Judge orders sides to whittle down $6.5M defamation award

Six days after a jury awarded him $6.5 million in punitive damages, a Beaufort real estate agent falsely accused of child molestation has been ordered to negotiate with the defendant to pare down the settlement.

A Beaufort County jury sided Friday with Matthew McAlhaney, a founding partner of Town and Country Real Estate, who sued Richard McElveen Sr., his wife, Linda, and their son, Richard Jr. McAlhaney claimed the McElveens conspired in March 2004 to have him brought up on child molestation charges to help win a custody dispute with the woman he was dating at the time. The juryawarded McAlhaney more than $91,000 in actual damages and $6.5 million in punitive damages from McElveen Sr.

McElveen's attorney, Scott Lee of Beaufort, appeared before Court of Common PleasJudge J. Ernest Kinard on Thursday to ask for a retrial. He argued that the "grossly excessive" punitive damages levied by the jury at the conclusion of the week-long trial showed the panel acted irresponsibly.

"He's 57 years old, taking care of two grandkids and doesn't have a lot of earning capacity left," Lee said. "That figure is outrageous and an arbitrary deprivation of property."

McElveen Sr. is the former owner of the Battery Creek Marina, which closed in early 2006.

Kinard denied Lee's motion for a new trial but ordered the two sides to negotiate a smaller settlement.

"Based on his admitted net worth of $2 million, if he had to pay ($6.5 million), he'd be in bankruptcy tomorrow," Kinard said. "It has to be cut. I don't want to put him out of business and put his grandkids in an orphanage. On the other hand, the jury found that (McElveen) committed egregious acts and found for punitive damages."

"McAlhaney was obviously harmed by being accused of being a child molester," Kinard added. "This is a small town. It was in the paper and now you're stigmatized for life, even after you're exonerated."

Kinard gave Lee and McAlhaney's attorney, Robert Mathison of Hilton Head Island, 45 days to agree on punitive damages or to appeal the case.

McAlhaney was arrested in March 2004 and charged with aggravated assault and first-degree criminal sexual conduct for allegedly molesting McElveen's grandson, who was 4 at the time.

McAlhaney was then dating Richard McElveen Jr.'s ex-wife, who was embroiled in a custody battle with the McElveens for custody of her two sons. In his suit, McAlhaney claimed the family set out to "discredit (McAlhaney) and show that (the woman) was unfit to have custody as the result of keeping company with a person of such low character." McElveen Sr. was ultimately awarded custody of the children, though it is unclear when.

The charges against McAlhaney were dropped in February 2005, and he filed suit against the McElveens six months later, seeking $18 million in damages.

Walking out of court Thursday morning, McAlhaney said he was satisfied with the outcome of the trial.

"It's been a long time coming," he said. "It's nice to see the system work, and I feel vindicated."