*1 heretofore issued. It is further ordered that the Clerk furnish attorney to the copy judgment defendant and to his of the pursuant opinion. commitment as revised to this sively The record to the selection of the on appeal includes 68 jury to which no pages devoted exclu assignment appellant error discussed brief of the The in relates. appeal clusion of this material record an on caused utterly expense required useless which the State should not be indigent this bear on behalf of defendant. Pursuant to Rule 9(b)(5) 693, Appellate Procedure, of the Rules mimeographing pages cost of these 68 of the record attorney hereby against appeal on for the defendant. taxed No error in the verdict.
Death sentence vacated. doing NEWTON, CHARLES A. as NEWTON’S HOME FUR business NISHINGS v. THE STANDARD FIRE INSURANCE COMPANY
No. 123 (Filed 1976) 4 November Appeal 6; 1. and Error § interlocutory Rules of Civil Procedure § 54— — affecting — right order appeal substantial immediate of Rule effect 54(b) 54(b) prohibit appellate Rule does not partial review of non-final adjudications which, virtue 7A-27(d), of G.S. 1-277 and G.S. despite interlocutory
reviewable their nature. Appeal 2. — and Error § 6—dismissal right appeal 54(b) appellate Rule did not dismissing bar review order plaintiff’s for relief even “there extant claim for failure state a claim though expressly did order determine that just delay” was no reason for and there were other claims right” in the lawsuit since the order affected a “substantial appealable 7A-27(d). and was under both G.S. 1-277 and G.S. complaint insufficiency 3. Rules of Civil Procedure 8—dismissal of insufficiency A should not be dismissed for unless it certainty appears to a entitled no relief under proved support could be state of facts which claim. THE IN SUPREME COURT
Newton v. Insurance Co. — — Damages punitive damages ques- sufficiency complaint 4. § of 11— tion of law pleadings bring Whether the facts stated in the sufficient to allowing damages punitive question the case within the rule is a of law, although punitive damages will the determination whether be allowed, any, and the to be in sound allowed amount if rests dis- jury. cretion of the — — Damages damages necessity punitive breach of 5. contract § 11— tort for exemplary damages allowed for breach of Punitive or are not marry; however, contract, except is an identifiable panies punitive where there of contract to for breach though tort, accom- the tort also constitutes or even give contract, may rise to a claim for breach of tort itself a — — punitive damages aggravated Damages tort conduct § 6. 11— alleged make out an identifiable where sufficient facts to Even by partake accompanied tort, of some be the tortious conduct must punitive damages allowed, aggravation will be before element of degree malice, neg- fraud, aggravated a of oppres- includes such conduct such consequences, ligence indifference to as indicates reckless rudeness, caprice insult, sion, or wilfulness. — aggravated allegations Damages of conduct 12—§ 7. supports punitive aggravated for conduct which award The by alleged may damages tort established when an identifiable itself, cases, in allegations as slander extrinsic to of behavior allege by allegations may to a tort sufficient be established tort, or it very encompasses any by nature, of the elements its where that aggravation, case fraud. as in the — — overruling prior damages punitive Damages fraud case 11—§ 8. (1953), Realty insofar overruled Swinton aggravated to requires conduct in addition kind of some that case as damages permits punitive an award fraud for actionable “simple” distinguished “aggravated” damages only from fraud. for — — pay Damages claim of insurer to 12— failure § 9. insufficiency of properly claim dismissed for trial court oppressive allegedly “heedless, conduct” wanton by failing pay plaintiff’s claim loss in of defendant theft and precarious fi- burglary knew that when it repre- since the breach contract position of his loss because nancial accompanied pay to be by failure to defendant’s sented recognizable misrepresentation or other tor- fraudulent either oppressive behavior, behavior tious breaching plead any recognizable being tort. insufficient the contract — punitive pay refusal claim 10.Damages bad faith 11—insurer’s precarious — knowledge financial condition insured’s justifiable pay an in- refusal faith if a bad Even decided, damages, give which is not might rise to surer knowledge precarious posi- insurer’s was in a financial tion because of his loss does not in itself show bad faith on the part failing pay of the insurer the claim or refusal was unjustified. Sharp concurring Chief Justice in result. join concurring opinion.
Justices Branch
and Moore
petition
discretionary
On
review of the decision of the
Appeals,
App.
Court
(opinion
EXUM, Justice. questions presented
There are two for decision. The first is appeal Appeals whether the dismissing Court of plaintiff’s erred in ground on the the trial court’s order of dismissal only affected claims, one court did not trial just determine there delay,” appeal, “no reason for and therefore, judgment meaning from a final within the 1A-1, 54(b). General Statute second, Rule think it We did. therefore, dismissing whether plain- is the trial court erred in allegedly tiff’s claim for “heedless, oppressive failing wanton and conduct” of pay plaintiff’s striking claim, support which the claim for We think did not. Appeals plaintiff’s ap-
The Court of based its dismissal of peal superior expressly on the court’s failure to determine just delay.” its order no that “there was reason for held that It THE IN SUPREME COURT. by 54(b) required reads Rule determination was such a as follows: involving multiple Judgment
“(b) claims or multiple relief is parties. than more one claim —When counterclaim, claim, action, presented in an whether as a claim, multiple parties crossclaim, third-party when or or judgment may as involved, final the court enter a only parties claims or more but than all of the one or fewer delay is determined just and it so reason for if there no subject judgment. judgment then be shall Such by these rules provided appeal as otherwise review entry final of such a In the absence of or other statutes. judgment, designated, decision, any however form of order or other adjudicates than all claims fewer parties rights all the fewer than liabilities of or the any the claims the action as to not terminate shall subject to review either parties and shall not then be expressly provided these except appeal or otherwise entry Similarly, absence of rules or other statutes. any form of judgment, other order or a final of such entry subject time before to revision decision rights and adjudicating judgment all the claims added.) (Emphasis parties.” of all the liabilities *4 dis- appealability of the the The of this rule effect de- been plaintiff’s has of missal strikingly of Oestreicher in similar case Court the cided this held We there summary of 54(b) appellate review did not bar that Rule plaintiff’s claim for on the judgment entered though judgment expressly not even the did delay” just and reason “there was no also that determine That this case in the lawsuit. claims extant were other there 12(b) (6) rather than a sum- under Rule dismissal involves a holding applicability of our judgment does not affect the mary in Oestreicher. important distinc- illustrated the this Court
In Oestreicher federal counter- rule and its North Carolina the tion between resulting of words italicized from the addition the part Pro- Rule of quoted above. Federal Civil rule North Carolina rigors mitigate the clearly of intended to 54(b) is cedure allowing ren- finality a trial court to requirement of federal ordinarily so, der final a decision which would not be and thus appealable. By finding just would not otherwise be “no reason delay” making expressly for judgment, and such a determination in power
the federal itself to ren- court secures to judgment parties.” der final as to “fewer than all of the claims or [1] In North Carolina there are well recognized often used exceptions requirement finality appeal to the can before statutory provisions, particular, taken. Two 1-277 and G.S. 7A-27(d), appeal interlocutory G.S. allow from certain orders rights judgments, notably or those which affect substantial parties. language addition of the italicized the North counterpart 54(b) clearly intended, Carolina is of Rule recognized Oestreicker, except prohibition re from the judg partial adjudications, view of non-final those orders (d), which, ments virtue of General Statutes 1-277 7A-27 despite interlocutory their nature. The rule in reviewable courts, essentially remedial, Carolina, North as in the federal allowing though final, par and while trial court render tial, adjudication might otherwise, appealable not be will be construed to limit the effect of other rule allowing judgments. statute orders or G.S. review non-final 54(b) restricts, compass 1A-1, expands, than Rule rather judgments in North review of orders and Carolina. claim for Since the order of the trial court did affect a “substantial dismissing plaintiff’s right” appealable 1-277 under both G.S. and is therefore dismissing 7A-27(d), Appeals erred in G.S. Court plaintiff’s appeal. issue, goes considering merits
In to the the second claim for of the trial court’s dismissal claim), 12(b) (6) (failure it is under Rule to state a necessary of the com- detail to consider some plaint. *5 August while its plaintiff that on insuring against by effect, plaintiff the loss theft was policy damage building, experienced fur- to its merchandise and lost burglary by of more and sum
niture and fixtures theft payment defendant demanded of than Plaintiff $5500.00. remaining allegations pay. the refused to Since and defendant IN THE SUPREME COURT Newton v. Co. Insurance claim for the basis of constitute the length: they damages, out set plaintiff made That from time has “7. to time employees agents, and to defendant and servants known its proceeds desperate of insur- was in need of the said that he satisfy pressing policy to which he was entitled to ance mentioned, by and above financial matters caused loss by fa- by reason fire with which defendant of loss Notwithstanding knowledge of said of defendant miliar. to conditions, made nor offered the defendant has neither negotiate plaintiff to settlement of payment make plaintiff’s policy under said of insurance. plaintiff had knew that “8. Defendant at said times financing arrangements plan with creditors floor and day great regular that each and course of business and financing being by high plaintiff. incurred of were costs plaintiff payments to further knew that had Defendant upon liens and of which constituted an make deeds trust obligations in- expense said business and that said his day. payment Defendant further of interest each volved the by by plaintiff and that reason of the losses sustained knew the failure and pay properly refusal of defendant settle entitled under the plaintiff the sums to which he was policy of insurance for two losses sustained said plaintiff, effectively plaintiff that would not be able he carry on it was essential re- his business and plaintiff the sums the defendant ceive from policy prompt entitled under said insurance expeditious manner. Defendant, notwithstanding foregoing, heed-
“9. disregard consequences it knew less comply experience defendant’s failure to with would policy oppressive in an man- terms its of insurance and comply express terms refused to with the ner failed and policy plaintiff. insurance issued to its heedless, op- reason its wanton and
“10. That subjected aforesaid, pressive itself conduct as defendant has damages, penalty en- to recover in the sum titled $50,000.00.” of at least *6 111
Newton v. Insurance Co. superior The court allowed motions to defendant’s dismiss for for failure a claim for relief to state strike supported those that claim as immaterial; judgment accordingly. was rendered “ [3, insufficiency [A] appears should not be dismissed 4] certainty unless to a is entitled to no u/nder proved sup- state be in which could relief of facts port Duke, 94, claim.” 103, Sutton v. 277 176 N.C. S.E. 166 (1970), quoting 2A Federal 12.08 Moore’s Practice § (2d 1968). ed. pleadings Whether the facts stated in bring sufficient damages allowing punitive the case within the rule question law, is a Worthy Knight, v. 210 N.C. (1936) ; 187 R., S.E. 771 Picklesimer 194 v. R. N.C. 138 although (1927), 340 S.E. punitive the determination whether allowed, any, will be allowed and the amount to if jury. Worthy Knight, rests supra. the sound discretion of the v. Stores, supra; King exemplary damages [5] exception North Carolina follows the The general are not allowed for breach of v. Insurance rule in most contract general 273 jurisdictions marry. N.C. rule that Oestreicher contract, is that 159 S.E. puni with v. though wilful, tive are not allowed even the breach be oppressive. See, e.g., McCarthy, malicious or John Punitive C. Damages (1976). Nevertheless, in Bad Faith Cases where there though constitutes, is an identifiable tort even also the tort accompanies, contract, give may a breach of itself rise tort supra to a claim for v. Oestreicher 134-35, citing v. Greenwald, Saberton 146 Ohio St. Damages (1946) 2d 224 N.E. 120. C.J.S. early 100, 101, R., v. case of Richardson R. (1900) support three relies on older cases to “
proposition
[tjhere
many
where an action for
cases
may grow
contract,
out of
breach of
but
dam-
ages
given
contract, except
are never
breach of
cases of
promises
R.
R.,
108 N.C.
marry:
414;
State
Solomon v.
Skinner,
Bates,
25 N.C.
118 N.C.
564;
Purcell
. . . .
”
quoted
arguably equivocal,
Purcell
While
statement
it,
R.,
support
(1891),
R.
cited
recognized
damages
Oestreicher,
and allowed
the rule noted
though
identified,
separate
where
tort was
even
a breach of contract.
tortious conduct also constituted
While
THE SUPREME COURT
IN
*7
contract,
oppressive breach of
distinction
malicious or
between
damages
generally
allowed,
tor-
punitive
for
not
which
constitutes,
accompanies, a breach
conduct which
tious
also
occasionally
prac-
of observance
of
is one
difficult
contract
any
tice,
of
it is
fundamental
to
consideration
nevertheless
damages
A.L.R.
question
punitive
in contract cases. See
of
exemplary
dam-
an annotation
“Punitive or
where
” expressly
ages
excepts
its
from
breach of contract
. . . .
for
damages
recovery
for
exemplary
in tort actions
scope
of
“[t]he
therefore,
are,
duty
contract,
growing out
which
breach of a
of a
comply
purely
for failure
with
not
ex contractu
to
actions
”
.
contract
. . .
[6]
Even where sufficient
facts
to make
out
tort,
be
however, the
conduct must
accom-
identifiable
tortious
aggravation
panied
partake
of
before
some element
of
Stores, supra;
damages
punitive
will
allowed. Oestreicher
aggra-
(1922).
Winslow,
1,
this Saberton, Although purportedly relies on Swinton that, it, despite the suffi- follow but holds instead it ciency does inducing proof actionable fraud plaintiffs’ land, sale no a contract for the plaintiffs to enter reasoned that additional The court allowable. were aggravation accompany to warrant the fraud must elements damages, hough de- concluding, conduct “[t] required they reprehensible, now been have fendants was injury fully caused compensate plaintiffs loss and requires representations. think the law their do not false We meted out punishment should be that an additional amount Realty Co., supra 73 S.E. in this Swinton action.” at 788. language may represent misapprehension
This
in Swinton
concerning
public
policy
supports
doc-
our traditional
Although
jurisdictions
do
of
punitive
some
trine
for non-
compensate
allow
quantifiable
*8
damages,
generally
v.
compensatory
see
Saberton
supra,
consistently
puni-
Greenwald,
has
allowed
North Carolina
damages solely
policy
punish inten-
tive
on
basis
its
wrongdoing
from similar behavior.
tional
and to deter others
Co.,
Winslow, supra;
v. Fisheries Products
Baker v.
Cotton
supra; Motsinger
Sink,
N.C.
involves intentional
[8]
In
North
Carolina,
wrongdoing.
actionable fraud
As defined
its
Justice,
very
nature
now
Commission,
Justice,
Highway
Sharp in Davis v.
Chief
“
(1967)
405, 408,
is a mal
:
‘Fraud
resulting
intent
to de
feasance,
positive
from a wilful
act
231, 241, 195
quoting
State,
Walter v.
208 Ind.
ceive ....’”
613;
268, 272,
Fraud
1.
98 A.L.R.
37 C.J.S.
N.E.
wrongdoing
well within
punishment of such intentional
underlying
concept
dam
some
policy
its
North Carolina’s
Realty
requires
Co., supra,
ages.
as Swinton v.
Insofar
aggravated
actionable fraud
in addition to
conduct
kind
“aggravated”
any
“simple” and
makes
distinction between
IN THE SUPREME COURT
fraud, permitting punitive damages only
latter,
that case
overruled,
holding.
as are all cases so
Neither the
relied
cases
upon in Swinton nor the cited annotation at
Thus we allowed a claim for to stand Oestreicher where misrepresentations accompanying fraudulent a breach of sufficiently alleged. contract were Unlike Oestreicher, however, this case involves no tort. The is represented by contract pay defendant’s failure to alleged accompanied by to be misrepre either fraudulent recognizable sentation or other tortious behavior. As in King Co., supra, v. Insurance v. Travelers Indem Ledford nity Co., Supp. (W.D. 1970), allegations 318 F. Okla. oppressive behavior breach ing plead any recognizable the contract are insufficient tort. They are, moreover, unaccompanied allegation by any of inten wrongdoing tional other than the breach itself even were a alleged. Punitive could not therefore be allowed even if the proved. here considered were The trial court properly allowed motion defendant’s to dismiss this claim. King
In supra, plaintiff Insurance contended that his against insurer refused to defend him a counterclaim which alleged he lost. His action was for an “wilful breach” of the in- contract, surance a breach which further “was *9 hamper, calculated conduct prevent, impair ... to and/or plaintiff’s legal position” and done “in wilful and wanton dis- regard rights plaintiff” of the of the in bad faith. This Court held that claim for on based allegations properly these was stricken on motion of the defend- plaintiff’s allegations ant. rise give The Court said that “do not sounding to a cause of and, action therefore, in tort do not constitute fact, proved, subject which if would liability damages.” the defendant to Plaintiff relies a support number of authorities to his unjustified contention that “an pay may subject failure to penalty insurer to a or to Couch, . 16 ...” G. Cyclopedia 2d, (1966). Insurance Law 58:9 Several au- recognize special thorities cited faith on implied-in-law duty good a part nothing wrongful of insurers deprive to do to the insured of the policy. See, e.g., of the benefits Crisci Security Co., Ins. 66 Rptr. Cal. 2d 426 P. 2d 58 13 Cal. 115 FALL TERM v. Insurance Co.
Newton
note, however,
the California decisions
even
We
most lib-
primarily by plaintiff
been
relied on
and which have
allowing
neverthe-
cases,
in
have
in
insurance
eral
simple
only
than
in
in which
was more
less done so
cases
there
Co., 10
Nat’l
Ins.
Fletcher v. Western
of contract.
Life
instance,
involved,
(1970)
App.
Rptr.
Cal.
3d
Cal.
resulting
a claim for intentional
infliction of mental distress
threatening
defendant
inter alia
made
from
communications
promote
by plaintiff
policy
and to
to
the surrender of the
induce
v. United
dispute. In Wetherbee
the settlement of a nonexistent
(1968),
Co.,
Rptr.
App.
Ins.
sub-
Cal.
Cal.
(1971),
sequent
App.
Rptr.
appeal
95 Cal.
Cal.
alleged
payment
plaintiff
representations
of intended
false
policy.
plaintiff
made
not to
to induce
cancel
Security
Co.,
supra,
there
involved
In Crisci v.
Ins.
was
by the insurer’s
intentional
refusing
ing
infliction of mental distress caused
subjected
judgment exceed-
to
settle
pay.
refused to
policy
of the
which insurer
limits
likewise
jurisdictions see, e.g.,
ex rel.
For
other
State
similar cases from
Eighth
District, 149
Larson
District Court
Judicial
Mon
(1967)
(breach
423 P. 2d
of contract which con
tana
laws) ;
Fire &
Vernon
Cas.
stituted violation
state insurance
(insurer
(Ind.
1974)
Sharp,
App.
Ins.
pay justifiable We need not now decide whether a bad an insurer might give faith refusal rise here, faith facts No bad is claimed nor are finding of bad faith could made. Insur from which a knowledge precarious posi financial er’s tion in view of his loss does part faith on the in itself show bad refusing claim, pay the or for that *10 matter, unjustified. Had that refusal was investigation by deter claimed that after due mined was valid and defendant nevertheless re investigation pay or that defendant refused make fused to THE IN SUPREME COURT all,
at and that defendant’s refusals were in bad faith with an damage plaintiff, question intent to cause further a different presented. would be impose upon beyond are slow to
We liabilities exposure those called for the insurance contract. To create except would, to such risks for the most extreme circumstances certain, consuming public we are be detrimental to the whose premiums surely insurance would increased to cover them. great hand, disparity On the other fi- because generally nancial resources which exists between insurer and companies, and the insured carriers and fact insurance like common utilities, regulated clearly affected with public interest, recognize we the wisdom of a rule which would part pay deter refusals on insurers to valid claims when unjustified refusals both and in faith. dam- bad Punitive ages duty public “have been allowed for to serve the utility. public a common carrier or other See: Carmichael Telephone Telegraph Co., 21, Southern Bell & 157 N.C. S.E. 619; R., Hutchinson v. Southern R. 263.” N.C. King supra v. Insurance at S.E. 2d 893. Suffice say adopt reject it to that we are not called here to such a rule. properly the claim dis-
Since court, supportive missed the trial of the com- properly plaint were also stricken. reversed, Appeals
The decision of the Court of is therefore dismissing superior the order court the claim is affirmed. concurring Sharp Chief Jusice in result. my
For the reasons dissent in Oestreicher v. stated (1976), I con- majority opinion cur in result refer- reached with my view, In nor ence to neither this case Further, appropriate. I do Oestreicher are overruling clarify not think will law we Swinton Realty Co., con- 73 S.E. On the only trary, this action can further confuse an area of the law becoming rapidly which is confusion worse confounded. *11 117 Co.
Newton v. Insurance clearly facts, correct. Swinton was On its decision present been each of five members It has cited January prior authori- 1 1975 as who became members Court variously supporting propositions stated as and tative follows:
(1) damages only tort actions Punitive can be recovered malice, showing upon proof and of facts actual indignity gross insult, or a reck- oppression, wrong, and willful Lines, disregard rights. Leuven Motor less Van v. 640, 546, (1964). also Hinson 539, 135 See 261 N.C. S.E. 2d 645 ; Dawson, 27, 393, (1956) 23, 92 Lutz v. 244 N.C. 2d 396 S.E. 344, Industries, 332, 242 88 v. Home Inc. Dixie N.C. 333, (1955). 2d 342 S.E. showing,
(2) such cannot Without Smith, 270 N.C. representations. Nunn v. recovered for false 374, 377, (1967) ; Cloninger, Horne 256 2d 499 v. 154 S.E. 102, 103, (1961). N.C. S.E. 2d
(3) A in an is not entitled to showing merely upon misrepresentations action for fraud Swinton). (the situation in which constituted the cause of action Hardy 342, 344, Toler, 303, 306, 311, N.C. (1975). ordinarily general exemplary, puni- (4) It rule not in an action recoverable tive vindictive Highway Commission, Davis fraud. (1967). marry, promise (5) exception of a With the damages King given of contract. are not for breach 396, 398, 159 S.E. 2d Insurance law, my foregoing propositions sound In view overruling An Swinton. doubt them I would cast unnecessary to disposition this makes is appropriate case implications inherent or to consider the overrule Swinton a course. such concurring join opinion. this
Justices Branch Moore