Maynard, Chief Justice, concurring, in part, and dissenting, in
I concur in the ultimate
disposition of these combined cases. I also concur with the new law articulated
in the majority opinion in Syllabus Points 3, 4, and 5. However, I dissent
to the law on when liability is reasonably clear as set forth
in Syllabus Point 2, and I strongly dissent to the majority opinion's treatment
of the punitive damages issue.
First, I do not agree with the majority opinion's definition of reasonably clear. As noted by the majority opinion, the usual definition of clear is evident or plain.In addition, other courts have construed the words reasonably clear to demand a significant degree of certainty. As quoted, but subsequently ignored, by the majority opinion, American Universal Ins. Co. v. Medical Malpractice Joint Underwriting Ass'n of Mass., 1993 WL 818614 *22 (Mass.Super.), provides:
Reasonably clear seems
also to call for a higher level of certainty than reasonably likely would.
The legislative choice of the word clear seems to suggest that the
matter has reached a point where reasonable minds could not honestly differ.
Liability need not be absolutely certain, or beyond reasonable doubt, but it
must be clear enough that reasonable people would agree about it.
Put conversely, if there is room for objectively
reasonable debate about whether liability exists, then it is not reasonably
During this Court's consideration of the instant cases, I proposed a new syllabus point on the definition of reasonably clear as follows:
clear as stated in W.Va. Code § 33-11-4(9)(f) (2002), means that liability
is so plain that reasonable people, with knowledge of the relevant facts and
law, could not honestly differ on the conclusion that the defendant- insured
is liable to the plaintiff.
I believe that this definition accords with the usual meaning of clear. In contrast, there is little or no difference between the majority opinion's definition of reasonably clear and the common definition of preponderance of the evidence which the circuit court used in improperly granting partial summary judgment to Mr. Jackson. In light of the majority opinion's definition, it is likely that the circuit court judge below will wonder why his summary judgment order is reversed.
In addition, I strongly disagree with the majority opinion's cursory treatment of the punitive damages issue. Although we reverse and remand on other grounds, the propriety of the punitive damages award below was briefed and argued before this Court. In addition, the briefs of both parties cite the United States Supreme Court case of State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), which was decided since the trial below. Campbell is highly relevant to both the type of evidence which may be admitted to prove the appropriateness of punitive damages as well as whether a punitive damages award is excessive, both of which are issues in this case. Nevertheless, the majority opinion merely refers this landmark case to the circuit court without further comment and without giving him a clear roadmap.
In Campbell, the insureds brought an action against their insurer, State Farm, to recover for bad-faith failure to settle within the policy limits and damages for fraud and intentional infliction of emotional distress. A jury awarded the insureds $2.6 million in compensatory damages and $145 million in punitive damages, which the trial court reduced to $1 million and $25 million respectively. On appeal, the Utah Supreme Court reinstated the $145 million punitive damages award. The United States Supreme Court subsequently reversed the punitive damages award because it found it to be neither reasonable nor proportionate to the wrong committed, and an irrational and arbitrary deprivation of the property of the defendant in violation of the Fourteenth Amendment. State Farm v. Campbell, 538 U.S. at 429, 123 S.Ct. at 1526. In reaching this conclusion, the Supreme Court discussed the type of evidence that may be admitted in proving the appropriateness of punitive damages.
The insureds in Campbell sought to show the reprehensible conduct of State Farm by introducing evidence of State Farm's business practices for over 20 years in numerous states. The Court found this evidence to be improper. First, the Court said that [a] State cannot punish a defendant for conduct that may have been lawful where it occurred. 538 U.S. at 421, 123 S.Ct. at 1522 (citations omitted). The Court explained, however, that
out-of-state conduct may be probative when it demonstrates the deliberateness
and culpability of the defendant's action in the State where it is tortious,
but that conduct must have a nexus to the specific harm suffered by the plaintiff.
A jury must be instructed, furthermore, that it may not use evidence of out-of-state
conduct to punish a defendant for action that was lawful in the jurisdiction
where it occurred.
538 U.S. at 422, 123 S.Ct. at 1522-23 (citation omitted). Second, the Court expounded that, as a general rule, a State has no legitimate concern in imposing punitive damages to punish a defendant for unlawful acts committed outside of the State's jurisdiction. Any proper adjudication of conduct that occurred outside Utah to other persons would require their inclusion, and, to those parties, the Utah courts, in the usual case, would need to apply the laws of their relevant jurisdiction. 538 U.S. at 421-22, 123 S.Ct. at 1522 (citation omitted).
The Court's conclusion that improper evidence was admitted in Campbell specifically was based on its finding that,
The courts awarded punitive damages to punish and deter conduct that bore no relation to the [insureds'] harm. A defendant's dissimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business.
538 U.S. at 422-23, 123 S.Ct. at 1523. The Court further explained:
[insureds] have identified scant evidence of repeated misconduct of the sort
that injured them. Nor does our review of the Utah courts' decisions convince
us that State Farm was only punished for its actions toward the [insureds]. Although
evidence of other acts need not be identical to have relevance in the calculation
of punitive damages, the Utah court erred here because evidence pertaining to
claims that had nothing to do with a third-party lawsuit (See
footnote 1) was introduced at length. Other evidence concerning
reprehensibility was even more tangential. For example, the Utah Supreme Court criticized State Farm's investigation into the personal life of one of
its employees and, in a broader approach, the manner in which State Farm's
policies corrupted its employees. The [insureds'] attempt to justify the
court's reliance upon this unrelated testimony on the theory that each dollar
of profit made by underpaying a third- party claimant is the same as a dollar
made by underpaying a first-party one. For the reasons already stated, this
argument is unconvincing. The reprehensibility guidepost does not permit
courts to expand the scope of the case so that a defendant may be punished
for any malfeasance, which in this case extended for a 20-year period. In
this case, because the [insureds] have shown no conduct by State Farm similar
to that which harmed them, the conduct that harmed them is the only conduct
relevant to the reprehensibility analysis.
538 U.S. at 423-24, 123 S.Ct. at 1523-24 (citation omitted).
The Court in Campbell further discussed constitutional limits on the ratio between the amount of the compensatory damages award and the punitive damages award. While the Court declined to impose a bright-line ratio which a punitive damages award cannot exceed, it opined that in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. 538 U.S. at 425, 123 S.Ct. at 1524. The Court explained that [s]ingle-digit multipliers are more likely to comport with due process, while still achieving the State's goals of deterrence and retribution, than awards with ratios in range of . . . 145 to 1. Id. However,
greater than those we have previously upheld may comport with due process where a
particularly egregious act has resulted in only a small amount of economic damages. [BMW
of North America, Inc. v. Gore, 517 U.S. 559, 582, 116 S.Ct. 1589, 134 L.Ed.2d
809 (1996). . . . The converse is also true, however. When compensatory damages
are substantial, then a lesser ratio, perhaps only equal to compensatory damages,
can reach the outermost limit of the due process guarantee.
538 U.S. at 425, 123 S.Ct. at 1524. The Court concluded that courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered. 538 U.S. at 426, 1235 S.Ct. at 1524.
Based on the Supreme Court's analysis in Campbell, I proposed three new syllabus points, all of which are taken verbatim from Campbell. These proposed syllabus points, which were rejected by the majority, are as follows:
a claim for unfair settlement practices under W.Va. Code § 33-11-4(9) (2002),
a State cannot punish a defendant for conduct that may have been unlawful where
it occurred. Nor, as a general rule, does a State have a legitimate concern in
imposing punitive damages to punish a defendant for unlawful acts committed outside
of the State's jurisdiction.
* In a claim for unfair settlement practices under W.Va. Code § 33-11-4(9) (2002), lawful out-of-state conduct may be probative when it demonstrates the deliberateness and culpability of the defendant's action in the State where it is tortious, but that conduct must have a nexus to the specific harm suffered by the plaintiff. A jury must be instructed, furthermore, that it may not use evidence of out-of-state conduct to punish a defendant for action that was lawful in the jurisdiction where it occurred.
* In assessing the constitutionality of a punitive damages award under the due process clause, single-digit multipliers are more likely to comport with due process, while still achieving the State's goal of deterrence and retribution, than awards with greater ratios. However, greater ratios may comport with due process where a particularly egregious act results in only a small amount of damages. The converse is also true. When compensatory damages are substantial, a lesser ratio, perhaps equal only to compensatory damages, may reach the outermost limit of the due process guarantee.
On remand, if called upon to assess the appropriateness of a punitive damages award, the trial court is bound to follow the rules above which are taken straight from Campbell. Significantly, Campbell is based on the Due Process Clause of the Federal Constitution and applies to all of the states. Unfortunately, although I do not know for certain, I fear that the majority of this Court rejected these proposed syllabus points because it does not like Campbell. I fervently hope that the next time a punitive damages award is reviewed by this Court, the majority will abide by the United States Supreme Court's decision in Campbell, even if it does not like or agree with Campbell's holdings. The rule of law demands that ordinary citizens follow laws with which they do not agree. Likewise, we as judges are bound by controlling legal precedent. Campbell is the law of the land, and it must be applied everywhere in the United States, including in West Virginia.
For the reasons set forth above, I concur, in part, and dissent, in part.