Court Opinion

ID: 9662521
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:11:54.091143+00
Date Added: 2024-06-11T12:26:54.749009
License: Public Domain

VANCE, Justice,
dissenting.
Respectfully, I dissent. Until now the law, as expounded by the highest court of *179this state, has never allowed the recovery of punitive damages for a breach of contract. Cumberland Telephone and Telegraph Co. v. Cartwright Creek Telephone Co., Ky., 108 S.W. 875 (1908); General Accident Fire and Life Assurance Corp. v. Judd, Ky., 400 S.W.2d 685 (1966). This principle of law was emphatically restated as recently as 1986 in Federal Kemper Ins. Co. v. Hornback, Ky., 711 S.W.2d 844 (1986).
Nothing has changed since 1986 to cause us now to overrule this long-standing principle of law except perhaps a change in the membership of the court. I firmly believe that an appellate court should adhere to long-established precedent unless there is some urgent or compelling reason to depart therefrom which destroys or completely overshadows the reason behind the precedent. A change of the law brought about only by reason of a change in the membership of the court reduces us to a government of men rather than a government of laws, and every judicial election could result in a reversal of long-established judicial precedent.
Citizens in a civilized society cannot lead orderly lives or make plans for the future unless there is some stability in the law.
This is not to say that circumstances cannot change to such an extent as to outmode previous decisions and mandate new ones. But circumstances have not changed here.
Furthermore, there is no need to overrule an established principle of law simply to permit a policyholder to maintain an action against his insurer for denying payment without justification or for attempting an unfair compromise through delay or by exploiting the policyholder’s economic circumstances. A policyholder treated unfairly by an insurance company in the settlement of his claim already has two separate avenues to recover damages by bringing suit pursuant to K.R.S. 304.12-230, the Unfair Claims Settlement Practice Act, and K.R.S. 367.220(1) and 367.170, the Consumer’s Protection Act. These statutes were held to afford relief to policyholders against their own insurance company for unfair settlement practices. State Farm Mutual Auto Insurance Co. v. Reeder, Ky. 763 S.W.2d 116 (1989); Stevens v. Motorists Mutual Insurance Co., Ky., 759 S.W.2d 819 (1988). Because the appellants here already had available to them a complete statutory remedy, there is no real need to upset long established precedent and convert a breach of contract into a tort just to allow relief which was already otherwise available.
Since a policyholder already has a full and complete statutory remedy against an insurance company which treats him unfairly, the real purpose and effect of the majority opinion is to establish a precedent for the conversion of a “breach of contract action” into a “tort action” with its attendant remedy of “punitive damages.”
If a breach of contract can be converted into a tort with a veritable Eldorado of punitive damages to be mined, it does not take much imagination to anticipate that in the future every contract breach will be alleged to have been breached in bad faith.
It is true that the General Assembly in 1988 enacted K.R.S. 411.184(4) which provides that: “In no case shall punitive damages be awarded for breach of contract.” However, a court which is capable of converting a breach of contract into a tort will have no difficulty in deciding that K.R.S. 411.184(4) does not apply to the tort so created. I regard the majority opinion as a judicial announcement that such a result can be anticipated.
This is the case where tortious breach of contract gets its foot in the door, so to speak, but will be the underpinning for future cases, where this new tort and its twin brother, the tort of outrageous conduct, also newly created by this court, will move in and crowd out still other long-established legal principles.
GANT, J., joins in this dissenting opinion.