Haralson v. Fisher Surveying, Inc.

• Citation: 31 P.3d 114,201 Ariz. 1
• Decision Date: 13 September 2001
• Docket Number: No. CV-00-0006-CQ.,CV-00-0006-CQ.
• Parties: Devin HARALSON, Plaintiff, v. FISHER SURVEYING, INC., a Texas Corporation; Estate of Timothy Fisher, by and through David J. Fisher, Administrator of said Estate, Defendants.
• Court: Supreme Court of Arizona

31 P.3d 114

201 Ariz. 1

Devin HARALSON, Plaintiff, v. FISHER SURVEYING, INC., a Texas Corporation; Estate of Timothy Fisher, by and through David J. Fisher, Administrator of said Estate, Defendants.

No. CV-00-0006-CQ.

Supreme Court of Arizona. En Banc.

September 13, 2001.

Thompson, Montgomery & Cahill by Diana G. Montgomery, Globe, Attorneys for Plaintiff Haralson.

Goering, Roberts, Rubin, Brogna & Enos by Scott Goering, J. Cole Hernandez, Tucson, Attorneys for Defendants Fisher Surveying, Inc. and Estate of Timothy Fisher.

OPINION

ZLAKET, Chief Justice.

¶ 1 The Honorable Alfredo C. Marquez of the United States District Court for the District of Arizona has certified two questions of Arizona law to this court, reformulated as follows:

1. Whether a claim for punitive damages survives the death of a tortfeasor and may be pursued against his or her estate?

2. Whether a corporate defendant can be held vicariously liable for punitive damages arising out of the tortious conduct of its now-deceased employee?

¶ 2 We have jurisdiction pursuant to Arizona Constitution art. 6, § 5(6), Arizona Revised Statutes § 12-1861 (1994), and Supreme Court Rule 27(a).

Background

¶ 3 Timothy Fisher was the president and chief executive officer of Fisher Surveying, Inc. On December 10, 1996, he was driving southbound on Highway 191 in Graham County while in the course and scope of his employment. Several motorists witnessed Fisher cross the road's center line and tried unsuccessfully to warn him with horns and flashing headlights. Unfortunately, he continued on his way, eventually colliding with a truck in which Haralson was a passenger. Fisher was killed in the accident and Haralson was injured. Fisher's body subsequently tested positive for the presence of amphetamines, benzodiazepine, and marijuana metabolites. Defendants admit that the deceased was at fault.

Discussion

1. Estate Liability.

¶ 4 We first address whether punitive damages can be assessed against the estate of a deceased tortfeasor. The court of appeals confronted this issue thirty-one years ago in Braun v. Moreno, 11 Ariz.App. 509, 466 P.2d 60 (1970). In that case, both drivers were killed in the underlying collision. In refusing to permit an award of punitive damages against the wrongdoer's estate, the court noted that such damages "are not to compensate an injured person for the loss sustained, but to punish a defendant for his conduct. Since the deceased tortfeasor can in no way be punished by the award of punitive damages, we see no reason for allowing such damages to be assessed." Id. at 511-12, 466 P.2d at 62-63 (citation omitted).

¶ 5 We are not bound by the court of appeals' opinion. Wilderness World, Inc. v. Department of Revenue, 182 Ariz. 196, 200, 895 P.2d 108, 112 (1995). Moreover, because Braun failed to adequately consider the larger societal effects of punitive damage awards, we decline to follow its reasoning.¹ ¶ 6 The purpose of punitive damages has never been limited to punishment. At their inception, such damages were awarded "not only as a satisfaction to the injured person, but likewise as a punishment to the guilty, to deter any such proceeding for the future, and as proof of the detestation of the jury to the action itself." Wilkes v. Wood, 98 Eng.Rep. 489 (C.P.1763). Punitive damages have always served to set an example; hence, the terms "punitive" and "exemplary" are used interchangeably in our law. See, e.g., Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 330, 723 P.2d 675, 679 (1986)

; 22 Am. Jur.2d Damages § 731 (1988).

¶ 7 Punishment, societal condemnation, deterrence, and public policy have been recognized in Arizona as valid grounds for assessing punitive damages. See, e.g., Wyatt v. Wehmueller, 167 Ariz. 281, 285, 806 P.2d 870, 874 (1991)

(stating that such awards "punish reprehensible conduct") (citation omitted); Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 497, 733 P.2d 1073, 1080 (1987) (finding that exemplary damages are designed "to express society's disapproval of outrageous conduct and to deter such conduct by the defendant and others in the future"); Linthicum, 150 Ariz. at 330,

723 P.2d at 679 (stating that such damages are "to punish the wrongdoer and to deter others from emulating his conduct"); Acheson v. Shafter, 107 Ariz. 576, 578, 490 P.2d 832, 834 (1971) (declaring that "[p]unitive damages are allowed on grounds of public policy").

¶ 8 We recognize that a majority of jurisdictions do not permit such damages to be awarded against a deceased tortfeasor's estate. See G.J.D. v. Johnson, 552 Pa. 169, 713 A.2d 1127, 1129 (1998)

(surveying state statutes and cases); see also Restatement (Second) of Torts § 908 cmt. a (1977) ("Punitive damages are not awarded against the representatives of a deceased tortfeasor nor, ordinarily, in an action under a death statute.").² Like the dissent, these courts argue that the primary purpose of punitive damages—punishment—is not advanced when the tortfeasor is deceased. Doe v. Colligan, 753 P.2d 144, 146 (Alaska 1988); Thompson v. Estate of Petroff, 319 N.W.2d 400, 408 (Minn.1982); Allen v. Anderson, 93 Nev. 204, 562 P.2d 487, 489-90 (1977) (quoting Braun, 11 Ariz.App. at 511-12,

466 P.2d at 62-63). They also suggest that, in allowing punitive damages against the deceased's heirs, innocent parties are punished. Lohr v. Byrd, 522 So.2d 845, 846 (Fla.1988); State Farm Mut. Auto. Ins. Co. v. Maidment, 107 N.M. 568, 761 P.2d 446, 449 (Ct.App.1988),

aff'd by Jaramillo v. Providence Washington Ins. Co., 117 N.M. 337, 871 P.2d 1343, 1352 (1994). Finally, they claim it is speculative to conclude that such an award has a deterrent effect on others. Colligan, 753 P.2d at 146; Lohr, 522 So.2d at 846.

¶ 9 There are, however, jurisdictions allowing recovery of exemplary damages from a deceased tortfeasor's estate. In Alabama, the state's wrongful death statute was long ago interpreted to permit punitive damages based on a general deterrence rationale. Shirley v. Shirley, 261 Ala. 100, 73 So.2d 77, 85 (1954). Relying on that reasoning, the Fifth Circuit has held that recovery of punitive damages against estates in Alabama is not limited to wrongful death actions. Ellis v. Zuck, 546 F.2d 643, 644-45 (5th Cir.1977).

¶ 10 Texas permits the imposition of punitive damages for many reasons besides punishment—to set an example for others; to reimburse for inconvenience, attorneys' fees, and other losses outside the normal realm of compensatory damages; and to serve the overall public good. Hofer v. Lavender, 679 S.W.2d 470, 474-75 (Tex.1984). In addition to punishment and deterrence, West Virginia utilizes exemplary damages to provide additional compensation for victims of reckless and wanton conduct. Perry v. Melton, 171 W.Va. 397, 299 S.E.2d 8, 12-13 (1982).

¶ 11 In Tillett v. Lippert, 275 Mont. 1, 909 P.2d 1158 (1996), the Montana Supreme Court sustained a punitive award against an estate, relying on both case law and a statute which provides that "a judge or jury may award ... punitive damages for the sake of example...." Id. at 1162 (quoting Mont. Code Ann. § 27-1-220). The Pennsylvania Supreme Court has similarly upheld the imposition of exemplary damages against an estate based on principles of fairness and general deterrence. G.J.D., 713 A.2d at 1131 ("To allow a tortfeasor's estate to escape payment of punitive damages would be comparable to the injustice of allowing a defendant to transfer his wealth to his prospective heirs and beneficiaries prior to the trial of a case in which punitive damages are sought against him.").

¶ 12 An Illinois appellate court enforced an award of punitive damages against a deceased's estate in Penberthy v. Price, 281 Ill.App.3d 16, 216 Ill.Dec. 902, 666 N.E.2d 352 (1996). Like the instant case, Penberthy dealt with an intoxicated driver who crossed the center line and collided with the plaintiffs' vehicle. The Illinois court permitted survival of the punitive damage award based on general deterrence and the "strong public policy against mixing alcohol and automobiles." Id., 216 Ill.Dec. 902, 666 N.E.2d at 356-57.

¶ 13 We find the reasoning in these cases to be most persuasive. We also recognize the obvious—that it is impossible to punish or deter the decedent in this case, and that his acts resulted in a far more serious penalty than any court or jury could mete out. Nevertheless, without making a judgment concerning the advisability of exemplary damages here, we conclude that there are situations in which it would be appropriate, and perhaps even necessary, "to express society's disapproval of outrageous conduct" by rendering such an award against the estate of a deceased tortfeasor. Hawkins, 152 Ariz. at 497, 733 P.2d at 1080; see also Caron v. Caron, 577 A.2d 1178, 1180 (Me.1990)

(stating, in a spousal and child abuse case, that the "primary purpose of punitive damages is to `express society's disapproval of intolerable conduct and to deter such conduct where no other remedy would suffice'") (internal punctuation and citation omitted); Linscott v. Rainier Nat'l Life Ins. Co., 100 Idaho 854, 606 P.2d 958, 961 (1980) (finding that the purpose of exemplary damages "is not to compensate the plaintiff, but to express the outrage of society at certain actions of the defendant"). Examples such as terrorist attacks or bombings, mass murders, and serial killings immediately come to mind. It is difficult to understand why the assets of those who perpetrate such atrocities and then die should be shielded from punitive damage liability.

¶ 14 We do not suggest, however, that today's holding is limited to such extreme conduct.³ We rely on the good sense and wisdom of judges and juries to decide which fact situations are serious enough to call for punitive awards against an estate, subject always to the narrow guidelines we have previously established with respect to such damages. See Thompson v. Better-Bilt Aluminum Prods. Co., Inc., 171 Ariz....