Volume 265 — Virginia Reports

Plaintiffs filed separate suits against the defendant, alleging that defendant failed to distribute proceeds from a settlement of claims for work performed by plaintiffs and defendant for another entity. Compensatory and punitive damages were sought on claims of breach of contract and conversion of property. The trial court ordered a plaintiff to choose between its tort theory of conversion and its contract theory of assumpsit. At trial, the judge sustained a motion to strike the claim for punitive damages. The jury returned a verdict in favor of the plaintiffs, but the trial court granted defendant's motion to strike, set aside the verdict, and entered judgment in favor of the defendant. This appeal followed. 1. A joint venture exists where two or more parties enter into a special combination for the purpose of a specific business undertaking, jointly seeking a profit, gain, or other benefit, without any actual partnership or corporate designation. 2. The trial court properly instructed the jury concerning the evidence necessary to find a joint venture. 3. The trial court's authority to set aside a jury verdict can only be exercised where the verdict is plainly wrong or without credible evidence to support it. If there is a conflict in the testimony on a material point, or if reasonable persons may differ in their conclusions of fact to be drawn from the evidence, or if the conclusion is dependent on the weight to be given the testimony, the trial judge cannot substitute his conclusion for that of the jury merely because he would have voted for a different verdict if he had been on the jury.<page_number>Page 335</page_number> 4. The record is more than adequate to support the jury's finding, and the trial court erred by substituting its own view of the evidence. The evidence reveals that a joint venture was created with shared management responsibilities and the expectation of shared profits. The trial court erred in holding otherwise. 5. The trial court's ruling that the claims were solely based on a breach of contract theory and that, therefore, an action in tort is not appropriate, misapprehends the nature of the relationship created between the parties and the law that applies. 6. The rights, duties, and obligations of joint venturers and of members of syndicates, as between themselves, depend primarily upon the terms of the contract by which they assumed that relationship. They are also affected, however, by certain general principles which operate in the absence of specific provisions in the contract, or sometimes in conjunction with such provisions. These principles are much the same as, or at least are clearly analogous to, those which govern the relations of partners. The rules of law governing the rights, duties, and liabilities of joint venturers are substantially the same as those which govern partnerships. 7. There is no express contract which establishes this joint venture. The evidence more than amply establishes an implied contract for a joint venture. To the extent that this implied agreement does not address an issue, the law of partnership is applied. 8. The Virginia Uniform Partnership Act governs relations among the partners and between the partners and the partnership except as provided in a partnership agreement and to the extent that the agreement does not violate certain specific statutory requirements. If the issue in question is not addressed by the partnership agreement or the Act, "the principles of law and equity" apply. 9. At common law, ordinarily one partner was not permitted to sue another partner before settlement of all partnership business occurred. Even at common law, an exception to the general rule was made for circumstances such as those presented in this case, where the partnership is for a single venture or special purpose which has been accomplished, and nothing remains to be done except to pay over the claimant's share. 10. Nothing in the Act abridges the common law exception. Rather, the Act expands the exception by providing that a partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business, to enforce that partner's rights. 11. A cause of action for conversion lies independent of an action in contract and may provide a separate basis, distinct from the contract, upon which one partner may sue another. The trial court erred in holding to the contrary. 12. The tort of conversion encompasses any wrongful exercise or assumption of authority over another's goods, depriving him of their possession; and any act of dominion wrongfully exerted over property in denial of the owner's right, or inconsistent with it. The trial court erred in holding that the elements of conversion were not proved.<page_number>Page 336</page_number> 13. Here, the creation of a joint venture with the expectation of "split" profits was proven. Upon completion of the objective of the joint venture, all that remained was the collection and distribution of accounts receivable, when difficulties arose in the collection of sums due to the joint venture, a further agreement was reached between the joint venturers to authorize defendant to negotiate and settle the claim. Defendant received $250,000 but refused to pay any of the proceeds to plaintiffs. Upon the evidence presented, the jury was entitled to find that defendant without justification wrongfully withheld settlement proceeds from plaintiffs. None of the elements to sustain a cause of action for conversion are missing. 14. Compensatory damages are awarded as compensation for the pecuniary loss — as amends or recompense for the injury inflicted. Exemplary damages are something in addition to full compensation, and something not given as plaintiff's due, but for the protection of the public, as a punishment to defendant, and as a warning and example to deter him and others from committing like offenses. 15. The theory upon which exemplary, punitive, or vindictive damages, sometimes called "smart money," are allowed is not so much as compensation for the plaintiff's loss as to warn others, and to punish the wrongdoer if he has acted wantonly, oppressively, recklessly, or with such malice as implies a spirit of mischief, or criminal indifference to civil obligations. 16. Exemplary damages are allowable only where there is misconduct or malice, or such recklessness or negligence as evinces a conscious disregard of the rights of others. where the act or omission complained of is free from fraud, malice, oppression, or other special motives of aggravation, damages by way of punishment cannot be awarded, and compensatory damages only are permissible. 17. willful or wanton conduct imports knowledge and consciousness that injury will result from the act done. The act done must be intended or it must involve a reckless disregard for the rights of another and will probably result in an injury. Ill will is not a necessary element. 18. Proof of actual malice is not necessary. Malice may be inferred from circumstances. No evil intent can be presumed from a mere mistake, or misadventure. An absence of evil purpose is an absence of malice. No mere inadvertence, mistake, or accidental occurrence can be malicious, although negligent. 19. Viewing the evidence in the light most favorable to the plaintiffs, they and defendant were joint venturers for a particular purpose. They agreed to split revenues equally. Upon completion of the venture, billing problems arose. Empowered with the authority to settle, defendant accepted $250,000 in full satisfaction of outstanding claims of the joint venture. In breach of its duty of loyalty, duty of care, and obligation of good faith and fair dealing, defendant did not inform plaintiffs that it had received the settlement, which came to light six months later. If reasonable persons, upon the facts presented, could differ regarding whether the conduct in question was so willful and wanton as to show a conscious disregard for the rights of others, the trial court may not remove the issue of punitive damages from the jury's consideration. The trial court erred in doing so in this case.<page_number>Page 337</page_number> 20. The trial court erred in refusing to submit the issue of punitive damages to the jury and in setting aside the verdict of $100,000 in favor of appellant and entering judgment for the defendant. The jury's verdict is reinstated and the case is remanded to the trial court with directions to enter judgment on the verdict and empanel a jury to hear evidence and decide appellant's claim for punitive damages.