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Zachair, Ltd. v. John A. Driggs and The Driggs Corporation, No. 2865, September Term, 1999

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DAMAGES - PUNITIVE DAMAGES - REDUCTION OF JURY AWARD BY TRIAL COURT Trial court may review jury's award of punitive damages for excessiveness - trial court's review of jury's award of punitive damages is legal function - where amount of punitive damages awarded by jury outweighed gravity of wrong, exceeded defendants' ability to pay, and was excessive in comparison to other punitive damages awards in Maryland, trial court properly reduced award. DAMAGES - EVIDENCE - SUFFICIENCY OF EVIDENCE DAMAGES FOR CONVERSION OF MINING PRODUCTS TO ESTABLISH

Plaintiff's evidence supported with reasonable certainty jury's award of damages for conversion of mining products even though evidence did not establish precisely what mining products were taken, where jury priced products in middle of range of prices for all plaintiff's mining products, and evidence established: period of time during which mining by defendant took place; amount of materials taken; type of mining products on property and prices of various products -- where defendant failed to provide plaintiff with mining records and plaintiff could not otherwise determine with precision what was taken, defendant cannot complain of resulting uncertainty.

REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND

No. 2865 September Term, 1999 ___________________________________

ZACHAIR, LTD.

v.

JOHN A. DRIGGS AND THE DRIGGS CORPORATION

___________________________________ Davis, Sonner, Alpert, Paul E. (Ret., specially assigned) ____________________________________ Opinion by Alpert, J. ____________________________________

- 2 Filed: November 30, 2000

In this appeal, we are asked to resolve a long-standing dispute involving a 424-acre tract of land in Prince George's County known as Hyde Field, on which both an airport and a sand and gravel mining operation are located. In the course

of this resolution, we address interesting problems concerning, inter alia, punitive damages and the conversion of mining products. PARTIES The appellant and cross-appellee is Zachair, Ltd. ("Zachair"), the current owner of the property. Zachair was

formed by Dr. Nabil Asterbadi for the purpose of acquiring Hyde Field at a foreclosure auction. The former owner,

Washington Executive Airpark Limited Partnership ("the LP"), had purchased Hyde Field in 1988. To effectuate that

purchase, the LP had given notes, totaling nearly $4,000,000.00 and apparently secured by deeds of trust, to Nationsbank1 and to the previous owner of the property. The appellees and cross-appellants are John Driggs ("Driggs") and The Driggs Corporation ("TDC"). Driggs owned

and controlled Washington Executive Airport, Inc. ("WEA"), which was the sole general partner of the LP. Thus, Driggs

The note was initially given to Nationsbank's predecessor, Maryland National Bank. -1-

1

controlled the LP that owned Hyde Field.

The LP contracted

with WEA to operate the airport, and WEA in turn subcontracted the job to Freedom Air, Inc.2 The LP contracted with Southern

Maryland Sand and Gravel Corporation ("Southern"), which was also owned and controlled by Driggs, to run the mining operation. In 1992, Southern was replaced as mining vendor by

TDC, another corporation owned and controlled by Driggs. FACTS Dr. Asterbadi was an amateur pilot who took flying lessons at Hyde Field. buying the property. He eventually became interested in Asterbadi initiated discussions with

Driggs in 1991, but Driggs was not interested in selling. Asterbadi subsequently learned from TDC's in-house counsel, James Berard, that both Driggs and the LP were in bankruptcy proceedings in the United States Bankruptcy Court for the District of Maryland and that the LP's notes to Nationsbank and the previous owner were in default. Unbeknown

to Driggs, Asterbadi began negotiations later in 1991 to purchase the notes. In 1994, Asterbadi finally purchased the Asterbadi eventually foreclosed on the

notes for $500,000.00.

deeds of trust and an auction was held on November 3, 1994.

2

Driggs did not have an interest in Freedom Air, Inc. -2-

Zachair was the high bidder at the auction, purchasing the property for $1,500,000.00. Zachair presented evidence at trial that established that Driggs and the various entities he controlled threw a number of obstacles in the path of Zachair's acquisition of Hyde Field. In particular, Zachair presented evidence that,

after Asterbadi purchased the notes from Nationsbank and the previous owner of Hyde Field, the LP filed a motion in connection with its bankruptcy proceedings to establish that the notes were invalid, then appealed from the denial of the motion. In this way, the LP delayed the foreclosure auction. Zachair also presented evidence that Jeffrey Frost - who was then counsel for Driggs, counsel to TDC, a member TDC's board of directors, and a member of WEA's board of directors -- attended the auction along with two of Driggs's friends, Charles Shapiro and Bruce Jaffe. the auction by raising numerous objections. The evidence indicated that, after Zachair purchased the property at auction, Driggs, TDC, and the LP filed exceptions in the Circuit Court for Prince George's County to have the sale set aside.3 WEA and TDC refused to vacate the The men disrupted

property and continued to conduct airport and mining

3

See generally Md. Rules 14-207(d) and 14-305(d). -3-

operations and to reap the profits therefrom, turning over only a little more than $3,000.00 in mining profits to Zachair. Even after the exceptions to the sale were denied and the sale was ratified on February 3, 1995, WEA and TDC refused to vacate the property, and an eviction was scheduled for March 17, 1995. On that date, TDC filed an emergency

motion to stay the eviction on the ground that an appeal to this Court had been noted from the ratification of the sale. An appeal bond was never filed, however, and the eviction was rescheduled for, and carried out on, March 29, 1995. The evidence indicated that Southern, which held a mining permit issued by the Bureau of Mines of the Maryland Department of the Environment, and which allowed TDC to use the permit to mine Hyde Field, refused to permit Zachair to use the permit and refused to consent to a transfer of the permit to Zachair. In order to obtain the permit, Zachair had

to file a declaratory judgment action in the Circuit Court for Baltimore City to establish that Southern's consent to the transfer was not necessary.4 The declaratory judgment action

was not resolved until February of 1996, and Southern then

See generally Md. Code (1982, 1996 Repl. Vol., 2000 Cum. Supp.),

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