Wal-Mart Liable After Credit Snafu Leads to Jail
(CN) - Wal-Mart is liable for punitive damages after a credit-card snafu led to a customer going to jail, the South Carolina Court of Appeals ruled.
Prakash and Urmila Solanki went to Wal-Mart for its Black Friday sale in November 2009. After the self-checkout register malfunctioned, employee Ryan Smalls helped them complete their purchase.
Smalls manually stenciled Prakash Solanki's debit card because the cashier-assisted register was also not working properly.
However, when the transaction was hand-keyed into the system, it charged the credit card of Robin Martin with the $144.70 purchase.
Four days later, Martin told the Spartanburg County Sheriff's Department that her credit card had been stolen and that two unauthorized charges were on her account, including Solanki's purchase.
Wal-Mart complied with the sheriff's request for the receipt, and Solanki was arrested in Georgia in April 2010. He spent six nights in jail and was transferred to South Carolina, where he posted bail.
He was indicted for financial transaction card theft and fraud, but those indictments were dropped in August 2010.
The Solankis sued Wal-Mart and the sheriff's office for false imprisonment, defamation, gross negligence, assault, battery, malicious prosecution and intentional infliction of emotional distress.
The trial court ruled in the Solankis' favor on its negligence claim against Wal-Mart, awarding them $50,000 in actual damages and $225,000 in punitive damages.
Wal-Mart appealed the punitive damages award, arguing that its actions were not wanton and reckless.
The South Carolina Court of Appeals disagreed.
"The trial court determined that it would be reasonable to conclude Wal-Mart was responsible for the error in processing the credit card. Furthermore, the trial court concluded Wal-Mart was responsible for the creation and production of the evidence used to arrest Mr. Solanki and was in the best possible position to point out the discrepancies to the police officers," Judge Aphrodite K. Konduros wrote on the court's behalf.
Judge H. Bruce Williams dissented from his colleagues, stating that the Solankis failed to prove evidence of willful or wanton conduct on the part of Wal-Mart.
He cited Smalls' testimony that Wal-Mart followed its procedure in cases like these, with the credit-card number keyed in twice and a customer service manager performing a manual override to complete the transaction. "Although it is regrettable that Mr. Solanki spent six nights in jail as a result of this incident, the Solankis presented no evidence that Wal-Mart's actions of complying with law enforcement's request were unreasonable or that Wal-Mart intentionally and recklessly processed Mr. Solanki's credit card transaction," he wrote.