Opinion ID: 59468
Heading Depth: 2
Heading Rank: 2

Heading: The Muñozes Cross-Appeal

Text: In their cross-appeal, the Muñozes argue that the district court erred in granting State Farm's motion for directed verdict on the issue of malice and punitive damages. The standard of review for a motion for a directed verdict is outlined in Boeing Company v. Shipman : If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motion[] is proper. 411 F.2d 365, 374-75 (5th Cir.1969) (en banc), overruled on other grounds by Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331 (5th Cir.1997). The standard governing directed verdicts remains the same on appeal. Tutor v. Ranger Ins. Co., 804 F.2d 1395, 1398 (5th Cir.1986). Under Texas law, punitive damages may be awarded only if the claimant proves by clear and convincing evidence that the harm ... results from: (1) fraud; (2) malice; or (3) gross negligence. TEX. CIV. PRAC. & REM.CODE § 41.003(a). Even if the insurer has no reasonable basis to deny or delay payment of the claim, the plaintiff may not recover punitive damages on that basis alone. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 18 (Tex.1994) (internal quotation marks omitted). Punitive damages are justified only when bad faith is accompanied by malicious, intentional, fraudulent, or grossly negligent conduct. Id. The insured must demonstrate that the insurer `was actually aware that its action would probably result in extraordinary harm not ordinarily associated with breach of contract or bad faith denial of a claim-such as death, grievous physical injury, or financial ruin.' State Farm Fire & Cas. Co. v. Simmons, 963 S.W.2d 42, 47 (Tex.1998) (quoting Moriel, 879 S.W.2d at 24). The Muñozes claim that evidence presented at trial demonstrates an intentional and fraudulent campaign to have Mr. Muñoz arrested for arson, despite State Farm's knowledge that there was no supporting evidenceeither direct or circumstantial. This assertion lacks merit. As the district court found, there is no evidence that State Farm's demands for financial documents were fraudulent, grossly negligent, or resulted in extraordinary harm. Thus, the district court properly granted State Farm's motion for directed verdict as to punitive damages.