Opinion ID: 2630381
Heading Depth: 2
Heading Rank: 2

Heading: Did the District Court Abuse Its Discretion in Denying Sullivan Construction's Motion to Amend Its Pleadings to Add Claims for Punitive Damages?

Text: On November 7, 2006, Sullivan Construction sought to amend its pleadings to assert claims for punitive damages against both Todd and Petersen. To recover punitive damages, the claimant must prove, by clear and convincing evidence, oppressive, fraudulent, malicious or outrageous conduct by the party against whom the claim for punitive damages is asserted. I.C. § 6-1604(1). When a party moves to amend a pleading to include a claim for punitive damages, [t]he court shall allow the motion to amend the pleadings if, after weighing the evidence presented, the court concludes that, the moving party has established at such hearing a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages. I.C. § 6-1604(2). In the instant case, the district court did not conduct the weighing process required by the statute. Rather, it based its ruling on two factors. First, it stated that the punitive damages claim is really somewhat covered by the civil claim that's pending. The court did not set forth its reasoning for arriving at that conclusion. [A]n award of punitive damages serves the dual function of deterrence and expressing society's outrage. In contrast, compensatory damages are defined as damages that `will compensate the injured party for the injury sustained, and nothing more; such as will simply make good or replace the loss caused by the wrong or injury.' Curtis v. Firth, 123 Idaho 598, 609, 850 P.2d 749, 760 (1993) (quoting Black's Law Dictionary 352 (5th ed.1983)). The purposes which may make a punitive damage award appropriate are not satisfied by an award of purely compensatory damages. Id. The district court's statement that Sullivan Construction's request for punitive damages was already covered by its claim for compensatory damages is contrary to the law. Second, the district court stated, I don't think it's a claim that gives rise to punitive damages or that the case falls within the category of a punitive damages claim even before I get to the point of whether one party has a reasonable likelihood, or whatever that term is that is set forth in the statute, of prevailing on a punitive damages claim. Again, the court did not explain its reasoning. The determination of whether a party should be permitted to assert a claim for punitive damages is not based upon the type of case or claim. As we said in Myers v. Workmen's Automobile Insurance Co., 140 Idaho 495, 503, 95 P.3d 977, 985 (2004) (quoting from Linscott v. Rainier National Life Insurance Co., 100 Idaho 854, 858, 606 P.2d 958, 962 (1980)), It is not the nature of the case, whether tort or contract, that controls the issue of punitive damages. The issue revolves around whether the plaintiff is able to establish the requisite `intersection of two factors: a bad act and a bad state of mind.' Whatever the district court meant by its reference to the category of case for which punitive damages could be awarded, it erred. The district court did not conduct the analysis required by Idaho Code § 6-1604(2). By failing to do so, it abused its discretion. We therefore vacate its decision denying Sullivan Construction's motion to amend it pleadings to add claims for punitive damages. When the court considers the motion on remand, it must take into account the jury's findings that Todd and Petersen each committed the tort of tortious interference with Sullivan Construction's prospective business advantage and that they acted in concert when doing so.