A three-judge panel for the 11th Circuit Court of Appeals has reinstated a 2003 arbitration panel's punitive damages award to a Florida homeowner, finding that pest-control company Orkin Exterminating Inc. failed to deliver on its lifetime contract for termite protection.
Florida homeowner Collier Black's Ponte Vedra home suffered repetitive termite infestations while Black was under a contract with Orkin. In 2003, Black brought suit against Orkin for neglect of contract and accused the company of not having proper permits. The panel made explicit factual findings supporting a claim for gross negligence and fraud against Orkin and awarded Black $4.2 million, including $2.25 million in punitive damages, $750,000 in compensatory damages and $1.2 million in attorneys' fees.
Orkin appealed to a U.S. District Court, which vacated the arbitration panel's award of punitive damages, finding the award "evinced a manifest disregard of the law."
However, in the Feb. 23 ruling the 11th Circuit found that "the arbitration panel at most merely misinterpreted or misapplied the law and not that it deliberately disregarded it."
In addition to reinstating the punitives, the court also remanded the case to the district court to grant Black interest from the date of the interim award.
As a result of Black's suit, the Florida attorney general's office has opened a racketeering investigation against Orkin.