Court Opinion

ID: 9641623
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:36:28.769526+00
Date Added: 2024-06-11T18:10:38.799196
License: Public Domain

VANCE, Justice,
concurring.
I concur with the majority opinion. We should not extend the scope of punitive damages to allow their recovery for breach of contract.
The purpose of compensatory damages is to make the claimant whole and to allow him to recover all of the actual damage he has sustained. In cases where punitive damages are allowed, they constitute a windfall to an already fully compensated claimant.
Punitive damages represent a sum over and above the amount a claimant is entitled to receive as compensation for a loss suffered by him. In theory, they are allowed as a punishment of a defendant for outrageous conduct or to deter such conduct in the future.
While the theory of punishing the grossest and most outrageous conduct so as to deter such conduct in the future has some intrinsic merit, the allowance of punitive damages has at least three severe faults. First, there is no adequate standard for the assessment of such damages; secondly, since punitive damages are allowed as a punishment to deter future conduct, they are in the nature of a fine and should redound to the benefit of the state treasury rather than constitute a windfall recovery to a claimant who has already recovered all of his actual loss by means of compensatory damages; and thirdly, and perhaps most important of all, punitive damages in most cases have little deterrent effect because Kentucky law allows insurance coverage to protect against punitive damages. Continental Insurance Companies v. Hancock, Ky., 507 S.W.2d 146 (1974). Thus, most often, it is not the wrongdoer who is punished; instead, the punishment is spread among a myriad of policyholders who must, in the long run, bear the cost.
In the past, Kentucky has allowed the recovery of punitive damages for tortious conduct, but not for breach of contract. If any change is called for in the law related to punitive damages, it should reflect some limitation rather than an enlargement of the scope of recovery.