Opinion ID: 1267395
Heading Depth: 1
Heading Rank: 4

Heading: showing of malice

Text: The appellant also claims that the trial court erred in effectively ruling that he had to show malice during the first phase of his Hayseeds trial before he was entitled to proceed to the second, or punitive damage, phase. As has already been discussed, a clear predicate to recovering punitive damages in a Hayseeds claim is that the plaintiff substantially prevail on his underlying claim, and, as has already been discussed, the trial court, without committing reversible error, found that the appellant did not substantially prevail on his underlying claim. Accordingly, the Court concludes that the trial court's ultimate conclusion that the appellant was not entitled to a Hayseeds punitive damages trial was proper. The trial court was also correct in saying that malice must be shown in a Hayseeds case before punitive damages may be recovered. In Hayseeds itself, we said: ... [P]unitive damages for failure to settle a property dispute shall not be awarded against an insurance company unless the policyholder can establish a high threshold of actual malice in the settlement process. By actual malice we mean that the company actually knew that the policyholder's claim was proper, but willfully, maliciously and intentionally denied the claim. We intend this to be a bright line standard, highly susceptible to summary judgment for the defendant, such as exists in the law of libel and slander, or the West Virginia law of commercial arbitration. See, e.g., N.Y. Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) and Board of Education v. [W. Harley] Miller [Inc.], 160 W.Va. 473, 236 S.E.2d 439 (1977). Unless the policyholder is able to introduce evidence of intentional injurynot negligence, lack of judgment, incompetence, or bureaucratic confusion the issue of punitive damages should not be submitted to the jury. Furthermore, a willingness to settle a case of alleged arson can no longer be used as evidence of bad faith because the concept of bad faith short of actual malice no longer has any place in the law of property damage insurance cases. In fact, to make the matter entirely explicit, an offer of settlement can never be used to show actual malice nor be used against an insurance carrier in any way. Hayseeds, 177 W.Va. at 330-31, 352 S.E.2d at 80-81 (footnotes omitted). We do, however, note one troubling aspect of the present case. As has already been discussed, by apparent agreement of the parties, the trial of the Hayseeds claim was divided into two parts, the first of which related to compensatory damages, and the second of which related to punitive damages. Punitive damages were clearly not an issue in the first part, and malice was not a necessary element of the issues which were tried in the first part. In the circumstances before us in this case, we believe that it was wholly contradictory and erroneous for the trial court to hold that the appellant was precluded from proceeding to the second phase of this case because he failed to introduce evidence of malice in the case tried, after the court clearly limited the case tried to compensatory damages.