Ainsworth v. Combined Ins. Co. of America, No. 17625

Docket NºNo. 17625
Citation763 P.2d 673, 104 Nev. 587
Case DateOctober 26, 1988
CourtSupreme Court of Nevada

Page 673

763 P.2d 673
104 Nev. 587
Thomas AINSWORTH, Appellant,
v.
COMBINED INSURANCE COMPANY OF AMERICA, Respondent.
No. 17625.
Supreme Court of Nevada.
Oct. 26, 1988.

Peter Chase Neumann, Bradley & Drendel, Reno, for appellant.

Mortimer, Sourwine, Mousel, Sloane & Knobel, Reno, Lionel, Sawyer & Collins and M. Kristina Pickering, Las Vegas, for respondent.

Lambrose, FitzSimmons & Perkins, Carson City, for amicus curiae.

[104 Nev. 588] OPINION

GUNDERSON, Chief Justice.

On January 14, 1982, Thomas Ainsworth was a healthy, working man who also served his community as a member of the Sparks City Council. His only health concerns involved occasional "dizzy spells," which he had experienced at irregular intervals over a period of several years. Within twenty-four hours, Thomas Ainsworth's life was shattered. Because of an accident which occurred during the administration of an angiogram, Thomas suffered a stroke. He immediately went into a coma, which continued for seven days.

Page 674

He was still 100% disabled after six months. The stroke did not kill him, but some of its effects are permanent and devastating. He will never walk or talk as well as he previously did.

While Thomas was fighting for his life, his wife, Evelyn Ainsworth, was fighting a different battle. She attempted to collect benefits for Thomas under two accident policies issued by the respondent, Combined Insurance Company of America (Combined). The Ainsworths had been advised by agents of Combined [104 Nev. 589] that their accident policies would protect them in the event of "any conceivable accident." Relying on this promise, and the advice of Thomas' physician, Evelyn sent in an accident claim.

The insurance adjuster who received the claim denied it immediately, without any investigation whatsoever, because the doctor's report hypothesized that the stroke may have been caused by the disruption of atheromatous plaque during the angiogram. The adjuster focused upon this one sentence in the report, and concluded that the development of arterial plaque had contributed to Thomas' stroke. Since the policy excluded any accident which was contributed to by disease, Combined refused to pay benefits under the policies. These benefits amounted to $9,600.

Evelyn was distressed by the denial, but decided to resubmit the claim on advice from her nephew, who was a physician, and from the Combined salesman who came by in June to collect the next biannual premium. Combined's salesman discussed the Ainsworths' financial condition with Evelyn, and encouraged her to resubmit her claim. He even promised to put a hold on the premium check while the matter was cleared up.

The claim was resubmitted, along with a doctor's report which corrected the earlier hypothesis. The doctor stated that the results of the angiogram clearly showed that Thomas' blood vessels were normal and were not built up with atheromatous plaque. He affirmed that the stroke was entirely accidental, and could have resulted from numerous causes.

At this time, Combined sent its file to its medical consultant, Dr. Goldfinger. The consultant was provided, however, only with the first doctor's report and records from Washoe Medical Center, where Thomas had been transferred after the accident. The consultant's one-line report stated that the stroke was the result of disease. After receiving the consultant's report, Combined again denied the claim, without evaluating the second doctor's report or the record summaries from the Veteran's Administration Hospital, where the accident occurred. Combined never made further inquiry into the claim, never telephoned or wrote to the doctors, and never obtained a copy of the operating report or the angiogram.

In November, 1982, Evelyn submitted Thomas' claim for the third time, accompanied by yet another doctor's report explaining that Thomas had been the victim of an accident. By this time, the claim file included more records from the V.A. Hospital. The file was sent to Dr. Goldfinger for a second evaluation, but on the same day Combined sent Evelyn a third denial letter. Two days later, Dr. Goldfinger again recommended denying the claim, because the angiogram had been ordered for the purpose of diagnosing Thomas' dizzy spells. Thus, according to Goldfinger, the loss was not "purely accidental."

[104 Nev. 590] In a further effort to obtain the badly-needed policy benefits, Evelyn submitted the claim for the fourth time in February, 1983. With her claim she included a letter from her husband's doctor which confirmed that the angiogram "revealed no pre-existing vascular disease." In response to this claim, Combined offered to "compromise" by paying the Ainsworths $1,940 in exchange for a release of all claims. Evelyn understandably refused this offer, and wrote a fifth letter, requesting payment of the full benefits under the two policies, a total of $9,600. Combined still refused to pay.

The Ainsworths then sued Combined, seeking the payment of benefits and compensatory and punitive damages. The jury awarded the benefits, $200,000 in compensatory damages, and $5,939,500 in punitive

Page 675

damages. Combined moved for a judgment notwithstanding the verdict and for a new trial. The district court denied the latter motion, but granted the former, totally eliminating the award of punitive damages. For the reasons expressed in this opinion, we reverse the judgment of the district court and reinstate the jury's verdict. The denial of the motion for new trial is affirmed.
SUBSTANTIAL EVIDENCE

The function of this court in evaluating a grant of judgment notwithstanding the verdict is to determine whether the jury's verdict is supported by substantial evidence. The party favored by a verdict is entitled to have the evidence interpreted in the manner most favorable to him, and gains the benefit of every inference of fact fairly deducible from the evidence. Stackiewicz v. Nissan Motor Corp., 100 Nev. 443, 686 P.2d 925 (1984); Dudley v. Prima, 84 Nev. 549, 445 P.2d 31 (1968). Judgment notwithstanding the verdict is inappropriate when there is any substantial evidence to support that verdict. Jacobson v. Manfredi, 100 Nev. 226, 679 P.2d 251 (1984).

A jury may award punitive damages where the defendant has been guilty of fraud, malice, or oppression. NRS 42.010. We conclude that the punitive damages award in this case is supported by substantial evidence of oppression on the part of the defendant, Combined. Therefore, we reverse the decision of the district court.

Oppression has been defined as "a conscious disregard for the rights of others which constitute[s] an act of subjecting plaintiffs to cruel and unjust hardship." Roth v. Shell Oil Company, 185 Cal.App.2d 676, 682, 8 Cal.Rptr. 514 (1960); accord Jeep Corp. v. Murray, 101 Nev. 640, 650, 708 P.2d 297, 304 (1985). Our decisions have recognized that such a "conscious disregard" may [104 Nev. 591] support an award of punitive damages. Leslie v. Jones Chemical Co., 92 Nev. 391, 551 P.2d 234 (1976); Nevada Cement Co. v. Lemler, 89 Nev. 447, 514 P.2d 1180 (1973). The Ainsworths presented substantial...

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62 practice notes
  • Ainsworth v. Combined Ins. Co. of America, No. 17625
    • United States
    • Nevada Supreme Court of Nevada
    • May 19, 1989
    ...against Combined, and affirmed the district court's denial of Combined's motion for a new trial. See Ainsworth v. Combined Ins. Co., 104 Nev. 587, 763 P.2d 673 Pursuant to NRAP 40, both parties to this appeal subsequently filed timely petitions for rehearing challenging different facets of ......
  • Moody v. Or. Cmty. Credit Union, A172844
    • United States
    • Court of Appeals of Oregon
    • January 26, 2022
    ...mind, and certain and prompt payment of the policy proceeds upon submission of a valid claim."); Ainsworth v. Combined Ins. Co. of Am ., 104 Nev. 587, 592, 763 P.2d 673, 676 (1988) ("A consumer buys insurance for security, protection, and peace of mind."); Roach v. Atlas Life Ins. Co ., 769......
  • Pioneer Chlor Alkali Co. v. NAT. UNION FIRE INS., No. CV-S-93-276-RLH.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada
    • September 1, 1994
    ...of others which constitutes an act of subjecting plaintiffs to cruel and unjust hardship.'" Ainsworth v. Combined Ins. Co. of America, 104 Nev. 587, 763 P.2d 673, 675 (1988) (citations omitted). Nevada's Supreme Court has stated that malice involves actual hatred or ill-will, or the desire ......
  • Allstate Ins. Co. v. Miller, No. 49760.
    • United States
    • Nevada Supreme Court of Nevada
    • July 30, 2009
    ...special relationship between the insured and the insurer, which is similar to a fiduciary relationship. Ainsworth v. Combined Ins. Co., 104 Nev. 587, 592, 763 P.2d 673, 676 (1988) (describing the insurer-insured relationship as one of "special confidence"); Love v. Fire Ins. Exchange, 221 C......
  • Request a trial to view additional results
64 cases
  • Ainsworth v. Combined Ins. Co. of America, No. 17625
    • United States
    • Nevada Supreme Court of Nevada
    • May 19, 1989
    ...against Combined, and affirmed the district court's denial of Combined's motion for a new trial. See Ainsworth v. Combined Ins. Co., 104 Nev. 587, 763 P.2d 673 Pursuant to NRAP 40, both parties to this appeal subsequently filed timely petitions for rehearing challenging different facets of ......
  • Pioneer Chlor Alkali Co. v. NAT. UNION FIRE INS., No. CV-S-93-276-RLH.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada
    • September 1, 1994
    ...of others which constitutes an act of subjecting plaintiffs to cruel and unjust hardship.'" Ainsworth v. Combined Ins. Co. of America, 104 Nev. 587, 763 P.2d 673, 675 (1988) (citations omitted). Nevada's Supreme Court has stated that malice involves actual hatred or ill-will, or the desire ......
  • Allstate Ins. Co. v. Miller, No. 49760.
    • United States
    • Nevada Supreme Court of Nevada
    • July 30, 2009
    ...special relationship between the insured and the insurer, which is similar to a fiduciary relationship. Ainsworth v. Combined Ins. Co., 104 Nev. 587, 592, 763 P.2d 673, 676 (1988) (describing the insurer-insured relationship as one of "special confidence"); Love v. Fire Ins. Exchange, 221 C......
  • In re Air Crash Disaster at Sioux City, Iowa, No. MDL-817.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • March 14, 1990
    ...Court denied certiorari in two appeals raising due process objections to punitive damage awards. Ainsworth v. Combined Insur. Co. of Am., 763 P.2d 673 (Nev.1988), cert. denied ___ U.S. ___, 110 S.Ct. 376, 107 L.Ed.2d 361 (1989); Clardy v. Sanders, 551 So.2d 1057 (Ala.1989), cert. denied ___......
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