Opinion ID: 1443756
Heading Depth: 1
Heading Rank: 6

Heading: there is adequate evidence to support the award of punitive damages.

Text: In actions seeking recovery of punitive damages, the claimant must prove, by a preponderance of the evidence, oppressive, fraudulent, wanton, malicious or outrageous conduct by the party against whom the claim for punitive damages is asserted. I.C. § 6-1604(1) (1990). In Cheney v. Palos Verdes Inv. Corp., 104 Idaho 897, 665 P.2d 661 (1983), this Court stated the following: An award of punitive damages will be sustained on appeal only when it is shown that the defendant acted in a manner that was an extreme deviation from reasonable standards of conduct, and that the act was performed by the defendant with an understanding of or disregard for its likely consequences. The justification for punitive damages must be that the defendant acted with an extremely harmful state of mind, whether that be termed malice, oppression, fraud or gross negligence; malice, oppression, wantonness; or simply deliberate or willful. Id. at 905, 665 P.2d at 669 (citations omitted). The decision of a trial court to allow the jury to consider punitive damages rests within the discretion of the trial court. Soria v. Sierra Pac. Airlines, Inc., 111 Idaho 594, 611, 726 P.2d 706, 723 (1986). The standard of review for punitive damages is to determine if the trial court abused its discretion in allowing the jury to consider punitive damages. Spence v. Howell, 126 Idaho 763, 772, 890 P.2d 714, 723 (1995). This Court has interpreted the abuse-of-discretion standard as a substantial evidence standard. Garnett v. Transamerica Ins. Servs., 118 Idaho 769, 781, 800 P.2d 656, 668 (1990). In the case at hand the jury awarded $10 million in punitive damages. Monumental moved in the alternative for judgment not withstanding the verdict, new trial or remittitur. The district court granted a remittitur reducing the punitive damage award to $3.2 million or in the alternative a new trial. In Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986), this Court stated the rule that a trial court must follow when deciding a motion made pursuant to I.R.C.P. 59(a)(5): Where a motion for a new trial is premised on inadequate or excessive damages, the trial court must weigh the evidence and then compare the jury's award to what he would have given had there been no jury. If the disparity is so great that it appears to the trial court that the award was given under the influence of passion or prejudice, the verdict ought not stand. It need not be proven that there was in fact passion or prejudice nor is it necessary to point to such in the record. The appearance of such is sufficient. A trial court is not restricted to ruling a verdict inadequate or excessive as a `matter of law.' Additionally, the rule that a verdict will not be set aside when supported by substantial but conflicting evidence has no application to [a] trial court ruling upon a motion for a new trial. Quick, 111 Idaho at 768, 727 P.2d at 1196 (quoting Dinneen v. Finch, 100 Idaho 620-25, 603 P.2d 575, 579-80 (1979)), (citations omitted). Appellate review of the trial court's exercise of discretion in this regard focuses upon the reasons stated by the trial court for granting or denying a motion for new trial and/or alternative additurs or remittiturs. The trial court must state its reasons with particularity unless those reasons are obvious from the record itself. Cuddy Mountain Concrete v. Citadel Constr., 121 Idaho at 231, 824 P.2d at 162. The district court set forth its reasoning for granting the remittitur and reducing the punitive damage award to $3.2 million, stating the following concerning the amount of punitive damages: Mindful of the jury's goal of deterring Monumental and other companies from engaging in bad faith settlement of insurance claims, the court has arrived at an amount which will accomplish that goal. Therefore, a new trial will be ordered unless the plaintiff accepts punitive damages in the amount of $3,200,000, which represents 5% of Monumental's annual profit, in addition to the $120,000 compensatory and $3,800 contractual damages awarded. The court finds this amount to be sufficient to deter Monumental, or similarly situated insurance companies, from future bad faith settlement of claims and that this amount is great enough to get the company's attention. It is well established in this state that punitive damages may be awarded when the defendant has committed fraud. Umphrey v. Sprinkel, 106 Idaho at 710, 682 P.2d at 1257. Additionally, exemplary damage awards are appropriate when the defendant is engaged in deceptive business practices operated for profit posing danger to the general public. Id. The jury found that Monumental had made fraudulent misrepresentations, and evidence in the record supports that finding. In general, the primary purpose behind an award for punitive damages is to deter similar conduct from happening again in the future. Umphrey, 106 Idaho at 710, 682 P.2d at 1257. It is well settled that punitive damage are not favored in the law and should be awarded only in the most unusual and compelling circumstances, and are to be awarded cautiously and within narrow limits. Manning v. Twin Falls Clinic & Hosp., 122 Idaho 47, 52, 830 P.2d 1185, 1190 (1992). A case similar to the case before the Court supports the district court's imposition of punitive damages. Linscott v. Rainier Nat'l Life Ins. Co., 100 Idaho 854, 606 P.2d 958 (1980). In Linscott, parents purchased three medical insurance policies for their daughter. Id. at 856, 606 P.2d at 960. The daughter died almost a year following the purchase of the policies, after spending 57 days in various hospitals. Rainier declared its intent to rescind the policies on the ground that the insured had not disclosed her epilepsy, which the insurer claimed not to insure. Id. The trial court awarded $20,000 in punitive damages, and this Court found that the award was supported by the record: The evidence therefore shows, first, that Rainier Life's refusal to honor the policies was totally unjustified; and, second, that even had it proved that [the daughter] had epilepsy and that she had not disclosed this on the application forms, it still attempted to go further than it could have by claiming to rescind the policies. The evidence suggests that the insurance company was acting in bad faith. Id. at 861, 606 P.2d at 965. In Linscott the Court denied recovery for mental anguish; however, the case was decided before White, which recognized the tort of bad faith for this type of insurance case. The facts of this case establish deceptive marketing practices by Monumental which are likely to continue if not deterred. The facts also establish bad faith denial of benefits practices which will continue if not deterred. The district court determined that a $3.2 million punitive damage award would deter Monumental and other companies. The district court arrived at this amount by calculating 5% of Monumental's annual profit. This is a reasonable method of determining an appropriate amount for deterrent purposes.