*1 Aug. No. 30775. 1978.] [L.A. Administrator, etc., NEAL, Plaintiff and
WILLIAM Appellant, EXCHANGE, Defendant FARMERS INSURANCE Appellant. *7 Counsel Aitken, Andres, & M. Bradshaw & Sanford Wylie Gage, Cooper,
Gage and Sacks for Plaintiff A. Aitken and Leonard Appellant. Shore, Samuel Richard C. Camusi, L. Mallery
William Odgers, Stephen and Curiae on behalf Plaintiff William B. as Amici and Boone Appellant. Brand L. Irwin Waldman and & Cooper
Hagenbaugh Murphy, Defendant and Appellant. Horvitz, Poster,
Ellis J. Marc J. James J. and J. Hogan Duryea Timothy and as Amici Curiae on behalf Defendant Appellant.
Opinion deceased, Neal,
MANUEL, Mrs. now J. In Novemberof Frances “bad this for the filed action compensatory punitive damages seeking failure Insurance uninsured faith” of Farmers (Farmers) Exchange pay in accordance of automobile benefits to her with motorist policy Neal Mrs. terms which she was a named insured. insurance under the of the action and was amended died complaint during pendency estate, Neal, of her William administrator to substitute her husband returned an undifferentiated verdict trial Following plaintiff. $1,548,211.35. Farmers in the amount favor against plaintiff trial, the trial entered an order a new court Farmers moved for *8 was issue unless on the of motion damages only plaintiff granted $749,011.48, in verdict amount of to a reduction of the to the agreed to the denied. Plaintiff filed a consent which case motion was from entered Farmers reduction was accordingly. judgment appeals Plaintiff has a filed judgment. cross-appeal.1 13, 1970, Neal, On Mrs. in an while as a July riding passenger Neal, automobile owned her and her William husband by operated latter, was accident when their an intersection by gravely injured vehicle, turn, while in the of a left was struck broadside process making vehicle driven an uninsured motorist. She following spent in the her from total condition days hospital, gradually changing paralysis from the neck fractured neck vertebrae and a down to (due damaged and motor total serious cord) spinal sensory disability involving until her death from cancer defects. She remained in the latter condition instant 1974, or than a to the trial of the more early year prior slightly action. of in force a
At the time accident there was automobile policy a medical issued Farmers included automobile insurance $5,000 motorist with and an uninsured limits payment provision $15,000. Neal A few after the accident Mr. with limits of days provision friend, Paul who undertook contacted attorney, Gergen, family under communicate with Farmers in the early payment hope obtaining $5,000 later made Some three months policy. payment Farmers, however, to the declined medical pursuant payment coverage. $15,000 limit of under the uninsured motorist pay policy coverage, entitled, that it was under an threefold (1) ultimately position taking to offset amount under the medical express provision, policy paid amount under the due uninsured motorist payment against any coverage Mr. that the accident resulted from the coverage; solely negligence motorist; Neal, thus on the of the uninsured part precluding liability that on the of Mr. Neal be legally contributory negligence might part to Mrs. Neal. imputed
In Mr. wrote to Farmers urgently requesting January Gergen had In this he that the Neals’ son settlement. letter disclosed prompt and that cancer, had taken contracted heavy surgery place, major of this this were imminent. In view on account medical expenses if full under uninsured he payment requested development (See (1976) 54 American Ins. Miller National Co. is proper. 1The cross-appeal Life 731].) 341-345 Cal.App.3d
919 should Farmers then accept was to be not forthcoming, motorist coverage $10,000 be made immediately, of that his alternate payment proposal an decision future $5,000 offset for by the of the reserving question letter to this by later Farmers Four responded tribunal. days appropriate that Mr. Gergen from of its advising call one employees telephone It was not until of its the Farmers would seek attorney. legal opinion his later, that Farmers’ three months attorney almost reported April offset, of that (2) was on the matter the law unclear conclusions that (1) Mrs. Neal not be to the of Mr. could on imputed any negligence part Neal, “at was “50-50” on and that best” case (3) liability. then offered Farmers received foregoing attorney’s opinion,
Having $5,000. of Mr. to settle the case an additional Gergen rejected by payment 1, 1971, in a in which he set forth at this offer letter dated length May and on the the uninsured motorist2 evidence part indicating negligence him. When Farmers made offer of settlement by repeated previously wrote,, this time did this within 10 he not to letter respond days, again if full and that offers of settlement all stating withdrawing previous he office within 10 $15,000 received in his days were not payment I to be what consider would “institute arbitration requesting proceedings to $500,000.” did not Farmers in the sum realistic respond this letter. Aitken, Mr. one
The case was turned over Mr. thereupon by Gergen made in A demand for arbitration was attorneys. present due of the arbitrator but August unavailability agreed upon, A was was set until continuance not year. hearing April following at available date was Mr. Aitken’s next February granted request, and in 1973. The commenced on the latter date April proceedings his favor of Mrs. Neal the arbitrator rendered decision in same year in the police other the letter adverted to certain matters appearing 2Among things It was of the car driven the uninsured motorist. which bore report upon speed vehicles after out that marks on the scene and pointed position respective skid motorist, (1) car an the accident indicated that the driven the uninsured Oldsmobile sedan, 51 feet impact entered a 4-wheel locked slide prior impact; upon into vehicle, sedan, additional Neal was knocked 9 feet in a skid sideways a Dodge slide; feet in a 4-wheel the uninsured motorist’s vehicle travelled locked At the subsequent hearing additional feet forward arbitration following impact. in his these and other factors testified that consulting engineer opinion, given physical when the the uninsured motorist’s vehicle was some 57 miles hour present, per travelling brakes were first evidence at trial nontechnical witnesses applied. Opinion presented indicated a similar view based on experienced litigation) claims (attorneys casualty the same The occurred the noon hour at a commercial factors. accident during The intersection. limit 45 miles hour. per posted speed *10 on the issue of his decision on the of At offset. liability, reserving question $10,000, Mr. Aitken’s Farmers then and first six months request paid later, when the arbitrator his issued decision on the offset in question Neal, $5,000 favor of Mrs. final was paid. action,
The instant and for seeking compensatory punitive damages settlement, Farmers’ faith” “bad refusal to enter into a was filed prompt 8, on November 1973. At trial in plaintiff proved compensatory damages $3,588.50 amount of in costs and finance $9,573.65—comprising on a second deed of trust loan on the Neals’ residence and charges $5,985.15 in fees and other costs in the incurred arbitration legal It 31, 1974, was also shown that of December defendant proceeding.3 million, $765 Farmers had assets of some net assets of gross approximate- million, $211 and a 1974 net ly $45 income of million. As indicated nearly above, verdict, returned a with no differentiation between and in $1,528,211.35, amount compensatory punitive damages, which was to $749,011.48 reduced amount subsequently remittitur in to the of a conditional order response granting a new trial on the of excessive granting Civ. (Code ground damages. Proc., 662.5, subd. (b).) § Appeal
Farmers’ In v. 9 (1973) Aetna Ins. Co. Cal.3d 566 Gruenberg Cal.Rptr. [108 510 P.2d we made it that the insurer to clear of an 1032], duty accept claims insured reasonable settlements third its Crisci (see party against 425 Co. 426 P.2d Ins. Cal.2d 173]; Security [58 Comunale v. Traders & Ins. Co. Cal.2d 654 General P.2d law, 68 A.L.R.2d is but one of its 883]), aspect obligation, imposed by to act faith in its contractual good fairly discharging responsibili- out, ties to its Another of that insured. we is the pointed aspect obligation, of the insurer to act and in faith claims duty fairly good handling insured, we submitted its which as “a characterized not duty withhold due under a Cal.3d at (9 unreasonably payments policy.” Thus, held, we when an insurer 573.) “fails to deal and in p. fairly good cause, faith with without its insured its by refusing, proper compensate insured for loss covered such conduct rise to policy, may give cause of action tort for breach faith covenant implied good and fair at It is an breach of the latter 574.) asserted (Id., dealing.” p. 3The trial court ruled because died trial no Mrs. Neal had properly prior Code, 573.) (Prob. emotional distress were recoverable. § which the forms basis of this which litigation upon duty rests. challenged judgment there contention—that Farmers’ first can with
We deal briefly the aforesaid it had breached duty. evidence that no substantial herein, we have record the substantial it to Suffice say evidence, above, contains abundant outline in broad summarized only conduct of defendant’s it on the deal subject conflicting, good *11 did that Farmers was to the effect of that evidence While some motives. faith, and in assert its more here than reasonably good no position legal the to herein concluded the contrary. jury clearly the to of undeniable It the basis of evidence substantiality did so on its no later than at an Farmers knew effect that early date—certainly 1, it had no colorable 1971—that Mr. letter dated of May Gergen’s receipt its the of under uninsured defense to claim provisions motorist an was of the of that the issue that and availability only genuine policy the $5,000 it under medical offset the by payment provisions;4 paid $10,000, the for an Mr. offer to settle additional that Gergen’s reserving tribunal, was an for later decision offset wholly by question appropriate and faith have been reasonable and should in good promptly accepted; a refusal to the offer constituted breach that Farmers’ subsequent accept with insured of its to deal and in faith its good fairly obligation cause, to its insured for a loss without compensate “refusing, proper at The of an the function 574.)5 covered policy.” (Gruenberg, supra, p. the of attorney the date in Farmers had received its question indicating 4On report Neal not to Neal on the of Mr. could be Mrs. part imputed any contributory negligence Code, 5112) the issue vel was whether (see Civ. and therefore that on non only liability § of the That as indicated report, was on the uninsured motorist. part negligence present above, was it concluded that the case “50-50” on but this conclusion liability, predicated Lane, Linda was an in the vehicle on the truth of statement who given occupant and or not have been the driver thereof. The does report which struck the Neals may may evidence at the as related indicate that the scene was considered it to not physical vehicle, and not of the it further that the was advised appears attorney matter of speed of which had arisen as to the of the true driver and the serious questions identity Linda Lane. credibility 5, to dated was An in-house 1971—which “summary report” February report provided his was for consideration in indicated that it preparation the attorney opinion—had writer, claims was the insured driver supervisor, opinion “probably ‘B’ and the driver negligent negligent.” [uninsured motorist] 1, which was Mr. letter of written to the attorney’s opinion, May response Gergen’s consideration, it for his as above noted attorney was not forwarded to although to the matter motorist’s relevant uninsured negligence, contained information 2, ante) (see fn. evidence relating a review of the including physical speed which had arisen as to the of Linda Lane. credibility the serious doubts indication of faith,” (see also “bad used in context in Gruenberg faith” and this 5The terms “good 711, 452, (1977) 521 P.2d 11 461 Cal.Rptr. v. Cal.3d Ins. Co. [113 Silberg Life California 922 court the review of a evidence, of substantial
appellate upon question of our in that too are well “beginning ending” power respect, known here. reiteration Foreman (See & Clark v. Fallon require Corp. 875, 3 162, Cal.3d 881 (1971) 479 P.2d v. 362]; Primm Primm [92 46 Cal.2d 693 (1956) P.2d Estate Bristol 231]; Cal.2d [299 221, 223-224 P.2d 689]; v. Southern Co. [143 Crawford Pacific Cal.2d P.2d 183].) Farmers’ second contention—that there was no substantial evidence to an award of support without punitive damages—is similarly merit. “In order to an award of justify exemplary damages, defendant must be Code, fraud or malice. (Civ. guilty oppression, 3294.) He act vex, § must with the intent to or with or injure, annoy, conscious disregard plaintiff’s rights. (Silberg [Citations.]” Co., Ins. 11 Cal.3d As we have 462.) supra, California Life above, out there was substantial evidence before pointed *12 that defendant had breached its to deal finding support duty reasonably insured, and in faith with its Farmers to liable good rendering pay for all detriment caused that compensatory damages proximately Code, However, breach Civ. (see 3333). as we § emphasized Silberg Co., 452, 462-463, Ins. 11 Cal.3d at such a supra, pages California Life determination does not itself establish that defendant acted with the of intent that is to an award of For quality requisite punitive damages. we this must look the matter of reasonable to further—beyond response that of motive and intent. satisfied,
We are after an of examination the whole record ain light most favorable to the (see Bertero v. National General judgment Corp. 43, 13 184, (1974) 608, Cal.3d 65 529 P.2d 65 A.L.R.3d Cal.Rptr. [118 that an award of 878]), was here There was punitive damages proper. substantial evidence before the from which it have might reasonably 425, 13, 1103]; cf. Crisci v. Ins. 66 Cal.2d 426 Security Co. 429 P.2d [58 173]; Comunale v. Traders & General Ins. 50 Cal.2d Co. 659 P.2d 68 883]), not meant connote A.L.R.2d are to the absence or of misconduct positive presence which, below, of a malicious or immoral we shall are nature—considerations as indicate in the more concerned determination of for Here we properly liability punitive damages. with of deal of breach the covenant and the resultant only question implied liability Contracts, for As stated draftsmen of the Restatement of compensatory damages. contexts, a faith’ is used in phrase of and its varies ‘good variety meaning somewhat “[t]he in the context. Good faith or enforcement of contract performance emphasizes faithfulness to an common with agreed purpose consistency justified expectations of the other it excludes of party; variety of conduct types [from consideration] characterized other as ‘bad faith’ because violate involving they community [in contexts] of (Rest.2d (Tent. standards fairness or decency, reasonableness.” Contracts Draft Nos. 1-7) a.) § com. an with intent defendant Farmers here acted concluded that maliciously, its insured.6 That of and in conscious of rights disregard oppress, Mr. evidence, brief, refusal to indicated that Farmers’ Gergen’s accept the matter to its settlement, and of of its submission offer subsequent conduct, of a conscious course were all for part attorney opinion,7 to utilize in established designed company policy,8 firmly grounded Neal and her found in which Mrs. lamentable circumstances family it, as a from lever themselves, financial situation resulting exigent the facts would than more favorable to force settlement the-company record of evidence to The in the warranted. otherwise have presence to this for no moment court Clearly, can be of present purposes. contrary Farmers.9 record award against punitive supports certain Farmers next evidentiary rulings Defendant complains it erred when trial court it that the trial court. First urges made by “B” “A” and marked its exhibits into evidence refused admit defendant’s case file of was the entire The first of these identification. latter the entire case some pages, attorney, consisting It is Farmers, of some urged defendant file of consisting pages. materials, to the arbitration those proceeding, these relating especially however, trial faith. the issue bad It were relevant on appears, substantial documents court, these containing correctly assessing matter, ruled that and irrelevant any selfserving hearsay quantities *13 defendant, in the 6It is true the record no direct evidence that pursuing contains However, did, intent. as of that it acted with the indicated motivation and course conduct fact,” Bertero, mind, to “malice in may in the state of often referred as we said requisite the of hatred or ill direct evidence on existence be “either proved expressly (by probative inferences). will) draw evidence which the may or indirect from by implication (by jury 143, Hearst, 66.) The (13 record (Davis 530].)” 162 P. Cal.3d at p. Cal. supra, [116 evidence latter herein is with of the replete variety. 4, ante), in from the (see 7As there was evidence the record indicated above fn. Farmers, its could have the of seeking attorney, concluded jury properly opinion failed to him all of available to it. disclose to information pertinent of, 8Included in the record is a or an from defendant’s “Claims copy excerpt Manual,” Field which inter alia with the Representative provides representative advice: “It is for the to learn how to following claims sense important representative for This will not claimant is times settlement. whether or opportune apply represented as a or Such death in the a home by attorney. things marriage family, purchase or automobile will will claimant with financial situation which present ordinary his him the out of his claim. If the is such suggest advisability getting injury money that settlement be the claims should follow representative may tactfully approached, with In its the document through discussion.” concludes appropriate closing paragraph that “the of settlement in itself’—a statement which is psychology negotiations study review instant us our record leaves disinclined to dispute. 9Here no made award was claim is that the Farmers damages against punitive in the of respondeat doctrine improperly grounded superior. documents therein would be admitted
particular founda- upon proper tional but that the files in their would not be showing, admitted. entirety Defendant thereafter offered several evidence, items into some of specific which were and some of which were No accepted rejected. prejudicial error in the trial court’s refusal appears entire files into accept evidence, or in its on items therein which were later rulings specific offered to that pursuant ruling.
Defendant also contends that the trial court was guilty error when it two of witnesses, prejudicial permitted Attorneys Burton, and on Gergen Farmers’ give opinions experts subject This, bad faith or contends, lack of it. defendant was not a proper subject because it was not a matter expert opinion “sufficiently beyond common that the of an would assist the trier of experience opinion expert Code, fact.” subd. (Evid. The matter of the (a).) § admission evidence, however, is one within the sound discretion of the trial expert court. v. Cole 47 Cal.2d P.2d 56 A.L.R.2d (People We can conceive of 1435].) in which a many ways lay jury, the conduct and motives of an insurance assessing company denying who, under its could benefit from the of one coverage policy, opinion by was to evaluate such profession experience, peculiarly equipped matters in Moreover, the context of similar was disputes. instructed that it was not bound of such specifically opinions witnesses but should such to which give opinions weight they thought them entitled in view of the of the witnesses qualifications credibility and the reasons them in of their No abuse of given by support opinions. discretion here appears.
We are thus to what we conceive to be the most brought significant wit, contention raised Farmers in its that “the appeal—to judgment, court, excessive, even as modified the result of being passion The under this in our view prejudice.” arguments presented heading *14 are addressed to two different issues. The first is whether the conduct of irrelevant, counsel at trial had the effect of injecting prejudi- cial, and evidence and into the misleading argument proceedings, in a verdict tainted and The second is resulting by passion prejudice. verdict, reduced, whether the as is excessive as a matter of law. We address each of these contentions in order. in
It is first
that counsel was
of misconduct
urged
guilty
placing
means,
defendant
the “third
before the
various
what
refers to as
by
jury,
counsel,
In short it
means of
party argument.”
appears
by
questions
him,
to the
indicate
made
jury
and
asked
sought
argument
limits
its
not in the context of
should be
Farmers’ conduct
policy
gauged
Mrs.
the
suffered
“value” of
but
the context of
total
injuries
in the
accident, which was
to be
indicated
Neal
underlying
$500,000.
of
This
was
suggest
approach
apparently
neighborhood
Crisci,
we
and
wherein
ed
our
in Comunale
to counsel
supra,
opinions
fair
its
reasonable and
held that where an insurer in violation of
of
duty
a
its
refuses to settle within-limits claim of
third
against
dealing
person
insured,
it can be held liable for the full amount of any judgment
rendered
the insured without
limits.
against
subsequently
regard
policy
context,
we
in the
Such a
has no
instant
clearly
principle
application
As we
hasten to condemn counsel’s intimation before
that it does.
jury
above,
out
an
breach of its
faith
have
insurer’s
duty
good
pointed
renders it liable for
which are the
fair dealing
any damages
proximate
situation,
In
of which
that breach.
the so-called “third
result of
party”
have as
are
the breach of
Comunale and Crisci
duty may
representative,
limits
in excess of
its
result
judgment
policy
entry
proximate
us,
In a
such as that before
the insured.
situation
parties
against
situation,
to term a “first
hereto are
injuries
party”
pleased
breach,
be a
sustained
to the
cannot
alleged
being
plaintiff,
prior
breach,
therefore
serve as
result of that
cannot
proper
proximate
from the
measure of
resulting
damages. Only damages proximately
distress, for
as
economic loss or emotional
breach—such
consequent
recoverable as
therefor.
(See Gruenberg,
example—are
compensation
579-580;
Co.
at
Fletcher v. Western National
Ins.
supra,
pp.
Life
401-402
case for to Frances Neal the automobile bodily resulting any injuries *15 distress, if at It also instructed suffered her time.” was by any mental or emotional any, which, in natural and continuous sequence, that “a cause is a cause legal damage would have occurred.” without which not produces damage, damage Defendant also of certain misstatements of the complains alleged evidence the course of certain occurring during by “expert” testimony one of and of other misstatements attorneys plaintiff’s alleged occurring We have examined the record this during argument. fully respect find that in each asserted instance the or was either a testimony argument statement of the record or was cure proper subject prompt by objection for admonition. request
Defendant’s final contention the conduct of concerning plain tiff’s which, counsel relates to asserted defendant “appeals passion” had the effect of the entire It is that urges, tainting proceeding. urged counsel, means of reference to Neal’s Mrs. plaintiff’s unremitting accident, condition her death from grievous following subsequent cancer, and the similar fate of her son—and these by contrasting against the wealth of the to inflame the of the defendant—sought passions jury this, defendant. That counsel was successful in Farmers against eminently is evidenced the size of the verdict rendered. urges, counsel, Our review of the record indeed discloses that from statement to the last line of was opening closing argument, extremely in his efforts to before at diligent place jury every opportunity accident, details of Mrs. Neal’s condition the fact of sorry following cancer, her death and the from of her subsequent compounded tragedy son’s demise from the same disease. It also that took counsel appears to contrast this lamentable situation the admitted net worth pains against of Farmers and to was the inevitable result. suggest oppression excesses, Counsel’s zeal in this in some instances led him into respect which on more than one occasion earned him on the reproof part trial We have no doubt that similar with judge. warnings, along admonitions to the well have followed on other appropriate jury, might occasions if and a for admonition had been objection proper request clear, however, It is counsel. that the facts on lodged by opposing counsel based this tactic—at least in with other evidence on conjunction the matter of Farmers’ awareness of such facts—were relevant to clearly Thus, issues before the in the matter of jury punitive damages. Farmers, whether its insured to determining breaching duty settlement, make a reasonable did so in a spirit oppression, entitled to consider evidence of the situation of the at insured clearly the time of the settlement insofar as that situation was known to proffered the insurer and be considered to have motivated its actions. In view might conclude, of all of circumstances we cannot as defendant would these us, as reduced the trial from have the verdict court resulted *16 of counsel here com- induced the conduct and by passion prejudice of. plained even as contention that the verdict
We next consider Farmers’ remittitur, consent was reduced the trial by judge upon a matter of law. excessive as we think' it to the merits of this contention
Before necessary proceeding As noted to address ourselves to a matter of briefly practical significance. with and at the outset of this herein was opinion, supplied form, i.e., returned an undifferentiated verdict one providing single for insertion of amount without means for space any damages, the total amount into its compo- punitive compensatory segregating case wherein We can see no for this nents. justification practice of both are varieties and we herewith it. In damages sought, disapprove most cases use of such form would review make of questions excessive next to for both the trial court on a motion damages impossible however, for new trial and an court on we appellate appeal. Fortunately, Here, are able to avoid this in the instant case. because problem plaintiff statute from emotional precluded by recovering damages any suffered distress Mrs. Neal fn. and because all (see ante), parties the trial court were economic agreed consequent upon damages $10,000, more than it defendant’s breach of amounted to no alleged duty can verdict be concluded that the balance of the represented original the verdict as reduced same damages. procedure punitive Applying court, that the the trial we can conclude with reasonable certainty amount of awarded was in punitive damages neighborhood $740,000.11 then, It that we shall look in is to this determining figure, whether the award was excessive. punitive12 damage we General
As out Bertero National pointed Corp., supra, at the trial Cal.3d our review of awards rendered punitive damage level standard of is honored reversing “historically guided record, when viewed which the entire excessive those only judgments the result of indicates were rendered as most to the judgment, favorably the matter 12.) .” Cal.3d at fn. . . (13 Stating p. passion prejudice. the amount of concluding a reasonable basis for 11The record in fact provides $740,000, which is the reduced verdict was exactly included in the punitive difference between the and the amount ($749,011.48) reduced total verdict as and authorities in his memorandum points claimed by plaintiff consequential damages ($9,011.48). trial the motion for new opposition it awarded was excessive insofar as made that the award 12No claim is here compensatory damages. *17 928 case,
somewhat in a similar we indicated that an differently appellate ‘ court reverse award such an the as a award matter of may “only “[w]hen excessive, law or where the is so appears recovery grossly disproportion ate as to raise a it is the result of or presumption passion ’ ” 908, Auto Co. 11 Cal.3d (Schroeder v. 919 (1974) prejudice.” Driveaway 622, 523 P.2d 662].) Cal.Rptr. [114
In indicated assessment we are the making of are afforded certain established all principles, guidance by the One in and function of factor grounded punitive damages.13 purpose is the nature the in of the of defendant’s acts whole particular light record; different acts be of of clearly, may varying degrees reprehensibili act, and the more ty, reprehensible greater appropriate other all factors are Bertero v. National (See punishment, assuming equal. 43, 65; General 13 Cal.3d Fletcher v. Western National Corp., supra, Life Co., 408-409; 376, Ins. 10 Ferraro v. Fin. supra, Cal.App.3d Corp. Pacific 339, 8 352-353 (1970) Another relevant 226].) Cal.App.3d Cal.Rptr. [87 awarded; is amount of in yardstick compensatory damages general, even an act of considerable will seen to not be reprehensibility justify amount of if the actual harm proportionally high punitive damages suffered is cf. v. 35 (But small. Lockhart Cal.2d (1950) thereby Finney 161, 164 P.2d Also to wealth be considered is the 19].) [217 defendant; 13, the function of deterrence fn. (see particular obviously, will not be if the ante), served wealth of defendant allows him Bertero, 65; absorb the award or no with little discomfort. at (See supra, p. 926, Roemer Retail 44 v. Credit Co. 937 (1975) Cal.App.3d Cal.Rptr. [119 266, Wetherbee v. United Ins. Co. America 18 82]; (1971) Cal.App.3d of 8 270-271 Ferraro v. Fin. 678]; Corp., Cal.Rptr. supra, [95 Pacific 353; 282, v. 275 MacDonald Joslyn Cal.App.2d Cal.App.3d token, same 293-294 A.L.R.3d 641].) By [79 which, course, the function of is not served award punitive damages act, in wealth defendant’s and the light gravity particular exceeds the level and deter. necessary properly punish us, considerations to the case before we
Applying foregoing cannot conclude that the here award was excessive as a matter question of law. at the as we in a record must most favorable to the Looking light it that the and the court (Bertero, could judgment appears supra), have that the concluded conduct of Farmers this case was properly is deter the thereby 13The punitive damages punish wrongdoers purpose 389]; (Evans 220 Cal. P.2d commission of acts. Gibson wrongful Co., 376, 409.) Fletcher v. National Ins. 10 Cal.App.3d Western supra, Life a calculated on the involving attempt part highly reprehensible, Mrs. Neal insurer to take series of advantage tragedies afflicting to effect a settlement at a and her order bargain price family the amount retain due to the insured. monies Although thereby rightfully *18 to a recoverable was limited relatively damages legally compensatory occurrence of the fortuitous amount more than $10,000) modest (no that we think it death to trial fn. (see ante), Mrs. Neal’s likely prior recovered a substantial would have absent this limitation plaintiff distress suffered amount for emotional additional compensation In these of the insurer’s breach of Mrs. Neal as a duty. consequence between we cannot allow the circumstances apparent disproportion award as reduced to and the total recoverable compensatory damages Lockhart, award. lead us to (See nullify compare Finney supra, 161; 35 v. O'Gara 227 207 Cal.2d (1964) Kluge Cal.App.2d Cal.Rptr. [38 Inc. v. Benatar 99 400-402 607]; Sterling Drug, Cal.App.2d P.2d we that the amount of note 965].) Finally, punitive damages [221 the reduced (i.e., $740,000) represented by judgment approximately less than one-tenth of 1 of defendant’s assets represents gross percent than less a week’s worth of its net income to 1974 weAs according figures. “ Bertero, said in are awarded defendant ‘for punitive damages against Code, the sake of him It (Civ. 3294.) § example by way punishing’ defendant, follows that the wealthier the the award wrongdoing larger need be in order to exemplary damages statutory accomplish at We determine on the (Bertero, 65.) objective. supra, p. [Citations.]” here, America, record before us as in Wetherbee v. United Ins. Co. of 266, 271, and the trial court “could supra, Cal.App.3d jury conclude that an award to one week’s reasonably earnings equal to effect the of defendant and to serve as necessary required punishment for other v. Downtown L. A. Motors insurers.” Zhadan (Cf. example 66 Cal.3d We decline 499-501 therefore 132].) award, reduced the trial with to hold that court consent jury’s was excessive as a matter of law.14 plaintiff, notion, 14We to our with the take this opportunity express disagreement suggested Farmers, the briefs amicus curiae filed in of defendant that substantial awards of support insurers are to be because such awards will be punitive damages against discouraged to consumers in the form of It is on” future true that an “passed higher premiums. quite which insurer has been substantial award of decide subjected punitive damages may mean, to raise future in order to offset that award. This does not premiums necessarily however, insurance which have sustained competing not such an award companies fact, will follow suit. In American of free principles upon system enterprise is based would to the that other would suggest contrary—i.e., companies proceed If the ultimate result is cause the capitalize upon resulting competitive advantage. to lose business to those have offending whose not been such as to company practices awards, them to substantial it would seem that the of deterrence subject punitive object will be well in an ultimate benefit to insurance consumers as a whole. served—resulting Cross-appeal Plaintiff’s Plaintiff raises two court, contentions. The first is that the trial in its order a new trial on the issue of did not conditionally granting damages, with the of section the Code of Civil comply requirements Procedure to the of reasons. The second is that even relating specification if there was such order was erroneous because it lacked compliance, substantial in the record. It is therefore that the verdict of support urged be must reinstated. *19 in the
We set the full text of the order forth challenged margin.15 At first we are the outset of our consideration of contention plaintiff’s defendant, with the raised whether the of met by question, requirements are all order as It at to an such that before us. is section applicable the conditional nature of the order renders the of a that argued granting remittitur, trial new the failure consent to upon contingent and that the of such consent the order becomes upon entry exchange, 15“Neal vs farmers insurance et al. “Motion of for defendant the verdict heretofore judgment notwithstanding having been denied and the of matter motion of defendant for trial new been having heretofore 12, 1975, under taken submission on June the Court now rules as follows: The motion for a trial new is as to the issue of on the the granted damages only ground that are damages excessive, to the condition said motion is denied if subject within ten after days entry of this order a consents plaintiff filed with the court by writing to a reduction $749,011.48. verdict to the sum of The Court is convinced from the record entire and from the evidence that the weighing should have reached a jury different verdict. The Court’s reasons for the motion on the conditionally granting stated are the ground following: “1. The amount of the verdict to be the appears result on the of the passion part jury- “2. Counsel stoked such plaintiff passion by references to ‘Mrs. repeated Neal lying bed,’ in her paralyzed stating argument (Frances ‘Frances is on by down us’ looking Neal being Frances the decedent and whose injured rise to the claim person injuries gave under uninsured motorist medical coverage provisions policy) by witness, a a if asking sales of defendant he sold agent Relief and ‘Declaratory Arbitration.’ i.e., “3. The recoverable on the issue special before breach of the jury, $10,000. faith and fair were duty good less than dealing “4. The fact that there were two deaths in Neal a from cancer within short family of time would to arouse tend in minds of period sympathy jurors. “5. The amount of the verdict exceeds the amount to act a deterrent to the necessary defendant and others. “6. The amount of the verdict exceeds the amount in a manner necessary punish consistent with the offense.” unconditional denial of the motion for new trial.16 An order a denying trial, out, motion for a new it is is not to the pointed subject specification 657. section requirements
We find that defendant’s while is argument, ingenious, unpersuasive. An order a new trial is no less of an order conditionally granting' granting a new trial than an unconditional order of the same The fact nature. defendant, to reduce to add (or plaintiff, by consenting by consenting Proc., 662.5, to—see Code Civ. subd. the verdict (a)), rendered § the condition that order into may provide requisite transforming an order of denial does not alter this. the reasons Clearly, underlying careful deliberation requirement specification—i.e., “encourage[ing] the trial court before on new trial motion and ruling [making] record to review” sufficiently precise permit meaningful appellate Parke, Davis & Co. (Stevens 9 Cal.3d
We believe that the order stated reasons subject underlying it with sufficient to of section 657 and specificity satisfy requirements the cases it. As we said in the seminal case of Mercer interpreting 104, v. Perez 315, 68 Cal.2d at 115 436 P.2d page Cal.Rptr. [65 the statute “should 315], be a reasonable and construction. given practical To courts, avoid our burdened trial it will overtaxing already [Citation.] be sufficient if the who a new trial furnishes a concise but judge grants clear statement reasons he finds one or more of the why grounds 16The order is in the form. questioned Section 662.5 of the Code of proper statutory Civil Procedure in relevant provides part: “In civil where action after trial an order a new any trial limited to the jury granting issue of would be the trial court damages proper, its discretion:. . . may “(b) If for a new trial ground is excessive make its order granting damages, new trial to the condition that the for a new trial if granting subject motion is denied in whose favor the verdict has been rendered consents to a reduction of so much party thereof as the court in its determines the evidence to be independent judgment from fair added.) (Italics reasonable.” 17We note that two decisions of the Court of have reached the same result Appeal Co., 331, (Miller v. National American Ins. implication. 345-346; supra, Cal.App.3d Life Pease v. Beech 470-471 Corp. Cal.App.3d Aircraft 416].) fast can to the case before him. No hard and rule
the motion applicable and it will laid down as to the content of such be specification, the facts and circumstances of each case.” to vary according necessarily Here the was that of excessive ground ruling damages. we have indicated that when a trial motion new is Although granted on this the order should “indicate the in which the ground respects Parke, Co., evidence dictated less sizeable verdict” Davis & (Stevens 9 Cal.3d we think that 62), somewhat different considerations supra, when, here, it as is amount of awarded which apply punitive damages is the concern. In such a case we think that the is primary specification when, here, it makes reference to those of the trial adequate aspects which, view, in the trial led the to court’s improperly jury proceedings three in which in inflate its award. Here the court instances its pointed conduct in a view counsel bounds proper overstepped defendant. It also indicated manner to inflame the against tending circumstances of the case whose before certain factual presentation in favor tended to foster relevant and sympathy jury, although proper, three to which we it made reference to the Finally, guidelines plaintiff. of a claim of for the assessment of have referred above light amount (i.e., excessive damages, punitive compensatory proportion conduct, and indicated its effect) reprehensibility punitive evidence conclusion, assessment of the (see based independent upon under each of these tests. fn. that the verdict was excessive ante), made in we believe that a fuller statement have been this Although might latter the factual basis for these conclusions greater respect, indicating detail, we hold that the court’s statement of reasons was adequate of section 657. satisfy requirements *21 order,
We
whether the
even if
challenged
proceed
question
reasons,
was nonetheless erroneous
by proper specification
supported
In
it lacked substantial
record.
because
addressing
support
basic
The first is that
this
we are
certain
by
principles.
question
guided
the issue of excessive
when a trial
a new trial on
court
damages,
grants
reduction, the
a demand for
or not such order is conditioned
whether
by
on
to the
accorded
of correctness
jury’s
appeal
normally
presumption
Thus, as we
in favor of the order.
verdict is
presumption
replaced
It is clear that no abuse of discretion has here occurred. some Although of the reasons stated the trial court in of its action be support might held insufficient to reduction in the amount of a verdict as a matter justify of law court—we have reference here to the appellate particular court’s reliance on the between disparity proved compensatoiy damagés and the size of the undifferentiated verdict—at least one of its reasons the court’s assessment depends upon independent reprehensibility ante, defendant’s conduct in the circumstances. fn. (See No. As we 6.) have indicated the evidence on this specification bearing was in substantial conflict. That conflict for the trial court to question resolve on the motion for new trial.18
The is affirmed. The shall bear their judgment own parties costs on appeal.
Bird, J., Tobriner, J., Mosk, J., C. Newman, J., concurred. RICHARDSON, J. dissent, I somewhat on the respectfully amplify factual recitation of the On Neal, William majority. while July automobile in which his wife Frances was driving family made riding, *22 a left turn at an intersection in front of an car driven an oncoming by 18Section 657 of the Code of Civil Procedure that an order a new trial provides granting on of excessive ground “shall be reversed on such if there is no ground only substantial basis in the [i.e., record for such reasons the reasons stated the court in any by its order or The specification].” same rule is when the court applicable grants Co., conditional (See order under section 662.5. Miller v. National American Ins. Life 331, 346.) supra, Cal.App.3d sustained car. Mrs. Neal then struck the Neal
uninsured motorist serious injuries. personal Farmers insured defendant Neal was
At the accident by the time of a medical which contained under Insurance (Farmers) policy Exchange $5,000, and uninsured motorist coverage with limits payment provision C $15,000 The UM (the “Coverage provided part: coverage). policy entitled ... is the insured as to whether legally determination ... (1) thereof, shall be so the amount entitled) such and (if recover damages, and the or such made between insured agreement representative by . .” The or, event arbitration: . in the disagreement Company what as “a standard offset” also contained is described provision policy Part II: ... loss (C) which stated: “Limits of Under Any Liability Part II motorist under the terms of this payable any person [uninsured to be be reduced . . . the amounts or due shall paid paid provision] medical insurance under valid and collectible automobile expense any A was available to the insured.” similar offset statutory provision 11580.2, of Insurance Code section contained in the following language the terms of the then in effect: loss under subdivision (h) “Any payable be on to or for endorsement uninsured motorist any person may coverage be under valid or due to reduced: ... the amounts any paid paid available to automobile medical insurance and collectible payment 31, 1970, remain in effect until December insured. shall This paragraph was The UM no force after that date.” and shall have coverage mandatory. that if Neal were so severe
It to Mrs. was injuries undisputed under the uninsured motorist benefits entitled to receive she was any $15,000 the maximum she would be entitled to terms policy The record above described. to the offset provisions subject coverage, however, as whether there reflect, a serious before us does question A of the uninsured motorist. on the police investiga- any negligence part accident, after the which included initiated tion police immediately citation resulted in issuance of traffic interviews with eyewitnesses, of an Neal left turn into to Mr. for oncoming making illegal path It fundamen- No was issued to the uninsured motorist. is vehicle. citation tal, course, if no on the of the uninsured there was part negligence motorist, under the Neal would not be entitled to Mrs. general payment how UM no matter severe her injuries. coverage claim on the uninsured motorist as to defendant’s liability dispute Any course, medical not, affect its did payments obligation *23 October after Mrs. Neal’s Mr. filed the shortly attorney, Gergen, forms, of claim Farmers Mrs. Neal the full amount requisite proof paid $5,000 medical under the payment exposure policy. The matter however, uninsured motorist remained payment, Farmers, unresolved. that under both terms believing statutory policy it have offset, defenses on as well as on the might liability sought advice of 11, 1971, counsel. A substantial ensued. On its legal delay April counsel advised defendant that in the event of arbitration or trial there was a substantial likelihood that the uninsured motorist would not be found and characterized the case as “50-50.” negligent, Examining offset counsel also concluded that while the was not clear problem point because of a law, recent in which had not been clarified change by any defendant should be entitled to an offset. The appellate opinion, defense advised Farmers to arbitrate its and to attorney liability litigate through relief action the offset issue. declaratory of this defendant,
Immediately because following it receipt opinion believed its maximum uninsured $10,000 motorist (the exposure $15,000 $5,000 UM less the medical coverage offset) its payment chances of “50-50,” $5,000 suit offered successfully defending additional in full settlement of the claim. payment This was rejected Farmers, turn, in declined a counteroffer from counsel it plaintiff’s $10,000 and that the matter of the offset pay become the immediately of a relief action. 11, 1971, subject on declaratory Subsequently, May counsel revoked $15,000 his offer and demanded previous within 10 which he advised Farmers that the Neals would days, failing seek $500,000.” “realistic in the sum of Defendant did not In the arbitration Mrs. Neal was awarded the respond. full subsequent $15,000 after the arbitrator concluded that defendant was not entitled to offset. Farmers $15,000 Mrs. Neal the as ordered. any promptly paid Thereafter, Neal filed the defen Mrs. action present contending dant was of bad faith in a 50 settlement and guilty offering only percent her the full uninsured motorist benefits before arbitration failing pay occurred. The concluded that there was bad faith defendant to Mrs. Neal the full limit claim. on The refusing pay policy disputed concedes that the evidence of this conclusion was majority support thin but insists that it was sufficient measured very applicable standards. Clark & Fallon Cal.3d (Foreman appellate Corp. 479 P.2d In 362].) my opinion question bad faith is close. There was no that defendant’s very showing employees *24 the the Neals to unethical treatment or that
or subjected representatives from crisis that the Neal deaths (the family engulfed subsequent tragic and her adult was even son) cancer of Mrs. Neal both subject the an from in The stress consideration any excerpt regard. majority to sensitive “to be manual which encourages employees company Even, settlement that influence individual situations” might prospects. as however, if the manual is high-pressure encouraging interpreted contents between the tactics, no connection whatever the record discloses who the defendant’s manual and the conduct of representative well have The and their with the Neals may attorney. jury negotiated from the manual distaste the with complete excerpts regarded attuned would be that its reflected defendant’s employees hopes that influence settlement individual circumstances might prospects. Nonetheless, no evidence of the was furnished any improper jury have which the manual suggested. any may implementation procedure own relevant the Neal its At all times family represented counsel. independent is that the evidence sufficient to
Deciding uphold jury’s finding faith, the it cannot conclude as a matter of law bad states that majority award was the evidence that punitive damage unsupported by I must should be overturned. respectfully disagree. trial verdict
The court made jury’s finding express $1,548,211.35 and reduced resulted from passion prejudice, $749,011.48. judgment for on defendant’s motion
Because the trial court’s reasoning ruling “The thereof: is I new trial incorporate pertinent portions significant, on the to the for new trial issue motion is damages only granted excessive, . from . . The Court is convinced that the are damages ground the evidence that should and from the entire record jury weighing for conditional- verdict. The Courts reasons reached a different have [jz'c] The I. stated are the motion on following: ground ly [If] granting on the verdict be result of amount of the passion part appears [If] stoked such 2. Counsel by repeated plaintiff passion jury. bed,’ her ‘Mrs. Neal reference to by stating lying paralyzed . [If] is down on us’ ... 3. The ‘Frances looking special argument were before the . . . less than recoverable on issue $10,000.00. 4. The were two deaths in the Neal fact there family [Tf] arouse of time would tend to from cancer within short sympathy period verdict exceeds the The amount of the in the minds of 5. jurors. [1f] *25 amount to act a deterrent the and 6. as to defendant others. necessary [If] of in a The amount the verdict exceeds the amount to necessary punish manner offense.” I with this of consistent with the analysis entirely agree the trial court. there is no fixed ratio which to determine the of
Although propriety award, there is law the to effect that punitive damage punitive damages should bear a reasonable to the relationship compensatory damages award. v. 25 656, (Forte (1972) 689 455]; Cal.App.3d [102 Cal.Rptr. Nolfi 337, Wilkinson v. 93 344-345 P. (1928) At the 705].) Singh Cal.App. [269 least the amount of the of and compensatory way damages, by general is one element to be considered in the special damages, surely measuring of reasonableness the assessed of Accord- by way punishment. to the evidence the not could have exceeded ing compensatory damages $10,000. The ultimate award was almost of a punitive three-quarters I million dollars. am convinced that a award of size that punitive damage is not conduct of defendant is justified that disclosed in this by any record. “
We have said ‘In excessive, whether the considering [award was] we realize the extent, familiar rule that the to a is very jury, very large committed the for an responsibility awarding compensation injury the sustained. When award as a excessive, matter of law where or appears the is so as to raise a that it recovery grossly disproportionate presumption is the result of or the is then passion prejudice, duty imposed upon ” court to act.’ v. 1 Cal.3d reviewing (1969) (Cunningham Simpson 308-309 461 P.2d 39], J. C. citing [81 Rosenberg Penney Co. (1939) P.2d 696].) Cal.App.2d faith,”
The evidence “bad then was What my opinion, marginal. led the to return an award such I have concluded jury magnitude? was the verdict result several extraneous and irrelevant factors (1)
combination: and of the as found by passion prejudice jury court, trial to the that defendant’s suggestions improper jury conduct should be measured not maximum its contractual liability $20,000 but, rather, “$500,000 and true value” of possible up tort claim a third natural against party, jury’s Mrs. Neal’s and her death sympathy generated by injuries, subsequent which, that of her son from cancer. These causes resulted in an award in terms of both for breach of the uninsured motorist compensation was excessive. provision punitive damages, grossly issues case
Mrs. Neal’s were relevant to insofar any only injuries that the value of her claim or exceeded the established they equalled $15,000 limit the uninsured motorist of her As policy. coverage noted, this, never contested but conceded that if defendant previously she would recover the amount of Mrs. Neal entitled recover full Nonetheless, total lack of relevancy, plaintiff’s despite any policy. Mrs. sustained in counsel described Neal’s injuries repeatedly error, and was serious. accident. This was it *26 trial this irrelevant and The of this intrusion into the of degree on one manifest from the record. For factor is example,. improper when a defense defense on occasion ruling objection during argument stated; 14, if counsel, be we’re “And that would number court was before the condition of that times lady paraded jury. counting as we But it to me not ten. seems number though maybe only Maybe where exercise its discretion now the Court to have come to ought point recited it Code and have under say, you enough, [Evidence section] of this a further recitation of the conditions and that cannot you justify A this as reasons for second unfortunate from witness his opinion. lady defense that I see there is no reason is because dispute by far exceeded the of the insurance valuation the claim coverage policy.” concern, however, this and of the court’s clear proper expression Despite to be made still another time. it argument permitted In with his successful evoke conjunction attempt sympathies Mrs. and reference to Neal’s condition the additional tragedy death, the Neals’ cancer and matters son’s unrelated wholly any issue before the counsel introduced pursued properly jury, plaintiff’s an erroneous which was on the mistaken notion legal theory premised “$500,000” defendant somehow liable for full claim was plaintiff’s her personal injuries. “$500,000”
The the erroneous produced legal theory figure counsel, then between the Neals’ it in the negotiations appeared early demanded When on and defendant. May Gergen Gergen, threatened, not $15,000 he if within payment days payment in a “realistic to arbitration and claim for damages forthcoming, put go discloses, it was a $500,000.” record the sum of So far as the figure first she thin air. In amended snatched from complaint plaintiff’s wholly claim, “. . The full that Frances . c. seeking repeated Neal reference to said entitled to recover’ without would have been ‘legally $15,000.00, limit of for the said sustained in policy injury Neal Frances $500,000 the sum of . .” . .
The erroneous the extent of defendant’s unin- argument measuring sured motorist the nature of the rather than with exposure injury claim, reference to as augmented by policy, punitive damage the trial itself. Plaintiff’s new counsel introduced the pervaded figure $500,000 in his statement wherein he third as opening quoted persons $500,000” that “cases of this had a reasonable value of stating type case, “it’s obvious that here is that cases this kind are half a million evaluation,” dollar-million dollar and he then characterized to the jury the condition of Mrs. Neal “an as in the five hundred thousand or injury above range.” trial counsel two witnesses
During who testified produced *27 Mr. experts that Mrs. (including Gergen, plaintiff’s original attorney) Neal’s claim the $500,000. uninsured was motorist worth against Counsel stressed to the these continually witnesses that through defendant’s jury conduct should be not on the basis of its maximum judged exposure under $20,000, the but rather on $500,000 of basis value policy, Mrs. Neal’s claim the third uninsured against motorist. party $10,000
The defendant’s settlement offer was characterized repeatedly aas “token” offer which should in some manner be measured against “$500,000” conceived This basis for figure by plaintiff. measuring conduct, defendant’s unreasonable, as reasonable or inor faith” or “good faith,” “bad was to the trial, over presented jury throughout defendant’s in some instances. objections
In his summation to the counsel jury, “Are argued: they to the that living up owe to duty, their fiduciary duty insured when they use the they to force them and leverage then the legal processes is, however, alternative to that if will know, you drop you everything, $5,000. then he will Five dollars, thousand $500,000 claim pay worth and value, that’s we up, percent—1 what will offer percent you . . . .” Plaintiff’s counsel thereafter “In a case where the shortly argued that the $500,000 evaluation is in the parties agree neighborhood there are verdicts that kind of up, certainly well involving injury that, malice, above a measure of conduct, measure of wrongful way at how their conduct was ... look at what was the looking wrongful value of the claim and how did treat it.” they to arouse and
The counsel play upon jury’s attempt by plaintiff’s his final was natural sympathy compassion expressed feelings I that Frances Neal is “And somehow have the words to the feeling jury: I we down on us because she left this unfinished business. hope smiling can finish it for her.” in a
Plaintiff’s counsel his erroneous incorporate theory attempted instruction, and to a He successful. jury degree requested “In instruction: whether the insurer acted following good determining faith in to settle Frances Neal’s claim for may refusing bodily injury, you take into consideration the reasonable value of her claim personal injury determined to be without to the This is limits.” regard policy as written was but it was read to instruction quite properly rejected “In with the modifications: determining following jury questionable Frances the insurer acted in faith in settle whether good refusing claim, take into consideration Neal’s uninsured motorist you may There can be little doubt reasonable value of her claim.” personal injury with it could that the instruction left the jury impression properly “$500,000” her value which her counsel on consider the personal placed had This the third uninsured motorist. claim party figure against injuiy that it did in and there is little doubt been urged upon repeatedly it was instruction fact consider this regardless any figure themselves. award not to bodily injuries specifically *28 This in a limited correct instruction was very modified only legally value, the third claim I the if of the As sense. have against any, suggested, whether that motorist was uninsured determining only significant party for uninsured motorist exceeded the limit to or value policy equal reasonable- was informed that the extent that the To the coverage. determined conduct should be of defendant’s ness or unreasonableness the “$500,000” claim a value of reference to against by counsel, made motorist, this instruction and the uninsured argument erroneous. were clearly repeatedly, his from “third counsel derived
Plaintiff’s party” theory undoubtedly refused to settle carrier has in which an insurance cases unreasonably In such the insured. claim of third against person within-policy-limits for the full amount is held liable any cases the carrier judgment insured, to the insured is because rendered damage against the third of the insured’s full amount party’s judgment. exposure
941 (Johansen State Auto. Assn. Inter-Ins. Bureau 15 (1975) California 9, 288, Cal.3d 538 P.2d Comunale v. Traders & 744]; Cal.Rptr. [123 General Ins. Co. 50 Cal.2d P.2d A.L.R.2d [328 The carrier’s breach of its to the 883].) covenant insured of implied good faith and fair has the insured full amount of this dealing exposed The insured’s loss is measurable and flows judgment. directly by, directly from, the carrier’s breach. case, is however,
This not the in which a carrier declines pay insured’s claim a third case, motorist. In this the insured’s against party claim the carrier not is measured in against insured’s way any by claim Rather, uninsured motorist. we have against said that insured’s recoverable for breaches of covenants of faith damages good and fair loss, include the economic emotional dealing distress generally other caused to the any insured consequential damage unreasonable “bad faith” refusal to settle. v. Aetna Ins. Co. (Gruenberg 9 Cal.3d 579-580 480, 510 P.2d If 1032].) this were test, not the insurance carriers would find themselves between the immediate on a claim about Scylla had making payment they founded as to or the reasonably questions liability Charybdis suffering for failure to that, make punitive as in quick payment, damages case, the instant far exceed limits. This would not be a any policy just rule, as Kaufman, noted Justice quite properly speaking unanimous Court herein. If the uninsured motorist carrier has Appeal acted awards, are unreasonably, including damages, punitive entirely but measured, are not fairness, or value proper they logic the insured’s claim the uninsured motorist. against all reasons,
For
I conclude that
the award of
foregoing
$749,011.48
Furthermore,
should not stand.
the fundamental nature of
here,
advanced,
the errors involved
improper
legal
theory
*29
doubtful instruction
to the
references
given
jury,
repeated improper
“$500,000,”
to the
combined with the extreme and
figure
repeated
to
lead me
to the
appeals
sympathies
jury,
inexorably
conclusion that
not the errors
had
occurred and
trial
at so
permeated
levels not
would there not have
been
award
many
only
punitive
involved,
of the
here
but
there
exists
great magnitude
reasonable
that there
have been
of bad
no
faith
probability
may
finding
I
whatever. It is on these
would
that
reverse.
v.
(Henderson
grounds
,
1, 527
CLARK, J. I concurin the dissenting opinion comments. add following as an alternative instituted arbitration
The California Legislature over cases in uninsured motorist disputes by requiring litigation that, arbitration. or and value be settled by agreement, failing liability also, Code, 11580.2, v. Blair subd. see (f); Holdings Corp. (Ins. § Crofoot v. Merrill P.2d Ware 156]; 183-184 119 [260 Cal.App.2d Smith, Pierce, & Inc. (1972) Fenner Cal.App.3d Lynch, fault, creditable evidence On 791].) conflicting sharply limit.1 the total offered but the claimant demanded Farmers policy part not The first insurer majority’s holding, may “guess party abolishes the scheme for present statutory handling wrong,” effectively arbitration, We uninsured motorist claims. may anticipate pursuant 11580.2, no resolve these Code section will be used to Insurance longer because the in arbitration will be an automatic penalty losing disputes of the second in court for “bad faith” breach proceeding superior Thus, all claims must be insurance necessarily paid regardless policy. it bear the burden? how frivolous. And who is that will ultimately increases is the massive it motoring through Obviously, general public car insurance.2 cannot afford Today, public premium. percent Tomorrow, under the strict majority’s liability holding, percentage motorists, more more thus uninsured must increase creating consequently fewer run its even claims. When this has course uninsured motorist cycle who can afford insurance. motorists will exist had in mind this was not the purpose Legislature Clearly, to be handled its form of If these claims are creating statutory coverage. basis, so, fault” then the but “no on a “no fault” should say Legislature of insurance not be instituted this court should punishment who have acted Legislature’s compre- merely pursuant companies hensive program. for a was denied September rehearing
Appellant’s petition 7, 1978, was modified to read and on printed the.judgment September J., Richardson, that the Clark, J., were of the above. opinion petition should be granted. of Justice Richardson my in the set out opinion matters evidentiary 1I refer to *30 liability me question the record persuades examination of
independent of negotiations. doubt at all stages in serious motorist was the uninsured 2 II, 1976) (5 Los 1. Times Angeles April part page