JSH Reporter JSH Reporter - Fall 2017 - Page 36

PUNITIVE DAMAGES ARTICLE 036 DID IT JUST GET EASIER TO PRESENT PUNITIVE DAMAGES TO A JURY IN ARIZONA? AUTHOR: Kenneth Moskow EMAILS: kmoskow@jshfirm.com BIO: jshfirm.com/KennethLMoskow A high legal standard has long-governed punitive damages in Arizona. To be entitled to punitive damages, a Plaintiff must show that the Defendant acted with an “evil hand” guided by an “evil mind.” See Rawlings v. Apodaca, 151 Ariz. 149, 162 (1986). The purpose of such a stringent standard is to limit the availability of punitive damages to those very rare circumstances in which the goals of punishment and deterrence will be served. See Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 331 (1986). There has long been a high bar not only to recovering punitive damages in Arizona, but also to even being allowed to present a claim for punitive damages to a jury. Indeed, claims for punitive damages are usually dismissed on dispositive motion. The recent holding in Newman v. Select Specialty Hospital-Arizona, Inc., 239 Ariz. 558 (App. 2016), seems to have made it much easier, however, for a Plaintiff to be allowed to argue punitive damages to a jury. To prove an “evil mind,” a Plaintiff must show, by clear and convincing evidence, that the Defendant either: 1) intended to injure the Plaintiff; or 2) the Defendant consciously pursued a course of conduct knowing that it created a substantial risk of significant harm to others, even if the harm was not intended. Rawlings, 151 Ariz. at 162. A Defendant’s conduct must be aggravated and outrageous and demonstrate that the course of conduct was a “conscious action of reprehensible character.” Linthicum, 150 Ariz. at 331. “[N]egligent conduct, no matter how gross or wanton, cannot be equated with the conduct required for punitive damages.” See Volz v. Coleman Co., 155 Ariz. 567, 570 (1987). The Arizona Supreme Court has analogized conduct justifying punitive damages in civil cases to “conduct involving some element of outrage similar to that usually found in crime.” Rawlings, 151 Ariz. at 162 (quoting Restatement (Second) of Torts § 908 cmt. b). The Supreme Court further affirmed that punitive damages awards are appropriate only to penalize a party for “‘outwardly aggravated, outrageous, malicious, or fraudulent conduct’ that is coupled with an ‘evil mind’” and declared that “punitive damages should rarely be awarded.” See Medasys Acquisition Corp. v. SDMS, P.C., 203 Ariz. 420, 424, ¶¶ 17-18, (2002) (citing Linthicum, 150 Ariz. at 331). Newman v. Select Specialty Hospital- Arizona, Inc. Among other issues, Newman involved a post-trial appeal of a lower court’s judgment as a matter of law on punitive damages. Mr. Newman brought an Adult Protective Services Act (“APSA”) action against the Defendant Hospital, alleging abuse and neglect arising from the failure to appropriately treat a wound. Mr. Newman was transferred to the Hospital for ongoing care following a motorcycle accident, which rendered him a quadriplegic. Mr. Newman arrived at the Hospital with a wound on his sacrum. During his admission to the Hospital, the wound worsened, ultimately becoming a Stage III pressure ulcer. Mr. Newman’s wound healed six months after he transferred to another facility; however, he claimed the wound area was continuously painful and negatively affected his life. At trial, Mr. Newman sought compensatory and punitive damages. After Mr. Newman presented his case in chief, the trial court granted the Hospital’s motion for directed verdict on punitive damages. The trial court found that Mr. Newman failed to offer evidence that could satisfy the clear and convincing standard to establish an evil mind. At the conclusion of the trial, the jury found in Mr. Newman’s favor on his APSA claim and awarded him compensatory damages. EVEN IF THE POLICY IS COMPLETELY CLEAR, A COURT CAN SET IT ASIDE TO GIVE THE INSURED COVERAGE THE POLICY DOES NOT PROVIDE, IF THAT COVERAGE IS WHAT THE INSURED REASONABLY BELIEVED HE WAS GETTING.