including the vicious screeds, was distributed by a former employee of Peerenboom’s Canadian company and another man.
that almost all the hate mail, including the vicious screeds, was distributed by a former employee of Peerenboom’s Canadian company and another man.
The judge saw no evidence of the Perlmutters’ involvement in those mailings. They did send around a few articles that presented Peerenboom in a negative light as a businessman, but Rowe said it was too late for Peerenboom to claim they defamed him. She ruled for Perlmutter.
That didn’t end the litigation, however. Perlmutter wanted a jury to punish Peerenboom with a punitive damage award. Rowe agreed the jury should consider that claim, but the 4th DCA overturned her ruling.
On Tuesday the Supreme Court announced it will review the 4th DCA’s Perlmutter decision. The main reason: Two other district courts interpreted the punitive damage law differently, creating a conflict that only the high court can resolve.
VETTING PUNITIVE CLAIMS
Whatever the justices decide will touch on a perennially hot topic: When can juries award sky-high damages to punish outrageous misconduct?
The Supreme Court must determine how vigilant a gatekeeper the trial judge should be when it comes to punitive damage claims. Traditionally the judge doesn’t scrutinize evidence of misconduct before letting the jury weigh in — as long as the claim is “reasonable.”
In Perlmutter’s case, Judge Rowe ruled the jury could consider his demand that Peerenboom pay significant damages for participating in a “civil conspiracy to defame [the Perlmutters] and falsely implicate them in criminal conduct.”
On appeal, the full 4th DCA disagreed. “We reverse because the record evidence was insufficient to permit claims for punitive damages,” Judge Burton Conner wrote for the 10-2 majority.
Rowe based her decision on the wrong standard, the opinion says. She should have rejected Perlmutter’s “ambiguous” evidence that Peerenboom “knowingly engage[d] in wrongful conduct.”
Judges Martha Warner and Robert Gross dissented. Warner suggested the majority was rewriting the law so that judges will screen punitive-damage claims, rather than letting juries weigh the evidence as legislators intended.
“We should not add words to the statute or deviate from legislative direction,” she wrote.
“The interpretation by the 4th DCA adds a requirement that wasn’t there before in case law,” Padovano said.
The 4th DCA certified the “great public importance” of deciding once and for all whether judges should make “preliminary” calls about the adequacy of evidence supporting punitive-damage claims.
When the Supreme Court accepted the Perlmutter case, the justices seemed to agree.
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