Opinion ID: 1722984
Heading Depth: 1
Heading Rank: 6

Heading: punitive damages a brief review

Text: State Farm contends by assignment of error No. 35 that the trial court erred in granting plaintiff's instruction P-1A on punitive damages. Although the instruction is brought to our attention along with many other assignments of error, it appears to be the core of this suit. However, before responding to it, we think it appropriate to review some of our cases on punitive damages so their decisions and some of the reasons therefor will be unfaded before us when we reach the decisive issues. Beginning with Hood v. Moffett, 109 Miss. 757, 69 So. 664 (1915), this Court announced the rule on punitive damages to be as follows: This is a suit for damages alleged to have been sustained because of the breach of a contract, and the rule is, with probably two exceptions, and within neither of which does the case at bar come, that such damages are not recoverable in such an action unless the act or omission constituting the breach of the contract amounts also to the commission of a tort . .. 109 Miss. at 767, 69 So. at 666. In 1926 in American Ry. Express Co. v. Bailey, 142 Miss. 622, 631, 107 So. 761, 763 (1926), the rule was altered somewhat. We stated: The general rule is that punitive damages are not recoverable for the breach of a contract, unless the breach is attended by some intentional wrong, insult, abuse, or gross negligence, which amounts to an independent tort. It is noteworthy that the case continued to state: While the evidence in the case at bar shows negligence on the part of the forwarding company, it negatives any intentional or willful wrong, or gross negligence, which amounts to the commission of a tort. 142 Miss. at 631, 107 So. at 763. Later in the case of D.L. Fair Lumber Co. v. Weems, Miss., 15 So.2d 505 (1943), in which both actual and punitive damages were granted by the trial court and were awarded by the jury, we stated the following: The jury were authorized to and did find punitive damages in the sum of $700. On this point the declaration, proof and instructions thereunder are grounded upon the failure of the lumber company to repair or restore the fence. This proof took the form of letters to the lumber company protesting its failure to rebuild the fence. There is no proof that the original breaking of the fence by Willis was wilful or grossly negligent. The wilfulness complained of was the failure of the lumber company to do what it was not legally obliged to do. Punitive damages were improperly awarded, and the defendants requested instruction to exclude such damages ought to have been given. 15 So.2d at 507-508. On suggestion of error after a new trial in D.L. Fair Lumber Co. v. Weems, 196 Miss. 201, 16 So.2d 770 (1944), the judgment was modified and affirmed. This Court used the following language in expressing its reason for upholding an award of punitive damages: Nor may escape be made by the contention that the duty which here was so wilfully and oppressively flouted was one arising by contract and that punitive damages may not be recovered for a mere contract violation. We have held, and now reaffirm it, that punitive damages may be recovered for breach of contract when the breach is attended by such gross negligence or willful wrong as to amount to a tort, [citations omitted] and it needs no authority to sustain the proposition that the breaking down and destruction of another's fence is a tort, and when done under circumstances of such gross and persistent wrong as to manifest an indifference to the consequences and of the rights of others, that it is a tort which will justify punitive damages; and that is what the jury found, and was well supported by the evidence and finding in this case. 196 Miss. at 221-22, 16 So.2d at 773. We observe elsewhere in D.L. Fair Lumber Co., that the facts before the court on retrial evidenced the willful destruction of three quarters of a mile of plaintiff's fence over his protestations. The punitive award was approved because the intentional wrong was so gross that it merited redress by way of punitive damages. This selfsame rule was considered in Seals v. St. Regis Paper Company, 236 So.2d 388 (Miss. 1970). There the court considered the propriety of a punitive damage instruction in a suit concerning the striking of a child by an automobile driven by an employee of the defendant company. We stated: Appellant indicates by his argument that the verdict of the jury should be upheld because under the facts of the case the jury had a right to impose punitive damages. While the evidence relative to the degree of negligence of Smith is stronger on this trial than it was on the first trial, we do not think that this was a case for the imposition of punitive damages. Punitive damages may be recovered for a willful and intentional wrong, or for such gross negligence and reckless negligence as is equivalent to such a wrong. Smith was not guilty of willful or intentional wrong, and we do not think that his course of conduct was such as discloses a reckless indifference to the consequences of his act without any substantial effort to avoid the accident. 236 So.2d at 392. [2] Continuing in Lincoln Nat. Life Ins. Co. v. Crews, 341 So.2d 1321 (Miss. 1977), this theme moves forward. It holds, The remainder of the verdict in the amount of $2,308.28 constitutes an award of punitive damages. There is nothing in the record capable of supporting a finding that Lincoln, in defending the suit and relying upon the provisions of the policy, acted other than in good faith. The mere fact that Lincoln rejected the claims under the provisions of its policy and defended the suit and lost does not justify imposition of punitive damages. Punitive damages are not recoverable for breach of contract unless such breach is attended by some intentional wrong, insult, abuse or gross negligence which amounts to an independent tort. (Citations omitted). The judgment will be affirmed in the amount of $691.72. It will be reversed and judgment will be entered here for appellant as to the award of punitive damages in the amount of $2,308.28... . (Emphasis added.) 341 So.2d at 1322. This brings us to Standard Life Ins. Co. of Indiana v. Veal, 354 So.2d 239 (Miss. 1978), which reviews the cases mentioned as well as others. In pertinent part it states: In its second assignment of error defendant contends that this is not a proper case for assessment of punitive damages against it. We recognize that punitive damages are assessed as an example and warning to others and should be allowed only with caution and within narrow limits. In Snowden v. Osborne, 269 So.2d 858 (Miss. 1972), the reason for allowing punitive damages was stated as follows: Exemplary or punitive damages are those, of course, which are in addition to the actual or compensatory settlement. They are granted in the nature of punishment for the wrongdoing of the defendant and as an example so that others may be deterred from the commission of similar offenses thereby in theory protecting the public. (Citations omitted). 354 So.2d at 247. In citing with approval other cases, it held: Further in Fowler Butane Gas Co. v. Varner, 244 Miss. 130, 141 So.2d 226 (1962), the court held: In order to warrant the recovery of punitive damages, there must enter into the injury some element of aggression or some coloring of insult, malice or gross negligence, evincing ruthless disregard for the rights of others, so as to take the case out of the ordinary rule. (244 Miss. at 150, 151, 141 So.2d at 233). With reference to punitive damages in suits for breach of contract we stated in Progressive Casualty Insurance Company v. Keys, 317 So.2d 396 (Miss. 1975) the following: (b) Punitive damages are not recoverable for the breach of a contract unless such breach is attended by intentional wrong, insult, abuse or such gross negligence as to consist of an independent tort. (Citations omitted). (Emphasis added.) 354 So.2d at 247. The court's reason for affirming the punitive damage award included the following comment: Of course, if an insurance company has a legitimate reason or an arguable reason for failing to pay a claim, punitive damages will not lie, but in this case the defendant had no reason to contest the claim filed with it. We therefore hold that punitive damages were allowable. 354 So.2d at 248. The term arguable reason is now frequently before the Court. In Blue Cross & Blue Shield of Miss. v. Campbell, 466 So.2d 833 (Miss. 1984), concerning such statement, we held, We have come to term an insurance carrier which refused to pay a claim when there is no reasonably arguable basis to deny it as acting in bad faith, and a lawsuit based upon such an arbitrary refusal as a bad faith cause of action. 466 So.2d at 842. The term arguable reason does not diminish the rule regarding the resolution of punitive damages because the assessment is no different in bad faith cases than in other punitive damages cases. Standard Life v. Veal, supra, provides that punitive damages will not lie if the carrier has an arguable reason for denying the claim. It does not necessarily follow, however, that punitive damages are mandated by the absence of an arguable reason. This is so because the denial of a claim could be the result of an honest mistake or oversight  ordinary or simple negligence  not reaching the heightened status of an independent tort as set out in Veal, supra, and other cases.