Title: Monahan v. GMAC Mortgage Corp.

State: vermont

Issuer: Vermont Supreme Court

Document:

Monahan v. GMAC Mortgage Corp. (2003-508); 179 Vt. 167; 893 A.2d 298

2005 VT  110

[Filed 16-Sep-2005]

[Motion for Reargument Denied 16-Nov-2005]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                2005 VT  110

                                No. 2003-508


  William Monahan and Lisa Monahan	         Supreme Court

                                                 On Appeal from
       v.	                                 Rutland Superior Court


  GMAC Mortgage Corporation,	                 October Term, 2004
  Allstate Insurance Company and
  The Holden Agency, Inc.


  Richard W. Norton, J.

  Allan R. Keyes and R. Joseph O'Rourke of Ryan Smith & Carbine, Ltd.,
    Rutland, for  Plaintiffs-Appellees.

  Andre D. Bouffard of Downs Rachlin Martin PLLC, Burlington, for
    Defendant-Appellant GMAC Mortgage Corp.


  PRESENT:  Dooley, Johnson and Skoglund, JJ., and Howard, Supr. J. and
            Allen, C.J. (Ret.), Specially Assigned	

        
       ¶  1.  JOHNSON, J.  Defendant GMAC Mortgage Corporation (GMAC) appeals
  from the superior court's denial of its renewed motion for a judgment as a
  matter of law following a jury verdict awarding plaintiffs compensatory,
  consequential, and punitive damages for their claims of breach of escrow
  and breach of the implied covenant of good faith and fair dealing.  GMAC
  asserts that the court erred by failing to set aside the verdict on the
  implied covenant count, and the punitive damages award, because plaintiffs'
  evidence was legally insufficient to justify submission of these issues to
  the jury.  As part of its argument, GMAC asserts that the claim for breach
  of the implied covenant of good faith and fair dealing should have been
  analyzed under the standard for bad faith handling of a first-party
  insurance claim.  We reject GMAC's general sufficiency argument on the
  good-faith-and-fair-dealing claim because we conclude that, although the
  evidence supported competing inferences, a reasonable jury was entitled to
  draw those inferences in favor of plaintiffs.  We also decline GMAC's
  invitation to analyze the case as a first-party bad-faith insurance claim
  because, due to GMAC's breach of contract, plaintiffs did not enjoy a
  first-party insurance relationship with the insurer involved here. 
  Accordingly, we affirm the jury's verdict on the good-faith-and-fair-dealing
  count, and the award of compensatory and consequential damages.  GMAC also
  challenges the sufficiency of plaintiffs' evidence to support the punitive
  damages award.  We vacate the punitive damages award because none of the
  evidence of GMAC's direct conduct and the conduct of other entities
  attributable to it demonstrate actual malice sufficient to support
  plaintiffs' claim for punitive damages.  GMAC also appeals the decision to
  award plaintiffs attorney's fees.  We reverse and remand for recalculation
  of the fee award. 
   
       ¶  2.  On appeal from the denial of a motion for judgment as a
  matter of law under Vermont Rule of Civil Procedure 50(b), we must review
  all the evidence in the light most favorable to the nonmoving party,
  excluding the effect of any modifying evidence.  Gero v. J.W.J. Realty, 171
  Vt. 57, 59,