City of Gary v. Falcone

• Decision Date: 27 May 1976
• Docket Number: No. 3--175A9,3--175A9
• Citation: 169 Ind.App. 295,348 N.E.2d 41
• Parties: CITY OF GARY, Defendant-Appellant, v. John Robert FALCONE and Gloria Falcone, Plaintiffs-Appellees, Arthur Gonzales and William M. Olive, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 41

348 N.E.2d 41

169 Ind.App. 295

CITY OF GARY, Defendant-Appellant, v. John Robert FALCONE and Gloria Falcone, Plaintiffs-Appellees Arthur Gonzales and William M. Olive, Defendants-Appellees.

No. 3--175A9.

Court of Appeals of Indiana, Third District.

May 27, 1976.

Rehearing Denied July 7, 1976.

Charles A. Ruckman, Gary, for defendant-appellant.

Saul I. Ruman, Hammond, for plaintiffs-appellees.

HOFFMAN, Judge.

Plaintiffs-appellees John Robert Falcone and Gloria Falcone prosecuted this action for damages in the trial court against defendant-appellant City of Gary, Indiana, and others. Trial was to a jury which returned a verdict in favor of appellees Falcones for compensatory and punitive damages as the result of the acts of certain employees of the City, and judgment was entered thereon by the trial court. The sole issue presented by this appeal is whether punitive damages could be properly awarded against the City. ¹

Prior to the enactment of the present statutes pertaining to this subject, IC 1971, 34--4--16.5--1, et seq. (Burns Supp.1975), Indiana had enacted no statutes either allowing or disallowing the awarding of such damages. And, it appears that there is no caselaw in Indiana dispositive of this issue. Accordingly, it must be determined whether such an award was permissible at the time this action was brought under the common law. Cf. Perkins v. State (1969), 252 Ind. 549, 251 N.E.2d 30.

Although it has been held that whether a municipal corporation may be held accountable for punitive damages, in the absence of a statutory authorization, is not entirely free from doubt, Raplee v City of Corning (1958), 6 A.D.2d 230, 176 N.Y.S.2d 162, 165, it appears that it is the general common-law rule that exemplary or punitive damages are not recoverable against a municipal corporation. See, Annot. 19 A.L.R.2d 903, and cases cited therein. While it might appear at first blush that such rule is unduly harsh in its application, a more careful consideration of this issue reveals that such rule has a sound basis in public policy.

Preliminarily, it must be remembered that an award of damages is normally based upon a theory of compensation to an injured party. See, State ex rel. v. Jacobs (1924), 194 Ind. 327, 142 N.E. 715. An award of punitive damages, however, is an exception to this rule; such damages are intended as a punishment for malicious or oppressive wrongdoing and to prevent further wrongdoing. Louisville, New Albany and Chicago Railway Company v. Wolfe (1891), 128 Ind. 347, 352--53, 27 N.E. 606; Indianapolis Bleaching Co. v. McMillan (1916), 64 Ind.App. 268, 113 N.E. 1019 (transfer denied). Thus, while compensatory damages are recoverable as a matter of right, punitive damages are not. Indianapolis Bleaching Co. v. McMillan, supra.

Because punitive damage awards are premised upon the theories of punishment and prevention, the courts of this country have historically declined to allow such awards against municipal corporations for the acts of their employees. This position is grounded upon sound considerations of public policy.

First, it is improbable that a large punitive damage award against a city would deter its employees from a repetition of their conduct. And, even if such employees were joined as defendants they would likely be unable to pay such an award. Second, it would be even more difficult than in the usual case to...