Opinion ID: 1284869
Heading Depth: 1
Heading Rank: 2

Heading: The punitive damage issue raised by Young's cross-appeal is next considered.

Text: Unquestionably Young sought both compensatory and punitive damages. The city's motion to withdraw Young's punitive damage claim from the jury was sustained, trial court essentially holding such recovery may not be had against a municipal corporation under Chapter 613A, The Code. The basic purpose for allowance of punitive damages, sometimes referred to as smart money, is articulated in Claude v. Weaver Construction Co., 261 Iowa 1225, 1229-1230, 158 N.W.2d 139, 143-144 (1968). Ordinarily, actual damage must be established as a condition precedent to an award of smart money. Holden v. Construction Machinery Company, 202 N.W.2d 348, 359-360 (Iowa 1972). It is also well settled, punitive damages are not recoverable as a matter of right. In the same vein it is understood the allowance of smart money rests with the fact finder, usually the jury. 22 Am.Jur.2d, Damages, § 240; 25 C.J.S. Damages § 117(2). More to the point, this court has repeatedly sanctioned allowance of exemplary damages, where appropriate, by way of punishment to the actor and as a deterrent to others. See e. g., Holden and Claude, both supra; Katko v. Briney, 183 N.W.2d 657, 662 (Iowa 1971); Sebastian v. Wood, 246 Iowa 94, 100-101, 66 N.W.2d 841, 844 (1954); 22 Am.Jur.2d, Damages, § 237; 25 C.J.S. Damages § 117(1). In one of our early cases, Bennett v. City of Marion, 102 Iowa 425, 426, 71 N.W. 360 (1897), this court held punitive damages were not allowable against a municipal corporation. But Bennett was decided when the principle of governmental immunity was firmly entrenched except for a few instances in which liability was imposed by statute. Cf. Bauman v. City of Waverly, 164 N.W.2d 840 (Iowa 1969). Furthermore, Bennett observed the then existent general precept that punitive damages were allowable only if statutorily authorized. Today liability is the rule, immunity the exception. Implicit in Ch. 613A, which worked this change, is a reversal of the criterion already mentioned concerning the necessity for specific statutory authority in order to award punitive damages. As hereafter revealed, our Governmental Subdivision Tort Claims Act is so general the conclusion is inescapable that punitive damages are now recoverable in a proper case unless the statute specifically forbids them. Significantly, there is no such restriction in Ch. 613A. Formerly the right to recover punitive damages even against private corporations was questionable. However, Northrup v. Miles Homes, Inc. of Iowa, 204 N.W.2d 850, 858-860 (Iowa 1973), settled that issue. Cf. McCarthy v. J. P. Cullen & Son Corp., 199 N.W.2d 362, 368 (Iowa 1972). Even so we must still determine the status of governmental bodies with reference to punitive damages now that Ch. 613A has abolished their immunity from tort liability. Seemingly, the weight of authority is against allowing such damages absent a statute expressly allowing them. See Euge v. Trantina, 422 F.2d 1070, 1074 (8th Cir. 1970); Fox v. City of West Palm Beach, 383 F.2d 189, 195 (5th Cir. 1967); Smith v. District of Columbia, 336 A.2d 831 (D.C. App.1975); Fisher v. City of Miami, 172 So.2d 455 (Fla.1965); Foss v. Maine Turnpike Authority, 309 A.2d 339, 345-346 (Me. 1973); Desforge v. City of West St. Paul, 231 Minn. 205, 42 N.W.2d 633, 634 (1950); Chappell v. City of Springfield, 423 S.W.2d 810, 812-815 (Mo.1968); Brown v. Village of Deming, 56 N.M. 302, 243 P.2d 609, 618 (1952); Ranells v. City of Cleveland, 41 Ohio St.2d 1, 321 N.E.2d 885, 887-889 (1975); Lineberger v. City of Greenville, 178 S.C. 47, 182 S.E. 101, 102 (1935); Cole v. City of Houston, 442 S.W.2d 445, 451 (Tex. Civ.App.1969); Annot., 19 A.L.R.2d 903, 908; 57 Am.Jur.2d, Municipal, Etc., Tort Liability, §§ 318-320; 63 C.J.S. Municipal Corporations § 947. Only a few jurisdictions now depart from this rule, and someNew York and Vermontdo so only under most compelling circumstances. See Hennigan v. Atlantic Refining Company, 282 F.Supp. 667, 682-683 (E.D.Pa.1967) (applying Pennsylvania law), aff'd 400 F.2d 857 (3d Cir. 1968), cert. denied 395 U.S. 904, 89 S.Ct. 1739, 23 L.Ed.2d 216 (1969); City of Covington v. Faulhaber, 177 Ky. 623, 197 S.W. 1065, 1066 (1917); Mastrodonato v. Town of Chili, 39 A.D.2d 824, 333 N.Y.S.2d 89, 90 (1972); Willett v. Village of St. Albans, 69 Vt. 330, 38 A. 72, 74-75 (1897). It still remains, those courts which deny punitive damage recovery do so on public policy grounds. Although stated in various forms by different tribunals, the reasons usually given are well summarized in Fisher v. City of Miami, 172 So.2d at 457: Basically, the justification for a punitive award is to punish the offender and to deter others from committing similar wrongs.    Punishment and deterrence being the principal supports for allowing this type of money award, the courts have historically declined to allow it in actions against municipal corporations for torts committed by their employees. While the wrongdoing employee is vulnerable to a punitive award,   the municipality is not.    The public policy which motivates the conclusion appears to be sound. Since punishment is the objective, the people who would bear the burden of the awardthe citizensare the self-same group who are expected to benefit from the public example which the punishment makes of the wrongdoer. Another aspect of the matter is the rule which permits evidence of the wealth of a tortfeasor as a measure of the amount of punitive damages which should be awarded.    The theory isthe wealthier the wrongdoer, the greater the award. Otherwise stated, a relatively small sum might be adequate to punish a poor man. A much greater sum, for the same wrong, would be needed to punish a rich man. If this were allowed against municipalities, it would permit evidence of the unlimited taxing power as the measure of a proper verdict. This is often suggested as an adequate justification for denying an award of punitive damages against a city.    The deterrence element likewise adds little justification for this type of award against a municipality. In the first place it is to be assumed that the municipal officials will do their duty and if discipline of a wrongdoing employee is indicated, appropriate measures will be taken without a punitive award. Further, a huge award against the City would not necessarily deter other employees who generally would be unlikely to be able to pay a judgment assessed against them personally. We find persuasive countervailing arguments to each of those expressed above. Virtually the same objections have been made and rejected as to private corporations. Furthermore, if a governmental subdivision be held answerable in punitive damages, more care will go into the selection and training of its agents and employees. This will itself have a deterrent effect. Neither are we convinced the unlimited wealth of a municipality is an obstacle to such an award. In that regard this court has held evidence of ability to pay is admissible. Hall v. Montgomery Ward & Co., 252 N.W.2d 421, 424 (Iowa 1977). Understandably, the amount to be awarded must, as in other cases, be left to the sound judgment of the jury, subject to judicial review. Pursuing the subject at hand, we have held Ch. 613A removes all common law tort immunity previously accorded municipalities except as limited by § 613A.4. Symmonds v. Chicago, M., St. P. & P. R. Co., 242 N.W.2d 262, 264 (Iowa 1976); Jahnke v. Incorporated City of Des Moines, 191 N.W.2d at 782. Also, Ch. 613A stands as a comprehensive and thorough treatment of governmental liability for torts. This view is thus articulated in Dan Dugan Transport Co. v. Worth County, 243 N.W.2d 655, 657 (Iowa 1976): Even a casual review of Chapter 613A, The Code, confirms the legislature intended to treat all substantive and procedural aspects of the subject matter, including imposition of liability, exemptions, limitations, notice, insurance, compromise, settlement, and payment. More to the point, there is presently nothing which suggests the general assembly intended to prohibit assessment of punitive damages against governmental subdivisions. In fact our State Tort Claims Act (Chapter 25A, The Code), buttresses the foregoing conclusion. At the time Ch. 613A was enacted, Ch. 25A had been in effect for several years. Punitive damages are therein specifically precluded. See § 25A.4. Moreover, it is assumed the legislature was aware of this § 25A.4 prohibition when Ch. 613A was enacted. Additionally, the Iowa State Tort Claims Act is patterned after that of the federal government, which also specifically proscribes punitive damages. 28 U.S.C. § 2674. Consequently, failure to include a like immunity for municipal corporations can scarcely be attributed to inadvertence or oversight. Finally, this court is satisfied the availability of punitive damages, where appropriate, in tort actions against governmental subdivisions will further deter unfounded and oppressive peace officer conduct under the guise of official action. Cf. Stone v. Powell, 428 U.S. 465, 96 S.Ct. 3037, 3048, 49 L.Ed.2d 1067 (1976); Mapp v. Ohio, 367 U.S. 643, 656-657, 81 S.Ct. 1684, 1692, 6 L.Ed.2d 1081 (1961); Elkins v. United States, 364 U.S. 206, 217, 80 S.Ct. 1437, 1444, 4 L.Ed.2d 1669 (1960). See generally M. Belli, Punitive Damages, Trial, Dec. 1977, at 40-44. It is to us apparent any question going to recovery of punitive damages from a municipal corporation is determinable by application of the same legal principles as in cases against private corporations. See Northrup, 204 N.W.2d at 859-860. Had the legislature intended otherwise, it could easily have so stated, as was the case in our State Tort Claims Act. This may, of course, still be done by amending Ch. 613A. In brief, we now hold that under proper circumstances punitive damages are recoverable in tort claim actions against governmental subdivisions. Trial court erred in holding otherwise. From this flows the conclusion that in the event evidence on retrial suffices to create a fact issue on punitive damages the jury shall be accordingly instructed. REVERSED ON BOTH APPEALS AND REMANDED FOR NEW TRIAL.