Summary
In Anthony v. Frith, supra, upon which the Federal Court relied, this Court decided an automobile liability policy which provided the insurer would pay all sums for which the insured became legally obligated because of injuries sustained by others included punitive damages awarded to a pedestrian who was struck by a vehicle driven by an insured while intoxicated.
Summary of this case from State Farm Mut. Auto. Ins. Co. v. DaughdrillOpinion
No. 52325.
January 21, 1981.
Appeal from The Circuit Court, Washington County, B.B. Wilkes, J.
Willard L. McIlwain, Jr., McIlwain Cox, Greenville, for appellant.
Philip B. Terney, Robertshaw Merideth, Greenville, for appellee.
Before ROBERTSON, P.J., and BROOM and HAWKINS, JJ.
This case is an appeal from the Circuit Court of Washington County. On July 28, 1979, Clayton Frith, while driving an automobile and insured under a conventional automobile liability insurance policy issued by State Farm Mutual Automobile Insurance Company (hereinafter State Farm), struck Carol Ann Anthony, who was walking in a parking area of a shopping center. Frith was intoxicated and Miss Anthony was injured.
She sued, and upon a jury verdict so finding, secured a judgment against Frith for $1,500 in compensatory damages, and $3,500 in punitive damages. No appeal was taken by the defendant.
State Farm paid the compensatory damages, but refused to pay the punitive damages. A writ of garnishment was issued against State Farm, and upon a hearing the circuit judge ruled it was against public policy to require the insurance carrier to pay punitive damages, and dismissed the writ. Miss Anthony appeals.
The insurance policy contains the following pertinent provisions:
COVERAGE A — BODILY INJURY LIABILITY
* * * * * *
To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
(A) bodily injury sustained by other persons, and . . . caused by accident . . .; and to defend with attorneys selected by and compensated by the company, any suit against the insured alleging such bodily injury or property damage and seeking damages which are payable hereunder even if any of the allegations of the suit are groundless, false or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient. (Italics in policy).
The trial court was of the opinion the terms of the policy covered punitive damages as well in this instance, although it found it unnecessary to pass upon the contract in view of its finding of a public policy inhibition preventing recovery. We likewise agree the terms of the policy cover punitive damages as well as compensatory damages in this case.
As to there being any public policy in this state against allowing recovery for punitive damages in a case as this under the terms of an insurance contract as set forth herein, however, we disagree with the trial court and find it was not against public policy to require the carrier to pay punitive damages.
There is a division of authority among various states on this question, and cogent arguments support opposing points of view. We believe the better reasoned view is to hold it was not against public policy in this case to require the carrier to pay punitive damages.
Against Public Policy:
Ging v. American Liberty Ins. Co., 423 F.2d 115
American Surety Co. of N.Y. v. Gold, 375 F.2d 523
Northwestern National Casualty Co. v. McNulty, 307 F.2d 432
Hartford Accident Indemnity Co. v. U.S. Concrete Pipe, 369 So.2d 451
Gleason v. Fryer,30 Colo. App. 106491 P.2d 85
Brown v. Western Casualty Surety Co.,
Padavan v. Clemente, 43 A.D.2d 729
Esmond v. Liscio,209 Pa. 200224 A.2d 793
Nicholson v. American Fire Casualty Ins. Co., 177 So.2d 52
Crull v. Gleb, 382 S.W.2d 17
Universal Indemnity Ins. Co. v. Tenery, 96 Colo. 10 39 P.2d 776
The Law of Liability Insurance
Southern Farm Bureau Casualty Ins. Co. v. Daniel, 246 Ark. 849440 S.W.2d 582
Carroway v. Johnson,245 S.C. 200139 S.E.2d 908
Lazenby v. Universal Underwriters Ins. Co., 214 Tenn. 639 383 S.W.2d 1
Travelers Indemnity Co. v. Hood,110 Ga. 855140 S.E.2d 68
Davis v. Detroit Automobile Inter-Insurance Exchange, 356 Mich. 45496 N.W.2d 760
American Fidelity Casualty Co. v. Werfel, 231 Ala. 285 164 So. 383
Insurance Law and Practice
REVERSED AND RENDERED WITH JUDGMENT HERE FOR APPELLANT.
PATTERSON, C.J., SMITH and ROBERTSON, P. JJ., and SUGG, WALKER, BROOM, LEE and BOWLING, JJ., concur.