The 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: [email protected]
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.