Opinion ID: 726057
Heading Depth: 2
Heading Rank: 1

Heading: evergreen's claim for punitive damages

Text: 26 At the conclusion of the proof the district court dismissed Evergreen's claim for punitive damages. 3 EPC appeals this decision, which is reviewable de novo, arguing that it was entitled to pursue this claim pursuant to its breach of contract claim. MMCC argues that the claim for punitive damages should have been dismissed since the prima facie business tort claim was dismissed. 27 Because the lower court entertained the punitive damages claim pursuant to the breach of contract claim, we will not dismiss it with the prima facie business tort claim. However, we affirm the lower court's decision to dismiss the punitive damages claim for failure to show any harm to the general public by MMCC's breach of contract. 28 Under New York law the purpose of awarding punitive damages is not to make the victim whole but to punish the defendant and to deter egregious conduct. E.g., Rocanova v. Equitable Life Assurance Society of the U.S., 83 N.Y.2d 603, 612 N.Y.S.2d 339, 342, 634 N.E.2d 940, 943 (1994) (vindicate public rights, not private wrongs) (citation omitted). Generally, punitive damages are not available for a breach of contract. 29 However, where the breach of contract also involves a fraud evincing a high degree of moral turpitude and demonstrating such wanton dishonesty as to imply a criminal indifference to civil obligations, punitive damages are recoverable if the conduct was aimed at the public generally [citing Walker v. Sheldon, [10 N.Y.2d 401, 223 N.Y.S.2d 488] 179 N.E.2d 497 (N.Y.1961) ]. Punitive damages are available where the conduct constituting, accompanying, or associated with the breach of contract is first actionable as an independent tort for which compensatory damages are ordinarily available, and is sufficiently egregious under the Walker standard to warrant the additional imposition of exemplary damages. Thus, a private party seeking to recover punitive damages must not only demonstrate egregious tortious conduct by which he or she was aggrieved, but also that such conduct was part of a pattern of similar conduct directed at the public generally. 30 Rocanova, 612 N.Y.S.2d at 342-43, 634 N.E.2d at 943-44 (emphasis added). Contrary to EPC's assertions, the New York standard is not limited to matters between an insured and an insurer. Cf. Franco v. English, 210 A.D.2d 630, 620 N.Y.S.2d 156, 161 (3d Dep't 1994) (applying the pattern-of-conduct requirement in a fraud case brought by investors). 31 We can assume, arguendo, that certain of MMCC's conduct is actionable as independent torts, e.g., its alleged conversion of federal trust funds and fraud and coercion in securing the promissory note and confession of judgment. We might also assume that MMCC evidenced criminal indifference to its civil obligations insofar as it grossly inflated the backcharges and failed to pay EPC for work completed, and for which it received payment from the Corps. None of this, however, evinces a pattern of conduct harming the general public. Therefore, the district court properly dismissed EPC's claim for punitive damages made pursuant to its breach of contract claim. 32