Cengage Advantage Books: Foundations of the Legal Environment of Business 2nd Edition by Marianne Jennings, Albert Napier, Marianne Jennings

Exercise 12

The Mathiases checked into a Motel 6 and were bitten extensively by bedbugs. Upon investigation, they learned that the managers and owners of the motel had been warned by guests, employees, and exterminators alike that there were bedbugs in the rooms. The exterminator offered to spray the motel each year for $600, but the motel refused. As a result, the bugs remained and propagated. The Mathiases filed suit, seeking punitive damages. The trial court awarded them $5,000 compensatory damages and $186,000 punitive damages. The motel appealed the punitive damage award as excessive. Is the award excessive? Should the punitive damages be reversed? Why do you think the hotel wants to have a court decision on this suit? [ Mathias v. ACCR Economy Lodging, Inc., 347 F.3d 672 (7th Cir. 2003).]