Court Opinion

ID: 9448798
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:45:03.752996+00
Date Added: 2024-06-11T17:31:33.364315
License: Public Domain

GEWIN, Circuit Judge
(specially concurring).
With heavy emphasis on the limitations set forth in the scholarly opinion of my brothers of the majority, I concur in the result reached under the facts and in the circumstances of this particular case.
In my view, the term “punitive damages” is the wrong standard to use in making a sweeping declaration of public policy. The term is too loose, vague, indefinite and uncertain; and its meaning often varies from state to state, court to court, and jury to jury. It is a chameleon of the law — changing its hue to the color of the situation in which it may be used. The courts have used it loosely and have developed a number of synonyms which are themselves subject to the same criticism. Some of these synonyms are: vindictive, exemplary, punitory, and “smart money”. An apt illustration of the difficulty involved is contained in the very candid statement of the Louisiana Court of Appeal (1 Cir., 1959) in the case of Loeblich v. Garnier, 113 So.2d 95 (note 4 citing cases to the same effect omitted):
“The often found general statement that only compensatory and not punitive damages are awardable in Louisiana is in apparent conflict with the awards often made for damages for mental anguish and embarrassment caused by an illegal and deliberate violation of property rights or for such violation itself irrespective of any pecuniary damage caused thereby (which damages, according to the definition above cited, are regarded in other states as exemplary or punitive damages). The key to resolution of this conflict seems to be that in such circumstances such awards in Louisiana are regarded as compensatory for violations of a recognized property right, rather than punitory.”
The law of contracts is also involved. In Palmer v. Chamberlin, (5 Cir., 1951) 191 F.2d 532, 539, 27 A.L.R.2d 416, our Court had occasion to consider the rules which should govern a court when called upon to declare a contract void on the *444ground that it conflicts with public policy. Relying on the well respected authority of Bank of Augusta v. Earle, 13 Pet. 519, 597, 10 L.Ed. 274, the court quoted from the opinion in that case the announced principle “ * * * that men shall have the utmost liberty of contracting and that their agreements, when entered into fairly and voluntarily, shall be held sacred and enforced by the courts.”
The majority opinion expresses the very laudable hope that the philosophy therein announced will serve as an effective deterrent of the conduct involved. All of us are concerned with the high death toll and personal injuries occurring on the highways, but I am somewhat skeptical that the prohibition of insurance against liability for punitive damages will accomplish the results expected by the majority. There is no certain measuring stick to determine the effectiveness with which the law operates in a given field, but all the states have rather strict criminal laws relating to the operation of motor vehicles. If the criminal penalties provided by such statutes fail to deter the wrongdoers, I seriously doubt that closing the market to insurance coverage will do so. As a matter of fact, it is my judgment that the opposite result will follow.
Insurance companies have assumed an important role in educating the public of the dangers inherent in recklessness, willful misconduct, gross negligence, and even simple negligence in the operation of motor vehicles. If insurance companies are eliminated from the market in all punitive damage cases, their efforts may be less intense. Businessmen and others need protection. It is doubtful that affording such protection would encourage willful violation of the law or reduce our moral standards. The borderline between willful and wanton injury and injury as the result of simple negligence, is often a hairline distinction. The sufferer gains little solace from the doubtful and unpredictable uncertainty of judges and juries as they undertake to place the conduct of the wrongdoer in the categories of willful, intentional, wanton, gross, reckless, or other categories of negligence. Those companies who do not wish to sell such protection may withdraw their product from the market, but I daresay that the insurance companies themselves prefer to determine the risk involved and the premiums to be charged rather than to have the marketplace destroyed.
If we reduce liability to those cases which arise without serious fault on the part of the insured, we destroy the theory of indemnity and protection. As pointed out by Judge Cardozo (later Justice Cardozo), in the early case of Mes-sersmith v. American Fidelity Co., 232 N.Y. 161, 133 N.E. 432, cited in footnote 1 of the majority opinion:
“Liability of the owner, who is also the operator, can never be incurred without fault that is personal. Indeed, the statute has so covered the field that it can seldom, if ever, be incurred without fault that is also crime.” (Emphasis added.)
As pointed out by the distinguished Judge, the traffic laws of New York then, certainly to a greater extent now, were heavily charged “ * * * with the threat of penal consequences”. In the cited case, the defense was that liability was not based upon negligence but upon willfulness and that such conduct should not be covered by the policy.
It is also quite apparent that my brothers of the majority are looking at this question from one direction only — from the point of view of the nature of the wrong which caused the injury. What about the injured party? Implicit in the entire field of tort liability and insurance' law is the concept of furnishing some protection to those who are injured. Public policy is involved here to a greater extent. What will society do with the thousands who are injured daily and to some of whom punitive damages are awarded.
I cannot better state my view than to quote from the opinion in Margaret Ann Super Markets, Inc. v. Dent (Fla.1953) 64 So.2d 291, 292, which quoted a very *445early Florida case, Kress & Co. v. Powell, 132 Fla. 471, 180 So. 757:
“ ‘Compensatory damages are defined as such as arise from actual and indirect pecuniary loss, mental suffering, value of time, actual expenses, and bodily pain and suffering. Exemplary, vindictive or puni-tory damages are such as blend together the interests of society and of the aggrieved individual, and are not only a recompense to the sufferer but also a punishment to the offender and an example to the community.’ ” (Emphasis added.)
The more appropriate basis upon which to hold that public policy prohibits insurance against liability is the nature of the conduct of the wrongdoer — not the nature of the damages awarded. If the defendant acted willfully, intentionally, maliciously or fraudulently, coverage should be denied; because, in such circumstances, he should not be able to avoid punishment by shifting the penalty to an insurance carrier. I doubt that such protection is ever afforded by insurance, because the companies who are experienced in such matters and who write the contracts, expressly exclude such conduct from the protection afforded by the policy.
For those who may be interested in the subject, attention is called to the following citations: American Fidelity & Casualty Co. v. Werfel, (1935) 230 Ala. 552, 162 So. 103; Georgia Casualty Co. v. Alden Mills (1930) 156 Miss. 853, 127 So. 555, 73 A.L.R. 408; Ohio Casualty Ins. Co. v. Welfare Finance Co. (8 Cir., 1934) 75 F.2d 58; Western Casualty & Surety Co. v. Aponaug Manufacturing Co., (5 Cir., 1952) 197 F.2d 673; General Casualty Co. of America v. Woodby, (6 Cir., 1956) 238 F.2d 452; Jernigan v. Allstate Insurance Co., (5 Cir., 1959) 269 F.2d 353; Jernigan v. Allstate Insurance Co., (5 Cir., 1959) 272 F.2d 857; Appleman, Insurance Law & Practice, 1962 Ed., Vol. 7, § 4312, p. 129; 17 Tex.Jur.2d § 173-188; I. H. P. Corp. v. 210 Central Park South Corp., 16 A.D.2d 461, 228 N.Y.S.2d 883.