Mathias v. Accor Economy Lodging, Inc.

United States Court of Appeals for the Seventh Circuit · Torts

TortsPunitive damagesWillful and wanton conductpunitive damagesIllinois lawwillful and wanton conductrecklessnessknown risk

Facts

The defendant motel knew for years that bedbugs were infesting multiple rooms after its exterminator repeatedly found them and recommended spraying every room for $500, but the motel refused comprehensive treatment. Management received repeated guest complaints, gave refunds, acknowledged a "major problem with bed bugs," instructed clerks to call them "ticks," and even rented rooms marked "Do not rent" or "DO NOT RENT UNTIL TREATED." When the plaintiffs checked in, they were assigned Room 504 even though it had been designated not to be rented until treated and had not been treated. The plaintiffs were bitten by bedbugs and sued, alleging willful and wanton conduct supporting punitive damages.

Issue

Whether the evidence permitted punitive damages under Illinois law by showing willful and wanton conduct rather than mere negligence, and whether punitive damages of $186,000 per plaintiff on top of $5,000 compensatory damages violated due process as excessive.

Rule

Under Illinois law, punitive damages are permissible for willful and wanton conduct, including gross negligence or recklessness in the sense of an unjustifiable failure to avoid a known risk. Due process does not impose a rigid single-digit or 4-to-1 punitive-to-compensatory ratio; punitive damages must be assessed in light of the wrongfulness of the conduct, the need for deterrence, the possibility of profit from misconduct, the likelihood of escaping detection, and the practical need to make suit worthwhile, while wealth alone cannot justify punishment.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

A budget hotel in Peoria, Illinois received repeated monthly reports from its pest contractor that several rooms had a recurring flea infestation. The contractor recommended treating the entire floor for a modest fee, but the hotel's general manager refused, instructed front-desk staff not to mention fleas to guests, and kept renting rooms that housekeeping had marked "hold until treated." One guest later suffered painful bites and proved $3,000 in compensatory damages.

Under the majority opinion's approach, which is the strongest argument for allowing punitive damages?

Explanation. Punitive damages are permissible where the defendant's conduct is willful and wanton, including recklessness in the sense of an unjustifiable failure to avoid a known risk. Here, management had actual notice, rejected inexpensive comprehensive treatment, concealed the problem, and rented rooms flagged as unsafe. Those facts go beyond simple negligence. Small compensatory damages do not bar punitive damages. (Derived from Mathias v. Accor Economy Lodging, Inc. (n.d.).)