Court Opinion

ID: 9712983
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:04:27.786787+00
Date Added: 2024-06-11T18:23:15.616681
License: Public Domain

BUCHANAN, Judge.
CASE SUMMARY
Defendant-appellant Erie Insurance Company (Erie) appeals the award of punitive damages to plaintiffs-appellees Ramona Hickman (Ramona) and Nancy Smith (Smith) [hereinafter collectively referred to as Appellees].
We reverse.
FACTS
The facts most favorable to the jury's verdict reveal that on March 24, 1986, Ramona, Smith's daughter, was driving Smith's car and became involved in an accident. Ramona was waiting at an intersection to turn left, and when the traffic signal turned yellow, Ramona proceeded to turn. A vehicle driven by Gregory Davis (Davis) proceeded into the intersection while the traffic light was yellow and struck Smith's car.
Ramona received a slight contusion to her head, but was otherwise uninjured. Smith's car received approximately $1,500 in damages while Davis' car received approximately $3,000 in damages. Smith was insured by Erie, and Davis claimed he was also insured. Smith had purchased only liability and uninsured motorist insurance for the vehicle Ramona was driving, having chosen not to carry collision insurance for the vehicle involved in the accident.
Smith filed a report with Erie, and Erie responded that, based on Smith's report, Davis was at fault and Smith should collect from Davis' insurance company. After attempting to contact Davis' insurance company, Smith began to believe Davis was not insured. She contacted Erie, informing the company that Davis was not insured and that she wanted to make a claim under the uninsured motorist provision of her policy.
After Smith's initial report, Erie conducted an investigation of the accident, interviewing Davis and Ramona, and reviewing the police report of the accident. After the investigation, Erie's claim adjuster determined that Ramona was at fault and had caused the accident, and therefore decided that Erie was not liable for the damages to Smith's car under the policy. Erie then paid Davis over $2,000 for the damages to his vehicle.
Smith obtained counsel, and Smith's counsel informed Erie that Smith was seeking arbitration pursuant to Smith's policy for Smith's claim under the uninsured motorist provision. On July 24, 1986, Smith's counsel indicated he would supply the name of an arbitrator. Smith's counsel did not *322select the arbitrator until September 22, 1987.
During the fourteen month period in which Erie received no- communication from Smith or her counsel, Erie's claim adjuster assumed Smith had chosen not to pursue the matter and closed the claim file. After Smith's counsel named an arbitrator in September of 1987, Erie reopened the file but was unable to reestablish contact with Davis after repeated efforts.
Appellees brought suit against Erie on March 18, 1988, seeking compensatory damages for Ramona's injury and the damages to Smith's car, as well as punitive damages for Erie's handling of the matter. After a jury trial, Ramona received compensatory damages of $85.75 and punitive damages of $1,000. Smith received compensatory damages of $2,064.97 and punitive damages of $10,000.
ISSUE
Whether the award of punitive damages was supported by sufficient evidence?
DECISION
PARTIES CONTENTIONS-Erie argues that its conduct was not sufficiently egregious to warrant the imposition of punitive damages. The Appellees reply that the evidence demonstrates Erie acted in bad faith and that the jury correctly granted punitive damages.
CONCLUSION-The award of punitive damages was improper.
In reviewing the sufficiency of the evidence to support an award of punitive damages, we will not reweigh the evidence or reassess the credibility of the witnesses. The imposition of punitive damages will be affirmed if, considering the probative evidence and the reasonable inferences arising therefrom, a reasonable trier of fact could conclude that such damages were proven by clear and convincing evidence. Bud Wolf Chevrolet, Inc. v. Robertson (1988), Ind., 519 N.E.2d 135.
Our supreme court in Travelers Indem. Co. v. Armstrong (1982), Ind., 442 N.E.2d 349, determined that punitive damages should not be allowed upon evidence that is merely consistent with a hypothesis of mail-ice, fraud, gross negligence or oppressiveness. Instead, additional evidence is required that is inconsistent with the hypothesis that the tortious conduct was a result of a mistake of law or fact, honest error of judgment, overzealousness, mere negligence or some other noniniquitous human failing. The court also concluded that punitive damages are recoverable only upon proof by clear and convincing evidence.
In Orkin Exterminating Co. v. Traina (1986), Ind., 486 N.E.2d 1019, the supreme court expanded further on the evidence needed to sustain a punitive damages award. The court explained:
"Just as the defendant in a criminal action is cloaked with a presumption of innocence, the defendant, in a claim for punitive damages, is cloaked with the presumption that his actions, though tor-tious, were nevertheless noniniquitous human failings, le. that he is not guilty of the quasi-crime alleged. Were it otherwise, there would be no restraint upon the award of punitive damages upon conflicting inferences."
Id. at 1023 (second emphasis supplied).
The supreme court reaffirmed the need for additional evidence in Bud Wolf, supra:
"We stated [in Travelers] that punitive damages in contract actions may be allowable upon evidence proving malice, fraud, gross negligence or oppressiveness if accompanied by further evidence 'inconsistent with the hypothesis that the tortious conduct was the result of a mistake of law or fact, honest error of judgment, overzealousness, mere negligence or other noniniquitous human failing.' Travelers, 442 N.E.2d at 362."
Bud Wolf, supra at 137 (emphasis supplied).
Applying the supreme court's standards, in order to support the award of punitive damages, the record must contain evidence from which the jury could infer Erie's actions were tortious and there must also be additional evidence which excludes the possibility that the tortious conduct was the *323result of some "noniniquitous human failing." We therefore consider the evidence admitted at trial, without weighing it, to determine whether the rigorous supreme court standard has been met.
The Appellees assert the record "is replete with references to conduct alleging 'bad faith,'" Appellees' Brief at 6. Smith testified that Erie was uncooperative in its handling of her claim, and that Erie had cancelled her insurance in late 1987, claiming she had failed to pay her premiums, while she asserted she had paid her premiums.1 The Appellees also point to the fact that Erie refused to pay their claim, but paid Davis $2000, even though he had no insurance and the Appellees claimed he was at fault.
While this evidence could, arguably, support a determination that Erie acted with malice, fraud, gross negligence or oppressiveness, the evidence is also consistent with a hypothesis that Erie's actions were the result of a mistake of fact, a negligent investigation and handling of Smith's claim, or that Erie's agents were merely overzealous in their actions. As the supreme court stated in Bud Wolf, supra, there must be further evidence inconsistent with the inference that the conduct was the result of some noniniquitous human failing. Conflicting inferences are not enough. Orkin, supra.
The Appellees' claim that Erie's indifference to Davis' insurance status supports the award of punitive damages is based on Smith's mistaken belief that the uninsured motorist provision of her insurance policy covered damage to her vehicle if the driver of her vehicle was at fault in an accident with an uninsured motorist. The policy provided that Erie would not cover the insured for any accident if the insured was more than 50% at fault. Record at 597. If Ramona was more than 50% at fault, then, pursuant to the policy, the damage would not be covered even if Davis were uninsured. Davis' insurance status, after Erie determined Ramona was at fault, was therefore not relevant and Erie's payment to Davis alone cannot, as a matter of law, support an award for punitive damages.
Our search for any evidence which is inconsistent with a theory that Erie's agents merely made mistakes or acted negligently is unavailing. Any probative evidence would be sufficient because we will not reweigh the evidence. As the evidence supports conflicting inferences, the presumption that Erie's actions, though tor-tious, were the result of noniniquitous human failings, mandates a conclusion that the evidence is insufficient, as a matter of law, to support punitive damages. See Orkin, supra.
The situation we consider is substantially similar to that considered by this court in Miller v. Farmers Ins. Group (1990), Ind.App., 560 N.E.2d 1261, which dealt with an appeal from the entry of summary judgment against a plaintiff's claim for punitive damages. The evidence established that the plaintiff was involved in an accident and had filed a claim with his insurance carrier. After reviewing the plaintiff's report, the carrier indicated it believed the plaintiff was not at fault. After further investigation, however, the carrier determined that the plaintiff was more than fifty percent at fault and therefore, under the terms of his policy, the carrier was not Hable for the plaintiff's damage. The trial court granted the insurance company's motion for summary judgment, and the plaintiff appealed.
This court concluded:
""We believe the case exemplifies the exact situation and distinction that Armstrong sought to focus upon.... There is no evidence that is inconsistent with the hypothesis that the insurer's conduct, if tortious at all, was not merely the result of negligence, overzealousness, ete. Thus, there was no clear and convincing evidence to support a claim for punitive damages."
Miller, supra at 1263 (emphasis in original).
Although Miller involved the entry of summary judgment, its analysis of the le*324gal sufficiency of facts almost identical to those we consider is persuasive.
The evidence in the record is also comparable to the evidence considered by the supreme court in Armstrong, supra. In Armstrong, the supreme court concluded that although the evidence was consistent with a hypothesis of fraudulent intent, it was nonetheless insufficient to support an award of punitive damages because the evidence was not inconsistent with a hypothesis of honest, human error. Id. at 364. Likewise, while the evidence against Erie could perhaps establish fraudulent, or some other iniquitous intent, it is not also inconsistent with a hypothesis of honest, human error. The additional quantum of evidence required by the supreme court is simply not present here.
Based on a careful review of the record, and giving due deference to the principle that we will not reweigh the evidence, we must conclude the record does not support an award of punitive damages. See Armstrong, supra; Miller, supra.
Judgment reversed and remanded for further proceedings consistent herewith.
SHIELDS, J., concurs.
STATON, J., dissents with opinion.

. No claim was made for wrongful cancelation of insurance.