Lovell v. Nationwide Mutual Insurance , 108 N.C. App. 416 ( 1993 )

Judge WALKER

dissenting.

I respectfully dissent from that portion of the majority opinion, which upholds the jury’s award of $225,000 as punitive damages. Although I agree that the facts in this case are sufficient to support a finding of actionable, aggravating conduct, so that the trial court properly submitted the issue of punitive damages to the jury, “the amount assessed [as punitive damages] is not to be excessively disproportionate to the circumstances.” Carawan v. Tate, 53 N.C.App. 161, 165, 280 S.E.2d 528, 531 (1981), modified and aff’d, 304 N.C. 696, 286 S.E.2d 99 (1982). See Swinton v. Savoy Realty Co., 236 N.C. 723, 725, 73 S.E.2d 785, 787 (1953) (The jury’s award must be “within reasonable limits”). The jury’s discretion in awarding punitive damages must be exercised “within reasonable constraints” in order to satisfy due process. Pacific Mutual Life Insurance Company v. Haslip, 499 U.S. ---, 113 L.Ed.2d 1 (1991). Having reviewed the evidence in the instant case, I believe that the jury award was excessive under the circumstances and that a new trial was warranted and should have been granted pursuant to Rule 59.

It is unquestionable that this case strikes at the heart of one’s emotions. Allison Lovell was tragically killed on the way home from her high school prom. There was evidence that defendant pressured the Lovells for a meeting with the adjuster prior to Allison’s funeral, and that although the Lovells expected to address the damage to the car and the medical payments provision at this meeting, the adjuster instead immediately began discussing the liability coverage of the policy.

Aside from the discussion of liability, there was evidence that defendant’s adjuster assured the Lovells that the medical payments provision was a matter of contract independent from the liability coverage, and that once submitted, those bills would be paid within ten to fourteen days. However, when the timely submitted bills remained unpaid, the complaint was filed. Defendant’s answer admitted that plaintiff had submitted the requisite documentation and stated that “defendant is ready, willing, and able to pay . . . medical benefits of $2,000.00 which are available to her.” Additionally, the funeral bills for Rusty Lewis had been submitted to defendant on the same date, 21 July 1988, and were paid by defendant under the Lovells’ medical payments provision within two or three weeks.

Although I find such conduct to be objectionable, I cannot conclude that the amount assessed was not excessively disproportionate to the circumstances. I do not believe the evidence supports a finding of conduct so patently offensive or outrageous as to warrant punitive damages in the amount of $225,000 and can only conclude that this award was given “under the influence of passion” because of the emotional nature of the case. Additionally, I note that the complaint asserted a claim for punitive damages in the amount of $15,000. (Although this pleading violates G.S. 1A-1, Rule 8(a)(2), defendant did not challenge it and the issue is not before this Court on appeal.) The fact that the jury’s award exceeded the amount sought in the complaint is not reversible error as a matter of law. Shuford, N.C. Civ. Prac. & Proc. (3rd Ed.), Sec. 54-7. However, G.S. 1A-1, Rule 8 provides in part:

(a) A pleading which sets forth a claim for relief . . . shall contain

(2) A demand for judgment for the relief to which he deems himself entitled.

I infer from the pleading, therefore, that plaintiff considered $15,000 to be an appropriate sanction for defendant’s conduct, and it is further evidence that the jury’s $225,000 award was excessive under the circumstances.

The majority opinion cites Maintenance Equipment Co. v. Godley Builders, 107 N.C.App. 343, 420 S.E.2d 199 (1992), in which this Court upheld an award of $4,550 in compensatory damages and $175,000 in punitive damages. In that case, there was sufficient evidence from which the jury could find that defendants knew plaintiff was in possession of the subject property; that plaintiff requested defendant to discontinue the grading operations; that after the land was graded, defendants refused plaintiff’s request to “put it back like it was” and pay for damages; and that defendant Godley stated under the same circumstances he would again follow the same course of action. Such egregious conduct supported an assessment of $175,000 in punitive damages, as it was not “excessively disproportionate to the circumstances of contumely and indignity present in the case.” Id. at 354, 420 S.E.2d at 205, quoting Carawan v. Tate, supra.

On remand, it is my view that the conduct to be examined as the basis for plaintiff’s claim for punitive damages should be limited to defendant’s failure to promptly pay the medical payments claim pursuant to the terms of the contract, as opposed to defendant’s conduct arising out of attempts to settle the liability claim. In this regard, the amount of punitive damages awarded, if any, should bear a rational relationship to the defendant’s conduct concerning its failure to timely pay the medical payments coverage of $2,000.