Opinion ID: 2320868
Heading Depth: 1
Heading Rank: 6

Heading: The Trial Court Charged the Jury on Breach of Contract

Text: Although this is St. Paul's final argument, we address it first because if the trial court did not charge the jury on breach of contract, The Birth Center could only recover compensatory damages from St. Paul if some other theory provided a basis for recovery. As we discuss in this opinion, neither 42 Pa.C.S.A. § 8371 nor any other relevant cause of action provide a basis for recovery. Thus, Birth Center's compensatory damage award depends on whether The Birth Center asserted a contract cause of action and whether the trial court charged the jury regarding that claim. The Superior Court properly determined that The Birth Center asserted a breach of contract claim. Birth Center's Complaint requests compensatory damages based upon its insurance contract with St. Paul. Complaint ¶¶ 76-77. The Complaint provides: 76. By failing to settle the Norris claim within the limits of the insurance policy of The Birth Center, the Defendants herein breached their contractual obligations to The Birth Center under said policy of insurance, by failing to protect The Birth Center and their [sic] assets. 77. The Defendants herein, in the performance of the said contract, owed to The Birth Center, a fiduciary duty to act in good faith, and to use due care in representing The Birth Center's interests.    WHEREFORE, Plaintiff The Birth Center demands judgment against Defendants in an amount in excess of ... $50,000, plus additional compensatory and/or consequential damages allowed by law, together with interest thereon, Court costs, attorney's fees and such other relief as the Court deems just and proper. Id. Therefore, it is clear that The Birth Center alleged a claim sounding in contract. Additionally, the trial court charged the jury with regard to The Birth Center's contract cause of action. The court charged the jurors, inter alia, that if they found that St. Paul breached its contract with The Birth Center, that they were to award compensatory damages if the breach caused the damages, and the damages were reasonably foreseeable at the time the parties entered into the contract and at the time of the breach. Specifically, the trial judge charged, among other things, that: where one party to a contract breaches that contract, the other party may recover for those injuries which have been proved to you with reasonable certainty.    If you find that defendant St. Paul breached its contract with the Birth Center, you must then decide based on all of the evidence presented what amount of money will compensate the Plaintiff for those injuries, which were a direct and foreseeable result of the breach by St. Paul which the parties could reasonably foresee at the time they made that contract and at the time of the Defendant's breach of the contract. (N.T., 5/10/96, at 246-247 emphasis added). [8] The jury returned a verdict finding that St. Paul acted in bad faith in its handling of the underlying Norris case, and that the bad faith conduct was a substantial factor in bringing about harm to The Birth Center in the amount of $700,000. The jury verdict sufficiently established that the jury considered the breach of contract claim. The jury found that St. Paul acted in bad faith; St. Paul had a contractual duty to act in good faith; therefore, St. Paul breached its contract. In reviewing the propriety of an order granting or denying judgment notwithstanding the verdict, we must determine whether there was sufficient competent evidence to sustain the verdict. Wenrick v. Schloemann-Siemag Aktiengesellschaft, 523 Pa. 1, 564 A.2d 1244, 1246 (1989). We view the evidence in the light most favorable to the verdict winner and give him or her the benefit of every reasonable inference arising there from while rejecting all unfavorable testimony and inferences. Moure v. Raeuchle, 529 Pa. 394, 604 A.2d 1003, 1007 (1992). Moreover, [a] judgment n.o.v. should only be entered in a clear case and any doubts must be resolved in favor of the verdict winner. Id.; see, Atkins v. Urban Redevelopment Authority of Pittsburgh, 489 Pa. 344, 414 A.2d 100 (1980). Finally, a judge's appraisement of evidence is not to be based on how he would have voted had he been a member of the jury ... Moure, 604 A.2d at 1007 quoting Brown v. Shirks Motor Express, 393 Pa. 367, 143 A.2d 374 (1958). A court may not vacate a jury's finding unless the evidence was such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant. Moure, 604 A.2d at 1007 quoting Cummings v. Nazareth Borough, 427 Pa. 14, 233 A.2d 874 (1967). While we respect Judge Koudelis' opinion that St. Paul's refusal to engage in settlement negotiations was not in bad faith, the jury was the finder of fact. It found that based upon all of the evidence that The Birth Center proved by clear and convincing evidence that [St. Paul] acted in bad faith in handling the underlying case of Norris v. The Birth Center.  We also note that Judge Clouse, who tried the underlying case, stated, the day of trial, that he believed that St. Paul's settlement posture was in bad faith and inconsistent with its fiduciary duty to the Birth Center. Specifically, Judge Clouse expressed his opinion that: [t]here is a clear indication of bad faith here. I think the insurance company is not proceeding in a responsible manner and is not discharging its fiduciary obligation to its insureds in this case ... I think this insurance company has operated in a highly irresponsible manner. I want it clear that they have turned this high/low offer of $300,000.00 down in which [sic] I think is a breach of their fiduciary responsibility to their insureds. And I want that clear on this record. (N.T., 2/16/93, at 15-19, emphasis added). While Judge Clouse's opinion is arguably irrelevant to the jury's determination that St. Paul acted in bad faith, it is a compelling indication of how a reasonable jury could have come to a similar conclusion that St. Paul acted in bad faith. While a judge may disagree with a verdict, he or she may not grant a motion for J.N.O.V. simply because he or she would have come to a different conclusion. Indeed, the verdict must stand unless there is no legal basis for it. Without agreeing or disagreeing with Judge Koudelis or Judge Clouse, we view the evidence in the light most favorable to Birth Center, the verdict winner, and give it the benefit of every reasonable inference arising therefrom while rejecting all unfavorable testimony and inferences. From that perspective, we are unable to conclude that no reasonable jury could have found that St. Paul acted in bad faith. Therefore, although, like Judge Koudelis, we may not have reached the same verdict as the jury, there was sufficient evidence to sustain the verdict and a reasonable basis for the jurors to have found, from the evidence that St. Paul acted in bad faith. Consequently, the trial court should not have granted the motion for a directed verdict based on St. Paul's argument that it did not act in bad faith.